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UPA scores with ‘poor economics’

Although mired in controversy over their accuracy and methodology used to arrive at the declared figures, the shrinking of absolute poverty is, of course, beyond the reasonable doubt.

As the Planning Commission report suggests, the number of people surviving below the poverty line (BPL) has gone down from 40.71 crore in 2004-05 to 26.93 crore in 2011-12, a substantial reduction, although even with the new estimate, every eighth person living in urban areas is below the poverty line, while one in five rural residents could be described as poor.

The report, and the resultant sharp drop, was attributed to the high growth rate until early stages of 2012, before the current economic slump combined with the rupee down slide and high inflation brought the growth rate down. However, while the UPA would like to parade the poverty reduction to its flagship schemes such MNREGA, and now the Food Security ordinance, debates are raging whether there have been substantial upward shift in statistics because of the government sponsored measures or as a result of the sheer force of the growth curve that had been achieved in the previous years.

While it is a commendable feat, if actually achieved, of course, to bring out such big chunk of the population from poverty, the basis for obtaining the figures should also be discussed before reaching a conclusion. In any case, the Planning Commission’s declaration that anyone spending more than Rs 33.33 per day in the urban areas and Rs 27.20 in rural regions should be considered above the poverty line is questionable, since the global standards keep the spending threshold at $2 or Rs 120 a day.

Notwithstanding the controversial Tendulkar method, poverty estimates are bound to bring economists to the wrestling ring, particularly in the light of the war over subsidies to the haves and have-nots, ranging from cooking gas, fuel, gold or fertilisers to the well-off to food grains to the poorer sections. In addition, the Commission’s report also comes in advance of the C Rangarajan committee statement, which will be available only by early next year.

It would be shameful, to say the least, if it is revealed that the latest figures are just a face-saving exercise by the UPA government, which is buried under a terrible track record, including poverty of governance and slowing growth rate. Nevertheless, the fact that there has been some reduction in poverty should be welcomed by all, even though the rate of decline might not please all and sundry. Moreover, it would also bring into question the contending models of development, such as Bihar’s and Gujarat’s, which have been put forward as opposite ends of the growth story.       

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