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.