To fix BPL, nix CPL : P. Sainath

The Hindu

To get the Below Poverty Line figures in perspective, we need to closely monitor the numbers driving the Corporate Plunder Line.

One Tendulkar makes the big scores. The other wrecks the averages. The Planning Commission clearly prefers Suresh to Sachin. Using Professor Tendulkar’s methodology, it declares that there’s been another massive fall in poverty. Yes, another (“more dramatic in the rural areas”). “Record Fall in Poverty” reads one headline. The record is in how many times you’ve seen the same headline over the years. And how many times poverty has collapsed, only to bounce back when the math is done differently.

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And so, a mere 29.9 per cent of India’s population is now below the official poverty line (BPL). The figure was 37.2 per cent in 2004-05. The “line” is another story in itself, of course. But on the surface, rural poverty has declined by eight percentage points to log in at 33.8 per cent. That’s down from 41.8 per cent in 2004-05. And urban poverty fell by 4.8 percentage points from 25.7 to 20.9 per cent in the same period. Millions have been dragged above the poverty line, without knowing it.

Undoing bogus methodology

Media amnesia fogs the “lowest-ever” figures, though. These are not the “lowest-ever.”

“Kill me, I say,” said Prof. Madhu Dandavate in 1996, chuckling. “I just doubled poverty in your country today.” What that fine old gentleman had really done, as deputy chairperson of the Planning Commission, was to jettison the bogus methodology peddled by that body before he came to head it the same year. Even minor changes in methodology or poverty line can produce dramatically differing estimates.

The fraud he undid was “an exercise” bringing poverty down to 19 per cent in 1993-94. And that, from 25.5 per cent in 1987-88. These were the “preliminary results of a Planning Commission exercise based on National Sample Survey data” (Economic & Political Weekly, January 27, 1996). Now if these figures were true, then poverty has risen ever since. And remember, highlighting that historic fall was an honest Finance Minister. The never-tell-a-lie Dr. Manmohan Singh. One business daily ran a hilarious “exclusive” on this at the time. Poverty falls to record low of 19 per cent, “government officials say.” This was the best news since Independence. But the modest officials remained anonymous, knowing how stupid they’d look. In the present era, they hold press conferences to flaunt their fraud.

The “lowest ever at 19 per cent” fraud was buried in the ruins of the April 1996 polls. So was the government of the day. The “estimate” was not heard of again. Now we have the 29.9 per cent avatar. Surely that’s a rise of 10.9 percentage points in 16 years? Or just another methodological fiddle.

However, the new Planning Commission numbers have achieved one thing. They’ve united most of Parliament on the issue. Members from all parties have blasted the “estimates” and called for explanations.

There’s also the Tendulkar report’s own fiddles. As Dr. Madhura Swaminathan points out, the committee dumped the calorie norms of “2,100 kcal per day for urban areas and 2,400 kcal for rural areas.” It switched to “a single norm of 1,800 kcal per day.” And did so citing an “FAO norm.” As Dr. Swaminathan observed: “the standards set by the Food and Agriculture Organisation for energy requirements are for “minimum dietary energy requirements” or MDER. That is, “the amount of energy needed for light or sedentary activity.” And she cites an FAO example of such activity. “…a male office worker in urban areas who only occasionally engages in physically demanding activities during or outside working hours.”

As Dr. Swaminathan asks: “Can we assume that a head load worker who carries heavy sacks through the day is engaged in light activity?” — The Hindu, February 5, 2010.

Measuring poverty

The media rarely mention that there are other methodologies for measuring poverty on offer. Also set in motion by this same government. The National Commission for Enterprises in the Unorganised Sector (NCEUS) saw BPL Indians as making up 77 per cent of the population. The N.C. Saxena-headed BPL Expert group placed it at around 50 per cent. Like the Tendulkar Committee, these two were also set up by government. While differing wildly, all three pegged rural poverty at a higher level than government did. Meanwhile, we will have many more committees on the same issue until one of them gives this government the report it wants. The one it can get away with. (The many inquiries on farm suicides exemplify this.)

That the Planning Commission thought they could slip the present bunkum by sets a new benchmark for — and marriage of — arrogance and incompetence. First, they sparked outrage with their affidavit in the Supreme Court. There they defended a BPL cut-off line of Rs.26 a day (rural) and Rs.32 (urban). Now they hope to get by with numbers of Rs.22.42 a day (rural) and Rs.28.35 a day (urban).

The same year the government and planning commission shot themselves in both feet in 1996, a leading Delhi think tank joined in. It came up with the “biggest ever study” done on poverty in the country. This covered over 30,000 households and queried respondents across more than 300 parameters. So said its famous chief at a meeting in Bhopal.

This stunned the journalists in the audience. Till then, they had been doing what most journalists do at most seminars. Sleeping in a peaceful, non-confrontational manner. The veteran beside me came alive, startled. “Did he mean they asked those households over 300 questions? My God! Thirty years in this line and the biggest interview I ever did had nine. That was with my boss’s best friend. And my last question was ‘may I go now’?” We did suggest to the famous economist that battered with 300 questions, his respondents were more likely to die of fatigue than of poverty. A senior aide of the think tank chief took the mike to explain why we were wrong. We sent two investigators to each household, he said. Which made sense, of course: one to hold the respondent down physically, twisting his arm, while the other asked him 300 questions.

Now to the queue of BPL, APL, IPL, et al., may I add my own modest contribution? This is the CPL, or Corporate Plunder Line. This embraces the corporate world and other very well-off or “high net worth individuals.” We have no money for a universal PDS. Or even for a shrunken food security bill. We’ve cut thousands of crores from net spending on rural employment. We lag horribly in human development indicators, hunger indexes and nutritional surveys. Food prices keep rising and decent jobs get fewer.

Yet, BPL numbers keep shrinking. The CPL numbers, however, keep expanding. The CPL concept is anchored in the “Statement of Revenue Foregone” section of successive union budgets. Since 2005-06, for instance, the union government has written off close to Rs.4 lakh crore in corporate income tax. Over Rs.50,000 crore of that in the present budget. The very one in which it slashes thousands of crores from the MNREGS. Throw in concessions on customs and excise duties and the corporate karza maafi in this year’s budget sneaks up to nearly Rs.5 lakh crore.

True, there are things covered in excise and customs that also affect larger sections, like fuel, for instance. But mostly, they benefit the corporate world and the very rich. In just this budget and the last one, we’ve written off Rs.1 lakh crore for diamonds, gold and jewellery in customs duties. That sort of money buys a lot of food security. But CPL trumps BPL every time. The same is true of write-offs on things like machinery. In theory, there’s a lot that should benefit everybody: like the equipment hospitals import. In practice, most Indians will never enter the five-star hospitals that cash in on these benefits.

The total write-off on these three heads in eight years since 2005-06: Rs. 25.7 lakh crore. (See Table). That’s over half a trillion U.S. dollars. Not far from 15 times the size of your 2G scam. Or over twice the Coal Scam, the latest addition to the CPL. Look at the table and think about BPL estimates working on cut-offs of Rs.22.42 a day rural and Rs.28.35 urban. To fix BPL, nix CPL.

Kaun Banega Scorepati?

Jean Dreze, The Hindu, Op-Ed November 28, 2011

The Socio-Economic and Caste Census is supposed to “rank” rural households on a scale of ‘0 to 7.’ Pictured here are villagers at Maripalle, near Visakhapatnam. Photo: K.R. Deepak
The Socio-Economic and Caste Census is supposed to “rank” rural households on a scale of ‘0 to 7.’ Pictured here are villagers at Maripalle, near Visakhapatnam. Photo: K.R. Deepak

The National Food Security Bill makes a futile and counterproductive distinction between ‘Priority’ and ‘General’ households, even after excluding 25 per cent of the rural population.

There is no typo in the title of this article, but the term “scorepati” is perhaps confusing. By way of explanation, let me introduce three acquaintances.

Meena, age 50, lives in a two-room kaccha hut with her disabled husband Chhote Lal who studied up to Class 2. They own half an acre of unirrigated land and a goat. Meena is unable to take up any remunerated work as Chhote Lal needs constant care. Without any specific means of subsistence, they live on one meal a day.

Zafar, age 35, never went to school but he learnt to read and write in a night school. Aside from harvesting the odd sack of grain from his small patch of land, he earns a pittance as a weaver. The family is struggling to make ends meet and two of his five children work as child labourers.

Jeetu, age 45, lives on his own — his family deserted him as he suffers from HIV/AIDS. He has been left to his own devices, in a one-room brick shed on the outskirts of the village. He is too weak to work. Compassionate villagers give him rice from time to time, with some vegetables on festival days — everyone is waiting for him to die.

‘Zero score’ household

What do these people have in common? Answer: each of them belongs to a “zero score” household — a household that will get a score of zero in the Socio-Economic and Caste Census (SECC), if the Census reaches them at all.

The SECC is supposed to “rank” rural households on a scale of 0 to 7. A household’s score is simply the number of “deprivations” it has from the following list of seven: (1) living in a single-room kaccha house; (2) having no adult member between the ages of 16 and 59; (3) being a female-headed household with no adult male member aged between 16 and 59; (4) having a disabled member and no able-bodied member; (5) being a Scheduled Caste or Scheduled Tribe; (6) having no literate adult above 25 years; and (7) being a landless household deriving a major part of its income from manual casual labour. None of these criteria apply in the above examples.

After ranking households in this manner, a cut-off is supposed to be applied to identify “Priority” households — the main beneficiaries of the Public Distribution System (PDS) under the proposed National Food Security Bill (NFSB). For instance, if the cut-off is two, then Priority households will consist of all households with a score of two or more. The cut-off is supposed to be specified so that the share of Priority households in the population is around 46 per cent — the proportion of the rural population below the “Tendulkar poverty line” (about Rs.25 per person per day in rural areas), with a small margin for “targeting errors.” That, at any rate, seems to be the game plan as of now.

Adivasi households

Since Meena, Zafar and Jeetu have a score of zero, they are certain to be left out from the Priority list, even before the Census begins. The good news is that they are fictional characters. But it would be easy to find real-life examples of such situations, or of other stark cases of poor — even destitute — households being left out of the Priority list because they have a zero score. In fact, even households with a score of one are almost bound to be left out, since the cut-off is unlikely to be less than two.

The odd nature of this scoring system can be appreciated in more general terms by considering Adivasi (tribal) households — the most disadvantaged section of the rural population. Since most Adivasi households possess a little bit of land, however unproductive, and a mud house with at least two rooms, the first and last “deprivations” in the list will not apply to them (note that even land possessed as a matter of traditional rights, without legal title, is to be counted as “owned” by the SECC). Further, a large majority are likely to have at least one able-bodied male adult aged between 16 and 59 years — the second, third and fourth criteria will not apply to them either. It follows that most Adivasi households will have a score of only one, unless they are “lucky” enough to have no literate adult, in which case their score will shoot up to two. But even a score of two may not catapult them into the Priority club. And if it does, Adivasi communities will be oddly split down the middle, between “score one” and “score two” families — a very divisive situation.

Support from Antyodaya

This state of affairs is all the more absurd as the distinction between “Priority” and “General” households in the NFSB is wholly unnecessary and counter-productive. As it is, the Bill calls for 25 per cent of rural households to be entirely excluded from the PDS. Now, if the proportion of excluded households is as high as 25 per cent (instead of 10 per cent as the National Advisory Council had proposed), it is absolutely pointless to split the rest into two groups. It would be much simpler and more sensible to give common minimum entitlements to all households that do not meet the exclusion criteria. This approach would reinforce, instead of undermining, the positive trend towards a more inclusive PDS in many States — Tamil Nadu, Andhra Pradesh, Chhattisgarh, Rajasthan, Orissa, among others. Along with this, the poorest households could continue to receive special support under the Antyodaya programme, which is working reasonably well and should be consolidated — instead of being phased out as the NFSB comes into force.

This would not be the dream of a universal PDS, but it would still be relatively simple, practical and appealing. It would also resolve much of the alarming confusion that surrounds the Socio-Economic and Caste Census, NFSB, poverty lines, and related matters.

(The author is Visiting Professor at the Department of Economics, University of Allahabad.)