Sunday, September 7, 2014

Global Poverty Line of $1.25 a day. Does it matter?

Just when the internal political debate on Poverty line estimation fuelled by the release of Suresh Tendulkar’s Report (₹27/ day for rural and ₹33/day for urban) and its defence by the ruling UPA government with statements like –‘A meal for ₹5 can be easily found anywhere in Mumbai’, seemed to end, Sushri Mayawati slammed another such report by C. Rangrajan (₹32/day for rural and ₹47/day for urban) stating it to be nothing more than a joke on poor people. Such figures don’t make any sense until or unless it is mentioned that on it depends the future of 94 million beneficiaries. Rangrajan’s report takes into bracket of BPL beneficiaries around 94 million more Indians compared to Tendulkar’s report.
Let us take a pause from such domestic criteria and focus on international estimates and significance. The World Bank defines the global poverty line which is currently $1.25 a day calculated on the basis of 2005 PPP (Purchasing Power Parity). If u are not actually aware of what PPP is or how is it calculated, don’t bother yourself much with that, simply understand it as an Economist’s tool for statistical jugglery. Just for the information, Global poverty line is significant in order to gradually move towards achieving the goal of eradication of global poverty.
Now what I find amusing here is that we are planning and trying hard to achieve a goal together and globally without properly agreeing to it in spirit. Globally we might have agreed to a poverty line of $1.25 a day in letter though, but we all deep inside would agree that even after achieving this, poverty which we associate with  hunger, lack of opportunities to work, diseases, suicides, begging, crimes, poor education, etc will not be completely uprooted.
It’s not that I’m pessimistic about success. It is simply because I believe that poverty can’t be defined and understood and targeted just by defining an income level sufficient for someone to buy a pre-defined basket of products sufficient just for sustenance. Nobody wants just to survive, everybody wants opportunities to grow. Everybody unless finds opportunities for expanding his horizons be it related to income, savings, or what not, problems associated with poverty will remain.
Just a simple example will clarify why am I being pessimistic about the approach we have adopted for eradicating the global poverty. Remember that according to one of the Millennium Development Goals, the number of people living below the poverty line of $1 (1993 PPP levels) had to be halved between 1990 and 2015. Now consider the recent development mentioned below-
World Bank recently revised PPP index and obviously with that global poverty line will also be affected with that. By taking the World Bank-prescribed $1.25 as the poverty line on the previous PPP index, India had 402 million poor people in 2010 below poverty line. But with the revised PPP number, the Centre for Global Development's back of the envelope calculations put the figure at 102.3 million in 2010. See a drastic change of 300 million overnight. Overnight the MDG has been achieved just by some statistical jugglery.
Does it mean that overnight 300 million people will stop struggling with death anymore? Does it mean that about 300 million beggars will switch over to some earning job overnight? Does it mean that we will have to face about a 300 million poor kids less on the road near parking signals selling pencils, flowers, etc? Does it mean that overnight 300 million people will stop sleeping on the footpath? Does it mean they no longer have to shiver in chilling cold without clothes on their body? Does it mean that 300 million people more will have access to education and healthcare overnight? Does it mean that overnight slums will be converted to decent housing?
I don’t see ‘yes’ as an answer to any of the questions which naturally comes to us when we say- ‘Yoohoo India now has 300 million less poor people’ . If it is so, then why the hell are we trying to set goals which even after being achieved will not give any mental peace or satisfaction. Which even after being achieved change nothing on the ground level.
Such lines does nothing more than defining the funds required to be disposed off in the name of social sector schemes like Food Security Act and all. Just as the issue of Food Security Act has propped up, I believe such acts are doing more harm to the economy than any good. We can’t simply try to expand manufacturing and have Food Securities Act simultaneously. The person who is getting rice and wheat at ₹1/kg and ₹2/kg respectively why the hell will he work 8-10 hours a day and contribute in expansion of Indian economy (unless he is educated enough to understand and is sensible towards growth). I have personally started to feel the impact of FSA, on productivity and sincerity of labourer in industrial setup. Moreover such social sector schemes create dual market and in which breeds the corruption. Hence, such schemes must also be disposed off and funds must be diverted in targeting to provide employment opportunities, better health care and education.
Even in one of the stories of Akbar and Birbal it is mentioned that Akbar once asked Birbal to distribute funds to everybody in his kingdom to reduce poverty. Birbal was intelligent and smart enough not to do it without making them some effort to earn that money. He simply asked one to dig a pit and other to fill it for money. This might not have created any asset for the kingdom but it surely surly saved the ‘value of money’ from deteriorating. That was simply FSA in return of MNREGA.
It’s high time that we instead of being guided by such insignificant though eye-catching attractive figures start being sensible for creating opportunities for everybody to grow, to work, to educate, for a better heath and disease free India. India has recorded highest number of suicides in South East Asia in 2012 and that too majority of that is youth in 15-29 age group. We must tap the advantage of younger population, of the potential of demographic dividend and stop letting such numbers fool us. Our youth needs employment opportunities and not just $1.25 per day. The same is what mother goddess India is begging for. Listen and pay attention to her.