Tuesday, August 31, 2010

BPL reconciliation statement

In my earlier post, I spoke about how the Indian government identifies the BPL families who are then showered with all the benefits that will put many socialist countries to shame.
The BPL list is prepared by two departments. The Planning Commission estimates BPL numbers using the NSSO surveys. Here the criteria is only calorie intake. If a person earns enough money to consume 2400 calories of food in rural areas, he is not poor.This criteria will always produce a smaller BPL figure.
The Ministry of Rural Development has used a 13point list which includes sanitation, education, type of house to identify the poor households. Since one is using many variables and not just calorie intake to identify poverty, this figure will be higher than the one estimated by the Planning Commission.
Here is the irony. The figures put out by Ministry of Rural Development must not be higher than the one put out by the Planning Commission! This is absolutely ludicrous. So the whole exercise has been reduced to what my Professor says "BPL reconciliation process"
No wonder the eminent lawyer Nani Palkhiwala called Delhi a "thought free zone"

Wednesday, August 25, 2010

Living in the real world

I came off facebook three weeks back. And it feels good. The effects of not being on a social network are visible. I blog more, sleep more and read more.And I also spend more time out on the campus grounds playing cricket and volleyball.
I do not miss facebook.It was making me too "impersonal".
I also use less of my laptop. I open it up only for checking mails for using MS Office.
It sure is a nice feeling.

Wednesday, August 18, 2010


To Love someone is to invite that person to live and grow with you.

One of the many pearls of wisdom shared by Prof. K.V. Raju in ethics class.
My take? Most of us forget the "growth" part.

Monday, August 16, 2010

Where are the Poor?

A pretty useless and a stupid question to ask if it was pertaining to India. One just needs to step out of the house and one can see large swathes of poverty. Large sections of the Indian population are deprived of roti, kapda and makan.And if one were to believe the Multi-Dimensional Poverty Index, which will be featured in the upcoming UN Human Development Report, 55% of Indians are poor. Now this amounts to more than 55 crore people who are not able to live a decent life. What is more shameful is the fact that eight Indian states have more poor people than 26 poor African Nations.
The percentage of poor people in India changes according to yardsticks used to measure the poor people. So while MPI puts the figure at 55%, the Planning Commission puts it at 27%, and the Suresh Tendulkar Committee puts it at 37%. In fact the Labour Ministry had come out with a report which stated that 70% of working population in India earns less than INR 20 per day.
Some weeks back, Prof.Anirudh Krishna of Duke University gave a wonderful presentation on the work he had done on poverty in India. Rather then look at the poverty numbers as a stock variable, he looked at them as flow variables for his research. He was interested in finding out who are the poor people and how did they become poor, how many came out of poverty, how many went into poverty and the ones who came out of poverty, how far did they go from the poverty line as defined by various agencies. He resorted to a longitudinal study spread across several countries and years. Some of his work related to this is available here
IRMA's very own Prof. Shylendra also presented a seminar on the various issues surrounding the identification of poor.
Though knowing how many are poor and therefore helping them out is a larger social goal, the numbers of poor people and the variations across the board as seen above, have large implications while designing policies.
Most of our social welfare schemes have a "target based approach". The State and its agencies "target" the poor and give them benefits. These benefits are significant, ranging from free food, subsidized credit, free house, etc. Thus thousands of crores of rupees are allocated to schemes which are "target based". The logic behind targeting is simple. India is a "poor" country with limited resources. So the benefits should accrue to the poorest of the poor under welfare schemes.
Targeting has its own host of problems, which Guy Standing and Renana Jhabwala have pointed out in an EPW article last month. Ill just focus on the "identifying the poor" issues rather than discuss the merits and demerits of targeting.
So, since thousands of crores of public money is targeted at the poor, one should have a reliable list of poor people in India. However this is not the case. Every list called the "BPL (Below Poverty Line) list" suffers from Type 1 and Type 2 errors. In other words,exclusion of poor and problems of inclusion of non-poor have been a constant feature of BPL lists.
In India, the National Sample Survey Organisation does its own sample survey and comes out with a list of poor people.It is used by the Planning Commission. This list is based on a nutrient-based income poverty.
The Ministry of Rural Development has its own quinquennial surveys, the first of which was held in 1992 and was completely based on an income approach. In 1997 the survey took a expenditure approach in determining the BPL families. Both of these surveys had enormous type 1 and type 2 errors.
The 2002-03 survey was more elaborate in the sense that it prepared the list based on 13 items ranging from income to pairs of clothing, land holding, literacy, etc. SO in one sense, it was "multi-dimensional".However it had its own issues and was considered to be too complex. One can refer to Harsh Mander and Santosh Mehrotra's article in EPW (may 9 2009) which provides a good account of the 2002-03 survey methodology.
So what we have here is a complex system, set up to alleviate poverty.And the problems starts with this "target" approach which is resorted to by the policymakers.
This problem continues with the identifying the poor part of this approach as elucidated above.
In fact Indira Hirway, has rightly stated that targeting is not a statistical exercise, but is a major political activity. All these surveys have been designed without understanding the ground reality. Caste Structures, political affiliations, class structures are major issues which cannot be eliminated. The surveys designed so far ignore these realities and hence we have a list which is flawed and is denying crores of poor people entitlements which any "free country" would give its citizens in the 64th year of Independence.
My Professor at IRMA suggests that universalism is the answer. But for that I will have to wait for a week when that issue is taken up in my "Rural Development Intervention" class.

Tuesday, August 10, 2010

An evening with prominent IRMA alumni

IRMA is in the midst of a "revisioning" exercise. So prominent personalities were called in for their views and opinion regarding the same. Mr.Vivekanandan of SIFFS and Mr.Sivakumar, CEO of ITC-ABD were the alumni who were part of this exercise.
Prof.Abhijeet Sen, member of the Planning Commission was also invited to this excerise.Some of the guys here were also talking about Vijay Mahajan being there.
The biggest name was Rahul Gandhi who quietly came and left without much fanfare.
Since two of the most famous alumni were present on campus, it was a wonderful opportunity to interact with them.
The more famous of the two is of course Mr.Sivakumar. He is the man behind ITC's e-choupal, a much celebrated business model of procuring agricultural produce (mainly soyabean) directly from farmers through choupals set up in villages.
This business model found itself as a case study in C.K.Prahalad's famous book "Fortune at the bottom of the pyramid". Mr.Sivakumar himself felt that "Fortune for the bottom of the pyramid" is more important than "fortune at the bottom of the pyramid".
Both of them spoke about life after IRMA, strengths and weaknesses of IRMAns and choices we would have to make when we step out of this institution. Mr.Sivakumar spoke about having a "larger purpose" in life which is essential in achieving success in life. This large purpose must go beyond salary, perks, and the like.
Mr.Vivekanadan too spoke about the changed environment in the last 30 years since he passed out of IRMA. He also spoke at length about his involvement with fishermen community in Kutch and their movement against the Adani group which was building the Mundhra port that had affected the fishermens' livelihoods.
Overall it was a nice interaction with some of the earliest IRMAns. I think such interaction with alumni should be made a regular feature as it only enriches one's understanding on the challenges faced by rural managers in the field

Friday, August 6, 2010


I wrote this on the 24th of June 2010 . It is part of my collection of posts regarding my OTS in the Vidharbha region of Maharashtra
I arrived in Wardha yesterday. It is an hour’s drive from Yeotmal. I am staying at a hotel called Harisons which is diagonally opposite the ST stand. Not a great hotel, but then it’s the best in this district. Unfortunately the wholesale market is also located opposite the ST stand which prevented me from exploring the town.
However six kilometers from Wardha ST Stand is Sewagram, where Mahatma Gandhi stayed for a long time. One can take a rickshaw from the ST stand which will cost Rs 10 per person. Be ready to share the rickshaw with 5 other passengers. Sewagram has an exhibition centre which houses a neat canteen and a souvenir shop which sells Khadi and organic products. The exhibition centre houses the stand which was used to transport Gandhi’s ashes. Through photos and miniature models, it traces the journey of a man who went from being Mohan to Mahatma.
The centre also has a book shop. Three books which I bought were Panchayati Raj by Mahatma Gandhi, Public Finance and our Poverty and Economy of Permanence both authored by J C Kumarappa. He was Chartered Accountant and an Economist who spent latter part of his life as a disciple of Gandhi. I also bought a kurta and a shirt from the shop.
The place which houses Bapu kuti or Gandhi’s house has been well maintained. It was a hamlet which housed Gandhi and his followers. It was self sufficient. It had cattle, and farming was also undertaken. Even today farming is undertaken on the one hundred acre land. All farming is organic.
The land belonged to the industrialist and eminent Gandhian Jamnalal Bajaj. Gandhi referred to him as his “fifth” son. In fact there is a large statue of Jamnalal Bajaj outside the ST stand. I was surprised to see this as we are not a country which admires industrialists, traders and businessmen.
After Mani Bhavan which was the Mahatma’s abode in Mumbai, this is the second house of the great man that I have been to. Staying so close to Ahmedabad, I guess Sabarmati Ashram would be the third house of the great man which I will visit in the coming year.
I now head back to Amravati. Probably a trip to Nagpur would be on the cards next week. Lets see what the largest town of Vidharbha has in store for me.

IndiaPay-An alternative in the making for Visa and Mastercard

I have always been a fan of "Made in India" tags on products, processes and services that aim to compete with global players. I think the discourse on globalisation restricts India's role as a "market". A market where you can sell, with relative ease, shoddy products and services. Given the pent up demand among the 250 million odd middle class, one can literally get away by selling anything.
Hence when I read about a RBI backed payment processing platform called IndiaPay, it made me happy. Visa and Mastercard are payment processing platforms. As more and more Indians start using plastic money, the payment processing platforms will stand to make a lot of money.Today, nine out of ten card transactions are undertaken by Visa and Mastercard. A new player in the space may just drive down costs.
Also as more and more farmers are covered under the Kisan Credit Card,IndiaPay assumes that much more importance.
While Malaysia and China developed their own payment processing platforms in 1997 and 2002 respectively, India Pay will take another two years to hit the markets.