How Poor Is Too Poor in India?

In India there is a vaguness of what constitutes poverty. India ranks second in the world in malnutrition, with 2.1 million children dying every year. Some of India’s poor live in makeshift homes on train station platforms, an example of the 78 million Indians who lack proper housing facilities. Still, according to the Indian Planning Commission’s criteria on what classifies as a poor person, many of these individuals may not be poor enough to be considered as living below poverty line. 

Poverty is a widespread and well-acknowledged problem in India. To know how poor India is you need simply to look at the people and the places around and you will have good grasp of the situation. However, when it comes to the government accounts, the abjectness of the poverty situation seems to be grossly underestimated, even ignored in many circumstances. 

Reacting to a petition by Peoples’ Union of Civil Liberties, the Supreme Court of India recently asked the Planning Commission to fix the problem. "You (India) are a powerful economy,” the court said. “Yet, starvation deaths are taking place in many parts of the country. What a stark contradiction in our approach. How can there be two Indias?" The court also challenged the Commissions approach to estimating poverty level among the masses. As the Economic Times reported, “The Supreme Court slammed the Planning Commission, asking its Deputy Chairman Montek Singh Ahluwalia to explain how the percentage of people living below poverty line fixed at 36 percent and how has their purchasing power remained unchanged since 1991.” 

Responding to the apex court’s queries, the Planning Commission disclosed its criteria for determining a poor person.  According to the Commission, an urban Indian spending more than Rs 578 a month ($13) – roughly Rs 20 (less than 50 cents) a day – would exceed its limit for the poverty line. The figures are even lower for rural India. If a villager spends more than 15 rupees a day on the entire gamut of basic needs including food, clothing, and shelter, the villager is not deemed poor enough and will not be entitled to receive benefits. 

Based on these consumption levels, the commission has declared that only 41.8 percent of the rural population is poor and a mere 25.7 percent of the urban Indians need food, shelter and social benefits from the government. By these measures, most of the country's beggars will find it difficult to make the poverty list. 

The Planning Commission's criteria shows their lack of concern for people but also shows their unawareness about the cost of living in the country. How can a person afford a nutrition content of 2400 calories, on just about about 35 cents? 

This criterion grossly underestimates or rather ignores other expenses like housing, clothing, and medication. Where in Urban India one can find housing for less than Rs 600 ($14) given the rent of an average rent can range from $4,000 to $12,000 a month? The Planning Commission fails to account for the very basic amenities of life for the poor. This is highly disappointing, as the criteria for deciding BPL fail to capture the cost of bare minimum amenities for survival. 

If we push the criterion up to the international standard spending of $1.25 (PPP adjusted) a day, the Planning Commission estimates about 45% of the Indian population is extremely poor. If the daily income per head is $2 ,then the family is described as poor and about 80 percent of Indian population is poor by this standard. The United States, for instance, has hardly anyone living below this spending level of a dollar or two per day. The USA follows its own national poverty line, an income over $26,000 a year for a family of 5, which is well above the international line of $1.25 a day. 

If the level of poverty can’t be reduced, then it would be a better practice to lower the criteria to a more measureably correct figure.

Photo Credit: Bargate 1