POVERTY: India: Playing with Poverty Statistics

May 17 2011
 Ranjani Iyer Mohanty is a writer and a business/academic editor. Her articles have been published in various international newspapers and magazines.


The poverty line for a given individual can be defined as the money the individual needs to achieve the minimum level of ‘welfare’ to not be deemed ‘poor,’ given its circumstances.”
This is how Martin Ravallion, director of the Development Research Group at the World Bank, defines the poverty line. In 2005, the World Bank revised the international poverty line up from $1 a day to $1.25 a day, but countries are allowed to set their own national poverty line. The Planning Commission has set India’s national line at 578 rupees a month, or the equivalent of 43 U.S. cents a day.
Even assuming only a charitable (to the government, that is) 30 days a month, that works out to less than 20 rupees a day. A half-litre packet of milk at Mother Dairy costs 10 rupees. One mango, those in season and heaped on carts by the side of the street, costs 10 rupees. And a cabbage …but no, your 20 rupees a day has already been spent. If you spend more than that, even on clothing or education or fuel, you cannot be termed as below the poverty line and therefore you are not eligible for BPL-related benefits and subsidies on food, shelter, and medical treatment. And note that the luxurious 20 rupees a day is for city dwellers; rural people have to spend less than 15 rupees a day in order to be below the poverty line.
The absurdity of such a low poverty line is astounding. Even the World Bank, which does not usually comment on national poverty lines, feels that India’s is too low and was hoping for a more realistic peg at $1.17 a day. Many concerned individuals have called India’s poverty line the “starvation line.” In fact, it is tending more toward the flat-line on a cardiac monitor.
The Multidimensional Poverty Index (developed by the Oxford Poverty & Human Development Initiative) puts the number of poverty-stricken Indians at 645 million. A recent report by the Asian Development Bank says rising food prices will push a further 30 million Indians below the poverty line of $1.25 a day. According to the National Family Health Survey (2006) by the Government of India, the child malnutrition rate is 46%, which human rights lawyer Colin Gonzalves says translates into a horrific 2,500 child deaths every day.
Are the members of the Planning Commission living in India in 2011? Why this total disconnect with reality?
Now I know some will argue and say: “Hey, stop picking on the Government of India! Can’t you see they’re trying to do their best … for themselves, that is? So what if they spend money on seemingly unimportant things (like the Commonwealth Games, unnecessary signs, and personal security guards) and remain impassive while some of their colleagues are filling their Swiss bank accounts and lining their own pockets with our tax dollars? Besides, the state governments are at fault, too. And I earn way more than 578 rupees a month anyways – in fact, I spend almost that much on a cup of coffee whenever I stop in at 360 at the Oberoi. So what do I care about what or where the poverty line is or who’s under it? Let them eat cake.”

I think I’ve heard those famous last words somewhere else before.
But a second look at this whole issue got me doing a re-think: If we can have a floating exchange rate and a floating gold price, why not a floating national poverty line? It could actually be a big advantage in lowering our poverty rates.
While having the international poverty line at $1.25 a day may show India as having some 600 million people below it, simply moving the national poverty line to 43 cents a day reduces those below the poverty line to about 440 million. In fact, if the Planning Commission revises the poverty line to 20 cents a day, they can reduce poverty yet again. Of course, they could drop the national poverty line to 1 cent a day and thereby eradicate poverty in India altogether.
Learning from the wisdom of the government, I’ve decided to adopt similar measures for a more personal problem. I’ll be turning 50 next month … but that sounds rather old. So instead of accepting that reality and taking practical steps – like putting aside funds for later years or taking better care of my health – I’m going to pretend I’m living on Mars and then, using the Martian measurement of time to calculate my age, I can say I’m just a sprightly 26 years. Of course, I may die before I’m 40, but at least I can live and die under a happy illusion.
http://blogs.wsj.com/indiarealtime/2011/05/17/india-journal-playing-with-poverty-statistics/

POVERTY: Measuring poverty and gender disparity

March 14, 2011 Dr Scott Wisor is a Research Fellow at the Centre for Applied Philosophy and Public Ethics at Australian National University and a Research Associate with the Development Policy Centre.


Poverty measurement is important. It is used to advocate for scarce resources, to allocate those resources, to determine access to entitlement programs, to evaluate projects, programs, and institutional designs, to provide the basis for anti-poverty analysis, and to resolve key debates.
According to World Bank statistics, between 1990 and 2005, global poverty fell from 42% to 25%, or from 1.8 billion to 1.4 billion people. The World Bank’s International Poverty Line is currently set at US$1.25 2005 PPP. That is, the International Poverty Line is supposed to reflect the purchasing power in local currency that $1.25 had in the United States in 2005.
According to the United Nations Food and Agricultural Organization statistics, between 1990 and 2007, hunger fell from 16% to 13%, although the number of hungry people actually increased as an absolute number from 843 million to 848 million. But can it be possible that the proportion of poor people has nearly halved while the proportion of undernourished individuals has barely changed at all?
Upon further reflection, the method for calculating and updating the International Poverty Line (IPL) is flawed. The IPL is based (in most cases) on household consumption-expenditure surveys, which track the value of goods consumed by a household, recording the actual prices when goods have been purchased and imputing prices when they have not (such as when food is grown at home, or when education is publicly provided, or health services are provided by an NGO). Once the total value of the goods consumed by the household is recorded, that figure must be converted to US dollars and the base year of 2005. This conversion should take account of purchasing power—ideally the poverty line in any given local currency and year should reflect the same command over resources as the poverty line in some different currency and year.
Each of the steps necessary for calculating the IPL is subject to critical scrutiny. First, the method of converting between currencies and then within currencies to a base year relies on consumer price indices and purchasing power conversions that are sensitive to the prices of the full range of goods consumed in an economy, rather than the specific bundle of goods that is predominantly consumed by poor people. Therefore, if the price of big screen televisions goes down but the price of rice goes up, both will affect the calculation of the local poverty line, even though one piece of information is irrelevant for assessing the purchasing power of the poor.
More fundamentally, the IPL is not rooted in any conception of human needs or capabilities which an individual is supposed to be able to achieve at a given level of consumption. It is simply intended to be an average of the national poverty lines of a representative set of poor countries. But merely averaging national lines is insufficient justification for why some individuals should be characterized as extremely poor and others should not be.
The IPL arguably excludes important dimensions of deprivation that are relevant for assessing deprivation. For example, education, health care, sanitation, and adequate shelter are not well captured by exercises imputing value for their consumption. In many cases, some dimensions of deprivation, such as freedom from violence and social capital, cannot plausibly be imputed values.
Importantly, by taking the household as the unit of analysis, the IPL obscures the intra-household distribution of deprivation. There have frequently been claims that women represent a disproportionate percentage of the poor, but absent morally plausible, gender sensitive conceptions of poverty and corresponding data collection that allow for the assessment of deprivation at an individual level, which takes account of the multiple dimensions of poverty, it simply is not possible to substantiate claims about the global feminization of poverty.
Existing indices of gender equity attempt to reveal gender disparities, but use achievements across the whole population of a country, rather than focusing on those deprivations most relevant, and revealing, for the worst off. All existing indices of gender equity fail to reflect when multiple deprivations are faced by a single individual.
Given the shortcomings of existing measures of poverty and gender equity, an interdisciplinary team of academics and development practitioners has joined together at the Australian National University to solicit the views of poor men and women regarding how poverty is best conceived and measured, with a particular focus on the gendered dimensions of deprivation. Rather than starting with a particular conception of poverty developed by a few analysts, we seek to engage poor men and women to discuss the key issues of poverty measurement.
In the first two phases of fieldwork, we will work with individuals in 18 poor communities of various ages and social locations to examine poverty, how individuals conceive of it, how they understand it to be gendered, and what recommendations they have for measurement. We seek to develop a new measure of deprivation that is capable of revealing the multiple dimensions of deprivation at the individual level, is gender-sensitive, and can be used for interpersonal comparison across context and over time, and then test this measure in the third phase of fieldwork.
We have recently completed the first phase of fieldwork in Fiji, Indonesia, Malawi, Mozambique, and the Philippines (and it is about to get underway in Angola). Key researchers from 5 of the 6 fieldwork countries will be in Canberra to share research findings, engage in group analysis, and begin to plan the second phase of the research project.
We envision this project as one part of a larger process of public reason to help develop new systems of poverty measurement that are, among other things, truly gender-sensitive. We invite you to be a part of this process. On 21 March, lead researchers from all five completed fieldwork countries and project team members will join for a public conference on measuring poverty and gender disparity. More information on the program is available here. We invite you to attend, in collaboration with the Gender Institute and the Development Policy Centre, to discuss key issues in the measurement of poverty and gender disparity, and to follow our future work at www.genderpovertymeasure.org.
http://devpolicy.org/gender-measures-poverty/