Corporate Law

The Poverty Line: An Instrument of Indian Politics (1/2)

Mrinali Komandur

The implicit assumptions in the method adopted to arrive at the Poverty Line, appear designed to arrive at findings that match the ideological proclivities of those in power


India has battled poverty for several decades. The preoccupation with and the glorification of poverty among politicians and the elite can be traced back to the pre-Independence period, the Mahatma himself being no exception. Even today, the government allocates a large part of the budget towards policies that are directed towards the poor. It comes as no surprise then that estimates of how many people are poor at a given point in time and how poverty should be measured have been the subject of several debates. In this post, I argue that the determination of the poverty line and the estimation of poverty are not merely value-neutral outcomes of the ‘discipline’ of statistics, but involve politically motivated choices that seek to achieve predetermined ends. The scope of this post is limited to India although the issues highlighted are not endemic to India.

Estimating the Poverty Line

Until recently, the planning commission was in charge of estimating poverty. In 2005, the Commission set up a committee headed by Suresh Tendulkar to report on the method of estimating poverty. The Tendulkar line, based on average calorie consumption per day of 2400 calories for rural areas and 2100 calories for urban areas, estimates that the daily expenditure would be Rs 27.2 in rural areas and Rs. 33.3 in urban areas. Data is collected by the National Sample Survey Office (NSSO) using sample surveys. Those below this poverty line are classified as poor. Using this line, poverty in India was estimated to be 21.9% in 2011-12. The line has been criticised as being too low, arbitrary, incapable of identifying the poor and failing to take into account the transient poor (those just above the line are not considered poor) and has been politicised by both the right and the left for describing the poor as only those who are in abject poverty, the line measuring bare and not adequate life.

The UPA led government set up the Rangarajan committee in 2012, which raised the poverty line to Rs. 32 in rural areas and Rs. 47 in urban areas, taking India`s poverty count to 29.5% as against Tendulkar`s 21.9%. The NDA government replaced the planning commission with the NITI Aayog in 2015, reopening the poverty line debate. The NITI Aayog has been in favour of using the Tendulkar poverty line, as against the more recent and revised Rangarajan line although they admit that the line is set very low.  What is the reason for this choice?  I argue that the choice of a lower poverty line is but one example of governments interfering with data and statistics to gain political mileage, in this case, to show that the poverty rates are falling and government policies have been successful to bring down the poverty.

The politics of measuring poverty is grounded in the politicisation of poverty itself. As Prof. Upendra Baxi argues, “..people are not naturally poor, but are made poor” by an invisible process through which poverty is produced and reproduced, the word ‘poverty’, being passive, hiding the ways in which it is considered just and reasonable by those who enjoy power that some people remain impoverished for generations.  The main stakeholders in the fight against poverty are the government and the political party in power (governments that have adopted pro-poor policies have enjoyed wide success to that extent that even Narendra Modi, who described MGNREGA as the “living monument of UPA`s failure” in 2014 now embraces it), international financial institutions such as the World Bank that lends to poor countries, that have gained leverage internationally by playing the fight against poverty card and third, the masses, to whom narratives of the State`s great fight against poverty are sold. Not taking away from ground realities, this implies that there is a lot at stake to ensure that poverty is kept alive and continues to be the country`s primary socio-economic challenge.

By extension, measuring poverty becomes important as it has a major effect on trends and estimates on  poverty data that in turn serve as political capital, first, to determine the effectiveness of government policies in reducing poverty by making comparisons, second, to determine allocation of the centre`s funds to states, third, to identify who should be eligible for entitlements, and fourth, to provide legitimacy to outcomes that seek to maintain and strengthen power in the hands of those who have enjoyed the dominant position in politics.

The Politics of Statistics

My first bone to pick is with the manner in which the estimate arrived at is presented as a pure economic statistic, a product of science, having no value judgment. Presenting them in this manner makes poverty figures difficult to challenge as science has for long been considered to be objective and independent. In order to justify the value neutrality of the Tendulkar method, it has been argued by members of the planning commission that the Tendulkar line is similar in Purchasing Power Parity to the international poverty line prevailing at that time of $1.25 a day. But Neutrality is not neutral. Tendulkar himself went on to claim that his poverty line was ‘adequate’ to cover not only food intake sufficient to alleviate malnutrition, but also expenditure on education and health. In identifying expenditure on health as a necessity but allowing only Rs 1 for health expenditure per day in his estimate, Tendulkar is making a judgment by defining poverty as the absence of basic health. The assumption that it is ‘adequate’ for the poor to live on so little subsisting on cheap food of only calories, poor living conditions and poor quality of education also demonstrate that the method is biased.

The standards used to measure poverty reflect objectives of government policy which are the products of political organisation and the influences from within and outside the government. For example, a press release by the planning commission before the 2014 general elections stated that poverty declined faster during the period when the Congress-led UPA was in power. According to the release, the poverty line had actually gone marginally between 1993-94 and 2004-05 to 37.2 from 27.5 % and fell to 21.9% between 2004-04 and 2011-12. This reduction required that the previous estimates be revised to a show a higher percentage of poverty in the period preceding the 2004 general elections. The poverty line was also reduced to Rs. 28.35 in urban areas and Rs. 22.42 in rural areas for 2011-12. These figures were then used by Congress spokespersons to proclaim that the fall was the result of the Garibi Hatao mission that began in 1971 which it had successfully implemented through various schemes for nearly four decades.

The acceleration in the rate of poverty reduction in India during the 1990`s from 36% in 1993-94 to 26% in 1999-2000, has been attributed to the high growth rates and the economic reforms of the 1990`s.[1]  It was (is) argued that growth, by itself, has a trickle down effect and the trickle down to the poor will be stronger if the growth is stronger.  The trickle down will create more jobs, and will increase incomes. Therefore, the correct approach to alleviate poverty is not targeted redistribution, but what has been called ‘pro-poor growth’ presupposing a growth focused strategy.  By using these figures, “the agents and managers of contemporary economic globalisation are presented as driven by the moral imperative of poverty alleviation[2] to legitimise and glorify the state`s efforts to promote economic growth and development.

Not only was the reduction in poverty overstated, poverty alleviation was cleverly reoriented by making it dependent on economic growth, a more politically feasible approach that benefits the rich, with the hope that poverty will fall as a by product. What the Planning Commission chose to ignore was that in 1998, the poverty increased by 6 points to 42% although the consumption and income had grown at 4.5 % per annum, indicating an inverse relationship between income growth and poverty reduction. Instead, the recall period was changed during this period.[3] A shorter recall period was selected that inflated the consumption expenditure decreasing the numbers below the poverty line. Angus Deaton and Jean Dreze demonstrate how the decline was lesser than the official estimates due to this change but the government continued to defend the official estimates.[4] According to Deaton and Kozel, this choice of the recall period was politicised. Thus, implicit assumptions in the method adopted appear designed to arrive at findings that match the ideological proclivities of those in power. The fall in poverty has been frequently attributed to economic growth in the era of the Developmental State, the latest coming from the Rangarajan committee in 2014, but such assertions have rarely been supported by scientific or statistical data. This may instead be seen, as Partha Chaterjee argues, as an attempt to ‘obtain consent for capital’s passive revolution’ by projecting economic growth as growth for everyone.

Mrinali Komandur is a fourth-year B.A., LL.B (Hons.) student at the National Law School of India University, Bengaluru.

[1] Deaton and Kozel, Data and the Dogma: The Great Indian Poverty Debate, 20(2) World Bank Research observer 177, (2005).

[2] U. Baxi, Global Development and Impoverishment, The Oxford Handbook of Legal Studies, 2 (2005).

[3] G. Datt and M. Ravallion, Is India`s Economic Growth Leaving the Poor Behind, 16(3) Journal of Economic Perspectives 89, (2002).

[4] Deaton and Dreze, Poverty and Inequality in India, Economic and Political Weekly 3729, (2002).

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