Thursday, 30 January 2014

Defining Poverty and BPL: A Persistent Policy Challenge in India

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Poverty in India is believed to be widespread, and defining poverty and identifying poor has always been India’s persistent challenge. The concerns around the definitional clarity of the poverty and Below Poverty Line (BPL) has been well acknowledged decades back by the prominent visionaries of our nation like Pandit Jawaharlal Nehru and Dadabhai Naoroji and later by the policy making institutions like Planning Commission.
National Planning Committee under Pandit Nehru recognised the prevailing poverty and thus made an effort in 1936 with a policy objective to “ensure an adequate standard of living for the masses, to get rid of the appalling poverty of the people”. Towards this end, the Committee defined goals for the total population in terms of nutrition (involving a balanced diet of 2400 to 2800 calories per adult worker), clothing (30 yards per capita per annum) and housing (100 sq. ft per capita).
However, even after realising and accepting the concerns for so long, an inconsistency has been recognised between the conceptual level of understanding and the practical ways of estimating poverty and the identification of poor households. At conceptual level, definition of poverty is involved both in the estimation of proportion of population living in poverty (a macro level estimate) and the identification of poor households for targeted delivery of various poverty alleviation programmes. In practice, however, the two approaches have followed different paths. The overall estimation of poverty is based on the data available from NSSO’s (National Sample Survey Office) all-India sample survey of household consumption expenditure, whereas identification of poor households requires a census, which necessarily goes by visible and quickly assessable indicators of level of living. Though the poverty ratio majorly depicted the falling trend in both rural and urban India from 1973-74 to 2009-10, the total population under poverty in both rural and urban areas kept on increasing (from 321.3 million to 354.68 million) throughout the same period, as per the Planning commission data.
Though, it is well accepted that till India’s economic liberalisation policy, poverty was an instrument to ensure basic necessities like food, but in the post liberalisation phase with greater accessibility, the idea of poverty gradually underwent changes. Much later in the year 1999-2000, NSSO introduced a method of Mixed Reference Period (MRP) measuring consumption of five low-frequency items (clothing, footwear, durables, education and institutional health expenditure) over the previous year (365 days recall period), and all other items over the previous 30 days, in order to get a stable expenditure pattern for non-food items. A poor himself defines his poverty more broadly by including lack of education, health, housing, empowerment, humiliation, employment, personal security and more. Thus considering the relevance of the factors, other than income taken into account even by a poor person to define their poverty, it becomes even more significant to capture the housing conditions, work profile and other indicators of social and economic status of the households, in order to rightly benefit the vulnerable & needful masses of the country. A study by the Oxford Poverty and Human Development Initiative using a Multi-dimensional Poverty Index (MPI) found that there were 650 million people (53.7% of population) living in poverty in India.
In regard to the concerns raised related to the identification of the households and the relevance of the factors other than income contributing to poverty, the Socio Economic and Caste Census (SECC) was launched on 29th June 2011 in the country. It is being carried out by the respective State/Union Territory Governments with the financial and technical support of the Government of India for the identification of BPL households in both rural and urban areas and would generate information on housing conditions, work profile and other indicators of social and economic status of the households in both the areas. This data could be used to identify the vulnerable or poor households. The census comprises of exclusion, inclusion and deprivation criteria approved by the Cabinet.
Thus it is being realised over the period of time at policy level that the process of inclusion and benefiting the masses with the poverty alleviation programme could be a possible solution since, the evolution in the methodology of BPL census has resulted in reducing the margin for inclusion/ exclusion significantly. Despite such drastic moves, there still remains continuous attempt amongst Indian policy makers to look for an ideal definition of poverty.
Recently the Rangrajan Committee (formed by Planning Commission in 2012 to review the existing methodology of estimating poverty and expected to submit their report by 2014) was formed to redefine poverty and examine Tendulkar methodology. The report is expected to give a new definition of poverty and based on that country will re-estimate the number of people below the poverty line.
-Shruti Issar

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