For sheer chutzpah, it is hard to beat a crorepati like Mulayam Singh Yadav, sitting in an air-conditioned Parliament, fulminating that people in air-conditioned rooms don’t understand that you cannot live – let alone have a snack – on Rs 32 per day (which was the government’s definition last year of poverty-level income in a city; in villages it was Rs 26). Not for the first time, voluble critics have condemned the poverty line as divorced from reality, and the government has said it will be redefined. Redefinition is a good thing, the danger is it won’t go far enough — and more on that in a jiffy. First, we have to deal with the bogus outrage that greets anyone who says that poverty is coming down.
A family of five in a village would have a poverty line income of Rs 130 (26 x 5). Now look at what state governments prescribe as minimum wages. The minimum wage for a beedi worker in Kerala (ruled till last year by Communists, who are prominent critics of the poverty line) is Rs 128.89. While Sushma Swaraj of the Bharatiya Janata Party said in Parliament that no one could agree with the Planning Commission’s poverty numbers, her party’s Madhya Pradesh government has prescribed a minimum wage in agriculture of Rs 119; in Gujarat (run by the redoubtable Narendra Modi), it is Rs 100.
It is Rs 100 in Mulayam Singh’s Uttar Pradesh too. And while Sharad Yadav of the Janata Dal (United) said the deputy chairman of the Planning Commission should resign for touting an absurdly low poverty line, his party’s government in Bihar prescribes a minimum agricultural wage of Rs 138. Remember that half of all households have a single bread-earner, so the daily wage is often the family income; and since no one works every day of the year, the “average daily” income is much lower than the minimum wage.
As an aside, Mulayam Singh also said 65 per cent of the people do not have electricity or potable water (the 2011 Census says they do). So who in our air-conditioned Parliament is out of touch with reality? Also, Karnataka prescribes the minimum salary for a manager in aerated water manufacturing: the precise sum is Rs 4,669. This is equivalent to Rs 157 per day, so a city-based manager supporting a family of five would find that his income is lower than the poverty line (Rs 160 for a family of five). Finally, the prescribed wage under the rural employment guarantee programme is Rs 130 or less in all but two or three states.
So, however impossible it may sound to our politicians, many millions do live on less than Rs 32 per day; what remains to be established is how many million. The National Sample Survey has come out with a number, which is lower than its previous numbers. Is anyone in a position to say it is wrong?
As for redefining poverty, it is overdue. But first, stop defining it as income or expenditure per individual, and switch to household data. While three-quarters of households have four or more people, single- and two-member households need more income per capita, so you need more than one number for poverty-level income — as the United States has recognised. Then, switch from absolute poverty (expressed in rupees) to a relative definition. Notions about poverty change as incomes rise, and a relative definition automatically updates for improvements in general living standards without the need for special committees. In Europe, the poverty line is 60 per cent of the median family income. The US figure is equivalent to 40 per cent of the median. If India adopts the more generous European yardstick, its poverty line for a five-member family would be about Rs 6,000 per month, or Rs 200 per day for five people. Any takers?
