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Re-conceptualising poverty

The current thinking in the national Planning Commission to redefine poverty to include attributes that reflect deprivation has the potential to facilitate effective state intervention to reach the elusive goal of poverty eradication. For decades, Indian estimates ignored the multi-dimensional nature of poverty, held a bias towards calorific-computation, and restricted the measure to reflect economic deprivation at a very basic level. It was not just that this presented a narrow picture of the nation’s poor. It also excluded important components of non-food expenditure. In a 2003 paper, the United Nations Development Programme forcefully argued against the nutrition-based approach. The proposed method, according to reports, seeks to measure poverty in terms of access to basic facilities including education, health, and infrastructure. Studies that simulated current official poverty figures to include non-food expenditure, education, and healthcare, to name two, clearly indicate that poverty would be more severe if personal spending on these necessities is included.

Re-conceptualising poverty is particularly important for contemporary India, which, after a decade of economic reforms is still home to the world’s largest number of poor. The expert committee working on computing a new poverty measure has new methodological challenges to overcome before it can effectively capture the multi-dimensional nature of poverty. For the proposed measure to have relevance, it will first have to revisit a major conceptual issue: redefining the “poor” and the “non-poor,” factoring in qualitative attributes to reflect deprivation. This material deprivation is also a result of state failure in key areas, especially health and education. When the poverty line was first defined, it excluded non-food expenditure on the assumption that the state would provide services such as education and health services. The latest Economic Survey’s admission that “India has one of the highest out of pocket household expenditure for health services,” is a telling reflection on the quality and availability of public services. The value of the proposed methodological switchover for poverty eradication will depend on how effectively the new approach captures qualitative attributes of vulnerability. If it fails to do so, India’s fight against poverty will continue to remain incomplete, reducing the proposed measure to another statistical parameter.

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