Planning Commission ropes in McDonald’s to eradicate poverty

New Delhi. Heralding a new era in public-private partnership, Planning Commission has decided to partner with fast-food restaurant chain McDonald’s in an attempt to remove poverty from India. McDonalds will soon give employment to a poor Indian and pay him one McAloo Tikki™ in kind, which costs at least 20 rupees even during Happy Hours, thus meeting the threshold set by the Planning Commission to identify urban poor.

“Since India is growing at a rate of at least 9 percent, we are hopeful of at least one McDonald’s outlet in each urban Indian city soon,” Montek Singh Ahluwalia, Deputy Chairman of Planning Commission said after undertaking some complex mathematical calculations, “Clearly McDonald’s would need more employees and we thought it was a perfect opportunity for us to join hands.”
If a person alive in India can afford this Tikki, and only this Tikki and nothing else for the whole day, he is not poor.
As per the agreement between the government and the fast-food restaurant chain, McDonald’s will be given a list people living below poverty line in the vicinity of an outlet, and the restaurant will then employ them gainfully for a salary of one McAloo Tikki™ a day. Since the market price of one such Tikki is at least 20 rupees, the employee would thus no longer remain poor in the eyes of the government.
Sources at McDonald’s confirmed the partnership and expressed confidence of employing all such urban poor at their outlets.
“Anyone not earning even 20 rupees a day is surely quite hungry. We can easily give such a person a job of cleaning the leftovers,” a McDonald’s official said, “We get a lot of urban rich at our outlets who order more than they can eat.”
The official clarified that US based McDonald’s would never get into such an arrangement with the US government as the poverty threshold in US was at least 30 US Dollars per day and non-cash benefits were not counted as income while measuring poverty.
“But India is not US; even the government here has clarified it many times recently,” the official pointed out.
McDonald’s could launch this employment scheme at their Colaba outlet in Mumbai next weekAn intensive manhunt to find a person earning below 20 rupees per day and alive in the area has been launched by the CBI for this purpose. No success was reported till reports last came in.

But the government has dismissed such issues as teething problems and hopes to kick off the partnership in other cities soon. Post this arrangement, government is hopeful of bringing down the number of urban poor to levels matched by those in developed countries, thus paving the way for India to become an economic superpower.


Shining & starving

Friday, August 26 2011
Under neoliberalism, income and regional disparities have got bloated to a point where the country’s rich and the poor live in two separate worlds.

[Frontline |], 26 August 2011


Under neoliberalism, income and regional disparities have got bloated to a point where the country’s rich and the poor live in two separate worlds.

A TAWDRY, low-minded elitism always comes naturally to our corporate media. Even so, one is astounded at the depths to which many newspapers stooped while celebrating the 20th anniversary of Manmohan Singh’s 1991 Budget, then as Finance Minister, which launched India on the economic policy course of liberalisation, privatisation and globalisation (LPG). A major national daily listed, without the slightest hint of irony, the five sectors that have seen “the biggest and most visible effects” of LPG: aviation, mobile telephony, cable television, outsourcing, and automobiles. This, when less than 5 per cent of Indians can fly, or own a car. (True, mobile phones have multiplied greatly, but it is no sign of progress that India has at least twice as many cellphones as toilets.)

Many other papers revelled in India’s globally acknowledged status as an “emerging economy”, whose gross domestic product (GDP) has risen over two decades of neoliberalism from the 12th rank in the world to the 10th in absolute terms, and from the ninth to the fourth rank in purchasing-power parity. But few bothered to remind readers that in per capita terms and Human Development Index ranking, India still belongs to the bottom quarter of the world’s nations.

No newspaper talked of the huge human toll claimed by the growth process, including the suicide of 200,000 farmers over 12 years (an unprecedented tragedy in history), the uprooting and marginalisation of millions of vulnerable people, including Adivasis, and rising unemployment and informalisation of work, which is causing great human misery and insecurity. There was, of course, complete silence on neoliberalism’s links with sleaze, cronyism and crime – including “regulatory capture” in sectors such as power, petroleum, insurance and telecom. These have been on full, ugly display in the Harshad Mehta- engineered stock market scams and the Enron scandal of the 1990s, the great telecom scams and public-sector sell-offs (Videsh Sanchar Nigam Limited or VSNL, Centaur Hotel, Modern Bakeries, and Balco) of the 2000s, and the more recent 2G spectrum, Lavasa, Indian Space Research Organisation (ISRO)-Antrix, and the Krishna-Godavari gas pricing scandals.

It is only appropriate to draw up a 20-year balance sheet of what the LPG package has delivered. The primary, if not the sole, virtue claimed on behalf of neoliberal policies is that they have produced high GDP growth. However, the connection between economic policy and GDP growth is not straightforward, but mediated through many factors such as high investment and savings rates, larger foreign investment flows, improved infrastructure, and better export opportunities. The 1980s also saw high growth in India, though there was no neoliberal domestic regime then.

India’s recent growth cannot be primarily attributed to the unleashing of the “animal spirits” of entrepreneurs, which were supposedly locked up under the earlier “licence-permit raj”. This pejorative description always grossly exaggerated the degree of regulation exercised by the state. Our businessmen long ago mastered the art of bypassing or subverting regulations. Now there is active collusion between business and politics.

Recent policies have facilitated GDP growth, but this growth is of poor quality and extremely uneven. It is skewed in favour of services, which now account for over 50 per cent of national income. Agriculture, on which three-fifths of the people depend for livelihood, has declined in size to under 20 per cent of GDP and is in the grip of both an economic and an ecological crisis. Industry has grown far too slowly to be able to absorb surplus labour from agriculture.

High GDP growth has largely benefited the top 10 to 15 per cent of India’s population, depressed employment, and failed to raise the incomes of the majority, let alone substantially reduce income poverty. According to the most optimistic official estimate (that of the Tendulkar committee) rural poverty fell from 50.1 per cent in 1993-94 to 41.8 per cent in 2004-05. In urban areas, poverty declined from 32.6 per cent to 25.7 per cent over the same period. Many capable economists have questioned these numbers on methodological grounds as far too low.

However, even assuming that the figures are correct, the decline in poverty was at best modest. This means that nearly 400 million Indians continue to live at or below an animal level of subsistence, consuming fewer calories than needed to keep body and soul together. It is simply unacceptable that at the end of the two highest growth decades in recent history, India still has the largest number of dirt-poor people anywhere in the world – as it did in 1991.

These numbers hide non-income forms of poverty and deprivation, including dispossession from land and other natural resources, extensive ecological destruction, widespread and severe malnutrition, social bondage, unhealthy dependence on powerful exploiters, gender-related poverty, compulsion to drink unsafe water and live in unhygienic conditions, and so on. One-half of India’s children are malnourished and two-fifths of its adults have an abnormally low body-mass index. Such deprivation undermines the ability of people to develop their elementary human potential. Life with dignity and acquisition of the capabilities that demarcate human beings from other species remain impossible for hundreds of millions of Indians. Their number has grown over two decades as the natural base of the economy, on which the poorest people depend, has got degraded and common property resources have been increasingly privatised. This represents a huge social waste.

Under neoliberalism, inequalities of income and wealth and regional disparities have got grotesquely bloated to a point where two Indias have emerged: an enormous cesspool of poverty, stagnation, social backwardness and acute deprivation, which covers much of the country’s heartland; and islands of high growth, and moderate and rising social indices in parts of southern and western India. Because there is withdrawal of public investment, no correctives are being applied, especially to regional imbalances. India has some of the world’s lowest rates of personal income and corporate taxation. Instead of significantly rising, the share of direct taxes in GDP has recently decreased.

Social Darwinism

Obscenely high disparities are socially undesirable in themselves. They also aggravate inequalities in social opportunity, putting the already disadvantaged at a further disadvantage. In India, inequalities strongly cascade at each stage of life: if you are poor, you have progressively less access than the rich to nutrition, health care, education, employment, and other social services. Yet, no political party is demanding an ‘incomes policy’.

Neoliberalism is distorting our social and political discourse in various ways. It has created a new secular religion – GDPism, or worship of rapid GDP growth as an end in itself, regardless of its social, economic, political and environmental costs. It is often misnamed “reform”, a term used even by its critics though reform means making things better.

Under neoliberalism’s sway, the “greed creed” is growing rampantly. The elite is embracing the ideology of social Darwinism, or the survival of (only) the fittest. It has great antipathy towards any notion of human solidarity and the idea of justice and equality of rights and entitlements. It wants a militarised “iron-fist” state to protect itself against the poor.

Neoliberalism is undermining social cohesion. It is also marginalising and disenfranchising the poor from participating in social life. It is only when they wage arduous battles to defend livelihoods and civic and political rights that they get heard. In contrast, the rich are becoming more aggressive in extending their privileges and demanding and getting generous tax breaks and state protection. Their political influence has never been greater. India increasingly resembles the United States’ Gilded Age when Robber Baron capitalism prevailed and imposed a heavy toll on society.

At this rate, India will soon become structurally incapable of developing a shared sense of nationhood. An untutored sense of community, which is not drilled into children through chauvinistic textbooks that describe India as the greatest civilisation ever, can arise only from relative equality of life chances and basic parity in entitlements amongst people.

A notion of common citizenship and shared destiny, which goes beyond participation in electoral processes, cannot develop in a divided society where the chasms are widening under neoliberalism’s ruthlessly inequality-enhancing influence. No wonder all manner of narrow and parochial identity politics, as well as superstition and obscurantism, are thriving in India today. We are paying an exorbitant price for neoliberalism – including enormous waste of precious human potential, people’s suffering, rising gender inequalities, growth of irrational faith, and a weakening of human solidarity and the foundations of political democracy.

Neoliberalism is also imposing huge ecological costs on India through the rapid melting of the Himalayan glaciers, loss of prime natural forests, degradation of land through reckless mining and the overuse of chemicals in agriculture, extensive air and water pollution, poisoning of all our major rivers, overuse of groundwater, loss of priceless biodiversity, and rising greenhouse gas (GHG) emissions.

Driven by a luxury consumption boom under neoliberal policies, India’s emissions are growing twice as fast as the rest of the world’s, aggravating and accelerating climate change. India is now the world’s fourth biggest GHG emitter. Indians, already vulnerable to climate change because of geographical and social factors and lack of resources for adaptation, will become its worst victim. Continuing along the neoliberal course means shooting ourselves in the foot.

How do biodiversity and poverty relate? An explorative study

This study indicates that two intervals exist: biodiversity is being lost while human well-being is improved and poverty is initially reduced, and secondly, biodiversity loss is reaching a critical value whereby production drops and human well-being and poverty are both affected negatively. The first interval appears in non-vulnerable ecosystems, the second one in ‘brittle’ ecosystems where poverty is often concentrated.

The End of Poverty

The aphorism “The poor are always with us” dates back to the New Testament, but while the phrase is still sadly apt in the 21st century, few seem to be able to explain why poverty is so widespread. Activist filmmaker Philippe Diaz examines the history and impact of economic inequality in the third world in the documentary The End of Poverty?, and makes the compelling argument that it’s not an accident or simple bad luck that has created a growing underclass around the world. Diaz traces the growth of global poverty back to colonization in the 15th century, and features interviews with a number of economists, sociologists, and historians who explain how poverty is the clear consequence of free-market economic policies that allow powerful nations to exploit poorer countries for their assets and keep money in the hands of the wealthy rather than distributing it more equitably to the people who have helped them gain their fortunes. Diaz also explores how wealthy nations (especially the United States) seize a disproportionate share of the world’s natural resources, and how this imbalance is having a dire impact on the environment as well as the economy. The End of Poverty? was an official selection at the 2008 Cannes Film Festival.

Global poverty did not just happen. It began with military conquest, slavery and colonization that resulted in the seizure of land, minerals and forced labor. Today, the problem persists because of unfair debt, trade and tax policies — in other words, wealthy countries taking advantage of poor, developing countries. Renowned actor and activist, Martin Sheen, narrates THE END OF POVERTY?, a feature-length documentary directed by award-winning director, Philippe Diaz, which explains how today’s financial crisis is a direct consequence of these unchallenged policies that have lasted centuries. Consider that 20% of the planet’s population uses 80% of its resources and consumes 30% more than the planet can regenerate. At this rate, to maintain our lifestyle means more and more people will sink below the poverty line. Filmed in the slums of Africa and the barrios of Latin America, THE END OF POVERTY? features expert insights from: Nobel prize winners in Economics, Amartya Sen and Joseph Stiglitz; acclaimed authors Susan George, Eric Toussaint, John Perkins, Chalmers Johnson; university professors William Easterly and Michael Watts; government ministers such as Bolivia’s Vice President Alvaro Garcia Linera and the leaders of social movements in Brazil, Venezuela, Kenya and Tanzania. It is produced by Cinema Libre Studio in collaboration with the Robert Schalkenbach Foundation. Can we really end poverty within our current economic system? Think again.

Poverty Estimates in India

Poverty Estimates in India: Old and New Methods, 2004-05 is the title of a new working paper published from theIndira Gandhi Institute of Development Research (IGIDR), Mumbai. It has been co-authored by Durgesh C. Pathak, a post-doctoral fellow whom I have been mentoring for the last two years, and myself. This paper is dedicated to the memory of Late Professor Suresh D. Tendulkar who passed away recently on 21 June 2011. Below I give excerpts that draw from the two quotations  that the paper begins with, the abstract, introduction and concluding remarks.

The poor are a part of necessary furniture of the earth, a sort of perpetual gymnasium where the rich can practice virtue when they are so inclined. – Francesco Guicciardini(Discorsi Politici)
But I, being poor, have only my dreams;
I have spread my dreams beneath your feet;
Tread softly because you tread on my dreams…
– W. B. Yeats
This paper provides estimates of poverty and inequality across states as also for different sub-groups of population for 2004-05 by using the old and new methods of the Planning Commission. The new method is critically evaluated with the help of some existing literature and its limitations discussed with regard to doing away with calorie norm, use of median expenditure as a norm for health and education when the distribution is positively skewed, difficulty in reproducing results for earlier rounds acting as a constraint on comparisons, and using urban poverty ration of the old method as a starting point to decide a consumption basket. More importantly, it discusses the implications on financial transfers across states if the share of poor is only taken into account without accounting for an increase in the total number of poor. Despite these limitations, on grounds of parsimony and prudence the state-specific poverty lines suggested in the new method, as also in the old method, are used to calculate incidence, depth (intensity) and severity (inequality among poor) estimates of poverty for different sub-groups of population, viz., NSS regions, social groups and occupation groups.
In India, the quinquennial rounds of national sample survey (NSS) of consumption expenditure have been instrumental in providing us with an estimation of head count ratio. The Report of the Task Force on Projections of Minimum Needs and Effective Consumption Demands (Government of India, 1979) looked into the age, sex and activity specific nutritional requirements and arrived at a per capita norm of 2400 calorie for rural and 2100 calorie for urban and based on this a monthly per capita expenditure (MPCE) of Rs.49.09 in rural and Rs.56.64 in urban was identified as the poverty line for 1973-74. This was updated to accommodate price changes over time. The Report of the Expert Group on Estimation of Proportion and Number of Poor (Government of India, 1993) proposed the use of independent poverty lines for each state and updating them by looking into the state specific changes in prices. This formed the basis for official estimates of poverty provided by the Planning Commission till recently (hereafter, old method).

Some of the criticism of this approach is that the updated prices may not represent the calories norm that they were initially pegged to,  that the calorie norms should change because of demographic shifts in age and sex and change in occupational patterns, that basic requirements like health, education, sanitation and housing are not included in the calculation of poverty line, that a reference period of 30 days may not be appropriate for low frequency items of consumption expenditure among others. These have been partly addressed in the Report of the Expert Group to Review the Methodology for Estimation of Poverty(Government of India, 2009) leading to a new set of poverty estimates for the year 2004-05 that have now been accepted by the Planning Commission (hereafter, new method).

The current exercise focuses on three points. First, it discusses critically the new methodology in the light of a brief review of some recent literature by various scholars. Second, it analyses the change in shares of poverty across states and union territories (hereafter, states) that will occur due to this shift. It also tries to briefly hint the possible repercussions of these changes on poverty reduction efforts in states.  Third, it provides estimates of proportion of poor (head count ratio or incidence of poverty), depth (poverty gap or intensity) and the severity (poverty gap squared or inequality among the poor) at various levels of disaggregation like states, NSS regions, social groups and occupational categories.

Concluding Remarks
The Planning Commission accepted the suggestions by an Expert Group that it had constituted leading to a new method for estimating poverty in India using NSS’s consumption expenditure data for 2004-05. The new method replaces the uniform recall of 30 days for all consumption items to a mixed recall where consumption of five low frequency items were collected for the last year (365 days) and appropriately adjusted to get a monthly per capita expenditure. It also takes into consideration health and education needs that the old method had not incorporated in its calorie norm. While doing these, it also opened up a number of other issues.

First, it did away with the benchmarking of a poverty line with a calorie norm that the old method was based on. They did not let the calorie norm go away totally. A reference is made to an FAO (Food and Agriculture Organization) calorie norm being achievable around its poverty line, but then this norm is for light and sedentary activities that may not adequately capture the energy needs of the poor who put in hard labour.  Second, while factoring in health and education expenditure is a positive step, using median expenditure as a norm for a positively skewed expenditure distribution may not represent the actual requirement of a poor person.  Third, having done away with a calorie norm, it begins with the poverty ratio for urban India from the old method as given. Using this ratio on the mixed recall it generates a consumption basket at the aggregate level for urban India and then uses this to generate a poverty line for states around this basket. This means that instead of using state estimates to compute a weighted all India average, it begins with the latter. A bottom-up method is replaced with a top-down approach. Fourth, the computation of consumption basket requires use of data from other rounds of NSS as also from other sources. The whole procedure is quite cumbersome and replicating it for earlier rounds or even for thin rounds is difficult and in many cases not possible. This will also have implications on the usage of time series poverty trends in macro modelling.

From a policy perspective, the new method will lead to change in share of poor. If financial transfers across states do not account for an increase in the number of poor or have a budget constraint then this means that the poorer states would end up getting less.
Despite these limitations, on account of pragmatic considerations as also for parsimony and prudence, the state-specific poverty lines have been used for computation of poverty at various sub-groups. This has been attempted in this paper for NSS regions, social groups and occupation groups for both the old and new methods. The relatively higher incidence of poverty among scheduled tribes in rural areas and scheduled castes in urban areas for social groups and that of agricultural labourers and other labourers in rural areas and casual labourers in urban areas for occupation groups have been discussed.
Though they do not play any active role in poverty estimation, yet the poor have maximum stake in poverty analysis as they are at the receiving end. Thus, a move towards a bottom-up approach where the poor get involved in the understanding of vulnerability, particularly in the implementation of policies (including on identification of poor and poverty alleviation) so as to bring in greater accountability and transparency is called for . In its absence, every attempt to define and measure poverty is like treading on the dreams of poor. If poverty measure chosen is going to help them, at least some of these dreams would become a reality. Otherwise they dry like leaves fallen from trees.

Why India is Losing its War on Hunger

Why India is loosing its war on hunger (download)

India is home to a quarter of the world’s hungry people. Since the Green Revolution, the country has produced enough food to feed itself, but it has not yet been able to wipe out mass hunger. Currently, 40 per cent of the population is malnourished – a decline of only 10 per cent in the past three decades.

Stellar economic growth has not delivered on its promise for poverty reduction and food security. Following a series of neoliberal economic reforms in 1991, India’s GDP has doubled, but despite this, 53 million more people now go to bed hungry every night.

To make matters worse, food prices have recently soared. Poor families, who spend more than 60 per cent of their incomes on food, are increasingly struggling to stretch their meagre household budgets.

Unfortunately, small-scale producers have not benefited from high retail prices for food either, as they usually low prices for their produce. Clearly, the country is in the midst of both an agrarian crisis and a nutrition crisis.

Oxfam International Case Study

Author: Swati Narayan, Independent food and education policy specialist

How Much Poor Is Poor: Even Beggars Are Not Poor Enough!

By Shahidur Rashid Talukdar

19 May, 2011

How much poor is poor enough? If you ask this question to the Planning Commission of India, you might be highly disappointed at the response. Many of India ‘s poor die out of hunger and because they don’t have acceptable housing. Some of India ‘s poor even 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 considered poor enough to be considered as living below poverty line (BPL).

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 and 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 (BPL) 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 . 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 cannot be termed as poor enough and will not be entitled to receive benefits meant for poor

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. These criteria for persons living below poverty line (BPL) explain very well how half of India may starve to death but the Government may say India is not poor. By these measures, most beggars will find it difficult to make it to the list of poor people.

The Planning Commission’s criteria of daily spending of less than 50 cents as an indicator for poverty not only 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 , a minimum requirement for the rural India , from a meager 15 rupees (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 house is no less than Rs 3000 ($ 65) 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 criterion.

Comparing these figures with the developed nations, we can understand the relevance of the BPL criteria. 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 $26000 a year for a family of 5, which is well above the international line of $ 1.25 a day.

So what can one think of the Planning Commission’s stand: Is it sheer ignorance of the reality or a calculated strategic measure? If the level of poverty can’t be reduced, lower the criteria to such an extent that most of the poverty will remain underestimated and hence unreported and ultimately, the problem will be ignored or at least it will not draw as much attention as it otherwise would.

But not everyone is as ignorant as the planning Commission’s statisticians. The Supreme Court once again has noticed the inadequacy of the criteria for measuring the BPL level. The Court has directed the commission to re-evaluate its criteria for measuring poverty across the nation.

Thanks to the Supreme Court for intervening in this case. Otherwise, poor people would be dying hungry and shelter-less, while the Planning Commission would say they are not poor enough!

Shahidur Rashid Talukdar is a PhD student in Economics at Texas Tech University, Lubbock, TX. He may be reached at . He blogs at:

India down as World Bank ups its poverty threshold

ENS Economic Bureau Posted online:

Wednesday, August 27, 2008

The number swelled to 456 million in 2005 from 420 million in 1981

NEW DELHI, AUGUST 26: Compared with 1981, 36 million more Indians are

now living below the poverty line, according to the new poverty

estimate released by the World Bank. Based on new data and higher

costs of living across the world, the World Bank has revised its

threshold of poverty to less than $1.25 a day, up from the previous

measure of one dollar a day. And this redefinition paints a sorry

picture of the poverty scenario for Indian policymakers in particular.

As per the new definition, the number of po

Technorati Tags: ,,

or in India swelled to

almost 456 million people in 2005, up from 420 million in 1981. In

relative terms, however, the percentage of Indian poor has declined

from 60 per cent in 1981 to 42 per cent in 2005.

There is, however, a significant mismatch between the Indian

government’s official poverty estimates in 2004-05, which were to the

tune of 301.72 million people or 27.5 per cent of the total

population. However, unlike the World Bank figures, India’s official

estimate is based on the average calorie intake per day as opposed to

average daily wages. Speaking to The Indian Express, Pronab Sen, chief

statistician of India, said, “We don’t accept the World Bank estimate

of poverty since it is based on a single-figure formula, which is not

suited to the Indian situation. It doesn’t take into account the price

differentials between urban and rural areas or even between different

states.” The World Bank says its redefinition of the poverty line is

not arbitrary. It is the average poverty line found in the poorest

10-20 countries, it says. In the global context, the total number of

people living on less than $1.25 a day is 1.4 billion or roughly 26

per cent of the world population.


WHILE THE number of poor according to the new definition has grown,

that of people living on less than a dollar a day has declined to

266.5 mn (24%) in 2005 from 296 mn (42%) in 1981

THIS MEANS the number of people just above this line is still very

high and it is not falling

THOUGH A high growth has helped alleviate poverty, the Bank also

highlighted the importance of making growth more inclusive

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