Poverty How much and how do you measure – Hooray it is higher – States get more money – Government scores brownie points – Where are the solutions – Darling?

Further to my earlier post on the much maligned poverty line – here is more on it.

The much awaited REPORT OF THE EXPERT GROUP TO REVIEW THE METHODOLOGY FOR ESTIMATION OF POVERTY is out; Commissioned by the Planning Commission, Government of India and published in November, 2009 and authored by Suresh Tendulkar, R Radhakrishna and Suranjan Sengupta.

Quoting from the report “The rural all-India headcount ratio derived as a population weighted average of state-level headcount ratios using the new poverty lines is 41.8 per cent compared to 28.3 per cent using the old poverty lines. All the state-level rural headcount ratios are higher using the new poverty lines than those in the earlier official estimates.”

The Tendulkar committee has fundamentally changed the way poverty has been measured so far in the country. If these estimates are applied to earlier data, then the all-India poverty line would have been 45.3%. Therefore poverty has seen a marginal decline in the last 15 years.

The most controversial point of the Tendulkar committee report is that it has abandoned the calorie-anchored estimates of poverty – true calorie intake and has no correlation to economic prosperity in relatively better off households, but that may not be true for the poorest who depend on manual labour for making a living.

The committee has also rationalized the basket of goods and services that are consumed by households at the poverty line. Finally the current poverty estimate pegs poverty at a per capita rural expenditure level of Rs15 per day up from the previous estimate of Rs12. Is that enough for a life with dignity is a big question mark. The current revision is still closer to a “starvation line” rather than a poverty line.

Two problems which have been ignored in thi study are the sheer absence of Insurance whether it is for health, life, vehicle, house, transport in rural areas; which we are so used to in urban India and the damage which can happen due to weather pattern changes– floods, hailstorm, drought. Urban India is more or less weather proof.

Urban India has seen several innovations in products or processes targeted at making our lives more productive, whether it is

Transport (large projects like the metro; small informal shared autos on Kolkata roads);

Safe drinking water (whether it’s the ubiquitous mineral water bottle, the 20 litre jar for domestic and small offices;

Communication (started with PCO booths and onto mobiles and more importantly the innovative schemes offered by the various service providers)

Health (Docs and Hospitals) – the effective physician-to-population ratio among India's better-off citizens is about 1 per 500, approximately the physician concentration in the United Kingdom. It is common knowledge that "India has enough physicians," while “many Indians, in fact, never receive the services of allopathic physicians at all”.

Education The choice that one sees in today’s towns in India, makes you wonder how things have changed in a couple of decades. When I graduated, there were three engineering colleges in the state and the fourth – the first private one had started operating out of a garage and its students did practicals, when the students at the government run engineering colleges went on summer holidays. Today the capital of that state has 40 engineering colleges.

With economic reforms and the government acting more as a regulator (however inept) rather than an implementer; Urban india has seen the results of the combination of entrepreneurship and private capital which have tapped into a large (300 million) and increasingly richer market.

Rural India, in contrast, is substantially poorer and lacks the infrastructure but has closer to triple the numbers. Enterpreneurship and private capital will do the same to rural india as it did to urban india.

What is required is for us to demonstrate models which are scalable in the areas of improved productivity, irrigation, safe drinking water, decentralized off-grid electricity production and supply, paraskilled health workers, e-market places for the goods of artisans and many such.

And the government needs to realize that selling stock in public enterprises and funding food for work is not a solution.

Rather diverting that money and using it to incentivize such models, will help entrepreneurs develop and demonstrate models which provide solutions that work in Rural India. With proven models, private capital will not hesitate to flow in.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime

The Suresh tendulkar Committee report is available here http://planningcommission.gov.in/eg_poverty.htm . Thank you Deepu, for sending me the report.