For decades the Planning Commission has been following a rather limited definition of poverty based on a nutritional norm. A poverty line that only takes into account calorie consumption and does not include other basic needs is unacceptable. There is clearly an imperative need to redefine this poverty line in tune with basic needs such as proper nutrition, drinking water availability, shelter, hygiene, clothing and education.
������������
Redefining Poverty
A New Poverty Line for a New India
For decades the Planning Commission has been following a rather limited definition of poverty based on a nutritional norm. A poverty line that only takes into account calorie consumption and does not include other basic needs is unacceptable. There is clearly an imperative need to redefine this poverty line in tune with basic needs such as proper nutrition, drinking water availability, shelter, hygiene,
clothing and education.
MOHAN GURUSWAMY, RONALD JOSEPH ABRAHAM
I have learnt to seek my happiness by limiting my desires rather than in attempting to satisfy them.
– John Stuart Mill
IIIII
Defining Away the PoorDefining Away the PoorDefining Away the PoorDefining Away the PoorDefining Away the Poor
W
hile defining poverty in India, it seems our planners have taken J S Mill quite literally because for decades the Planning Commission of India has followed a rather limited definition of poverty. The commission’s poverty threshold is based on a nutritional norm of 2,400 and 2,100 calories in rural and urban India, respectively [GoI 1979]. Thus if people living in rural (urban) India can afford to consume on average at least 2,400 (2,100) calories of food per person per day, they are above the poverty line.
The Planning Commission estimated the total expenditure – both food and nonfood expenditure – of the group that was just above this caloric norm; these expenditure levels for rural and urban areas became the poverty lines [Sen 2005]. These lines first estimated three decades back, are adjusted periodically to account for inflation of prices. In 1973 prices, the poverty lines for rural and urban areas stood at Rs 49 and Rs 57 per person per month. About three-fourths of this monthly expenditure was used up in buying food items, leaving little for other needs [GoI 1979]. As of 1999-2000, the poverty lines declared by the Planning Commission were Rs 327 and Rs 454 for rural and urban areas, respectively [Saxena 2001]. Currently, these figures stand at approximately Rs 368 and Rs 559 per person per month for rural and urban areas.1
A poverty line such as this one that largely accounts for only calories and does not include the other basic needs of life is unacceptable. While defining poverty, all basic and fundamental human needs such as proper nutrition (and not just nutrition based on calories), drinking water, shelter, hygiene, clothing, education, etc, need to be accounted for. In fact, it would not be an exaggeration to call the current poverty line a “starvation line” because that is exactly what it is. Considering that people below this official line cannot even afford the requisite amount of foodgrains, they are more than just poor; they are starving.
There is clearly an imperative need to redefine this poverty line in tune with basic needs. This is also not the first time that such a need has been highlighted.
IIIIIIIIII
The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:
Three Major ProblemsThree Major ProblemsThree Major ProblemsThree Major ProblemsThree Major Problems
22222
(a) Present poverty class does not even meet the caloric norm: We have argued earlier that the definition of poverty based just on the caloric norm is unacceptable. Now, consider this. The average person just above the official poverty line from rural India falls short of the caloric norm by about 22 per cent. Similarly, a person just above the poverty line in urban India falls short of the norm by about 9 per cent (Table 1). Therefore, the present poverty line, which was only supposed to ensure a certain calorie intake, fails even on that single front.
The present official poverty line is based on the norm that the average person in rural India should be able to consume 2,400 calories and the average person in urban India should be able to consume 2,100 calories. In 1979, when the present poverty line was formed, this was the case, ie, the average person above the poverty line met the caloric norm. However, currently (1999-2000), those people who are just above the official poverty line do not meet this norm.3 This can clearly be seen in Table 1 where the group just above the poverty line (called the Poverty Line Group or PLG) consumes an average of 1,868 calories in rural areas and 1,912 calories in urban areas.
(b) Looking at only calories is not enough: The current caloric standard is also an insufficient nutritional norm; there are two reasons for this. Firstly, the caloric standard set by the Planning Commission – 2,400 (2,100) calories in rural (urban) areas – is an under-stipulation. The Planning Commission reached these figures after looking at the caloric need of the whole population based on their age, sex and occupations. This ensures a conveniently low caloric standard because it includes the well off members of society who do not physically exert themselves, and therefore, do not need as many calories as someone who is doing manual labour. Instead, while stipulating a caloric standard for the poor in India, it should be taken for granted that the occupational activity of the adults is manual labour and thus they are undertaking heavy activity. Taking this into consideration and the age and gender of the population, the prescribed caloric standard should be 2,700 calories per day. This is 300 (600) calories more than the commission’s recommendation for those in rural (urban) areas.4
Secondly and more importantly, there exists a need to go beyond a simple caloric standard, as the body also needs proteins, fat, minerals, iron and vitamins [ICMR 2004]. Below is an excerpt from ICMR’s book on dietary guidelines for Indians (2004).
Man needs a wide range of nutrients to lead a healthy and active life and these are derived through the diet he consumes daily. The components of his diets must be chosen judiciously to provide all the nutrients he needs in adequate amounts and in proper proportions…The body needs energy [calories are the primary source of this] for maintaining body temperature, metabolic activity, supporting growth and physical work…Proteins provide amino acids for the synthesis of body…In the adult, dietary protein is essential to synthesise new proteins…Fat is a concentrated source of energy … and also helps in the absorption of beta-carotene and other fat-soluble vitamins...While a minimum amount of fat has to be present in the diet, excess of fat in the diet is considered harmful...Minerals that are important in human nutrition are calcium, phosphorous and magnesium and the electrolytes, sodium and potassium… [Iron is important because] iron deficiency anaemia is widespread in our country, the prevalence varying from 45 per cent in male adults to 70 per cent or more in women or children…Vitamins are accessory food factors, which carry out diverse functions in the body.
Nutrition deficiency is also a leading cause for disease. According to the UNICEF (2005), “malnutrition limits development and the capacity to learn. It also costs lives: about 50 per cent of all childhood deaths are attributed to malnutrition”. Lack of Vitamin C leads to scurvy, a disorder that affects our bones. Vitamin B1 deficiency leads to mental confusion, muscle weakness and heart disorder. Osteoporosis, or the tendency to lose bone mass, is linked with lack of calcium in our diet. A zinc deficit in children leads to growth retardation.5 Therefore, it is amply clear that a nutritious diet is a fundamental need of the human body; this must not be ignored when formulating a poverty line.
Out of all the nutritional requirements mentioned above, the present poverty line only fulfils the minimum protein requirement of 50 gm per day. This is mainly because 75 per cent of total protein is derived from cereals.6 However, to ensure adequate consumption of all the essential nutrients, a commodity basket should be formulated that includes a minimum diet of cereals, pulses, oils, vegetables, fruits, etc. Thereafter, the cost of this diet should be calculated and included when constructing the poverty line. This will ensure that if someone is above this renewed poverty line, he or she will have the capability to consume a nutritious diet. This has been elaborated in the next section.
(c) No norms for non-food basic needs: The title of the 1974 Hindi movie – Roti, Kapda aur Makan (Bread, Clothing and Shelter) – captures very well the notion that man does not live by bread alone. The present poverty line not only ignores important nutritional needs, but also the other basic needs of life: shelter, clothing, healthcare, sanitation, drinking water and equal opportunity in education.
In 1979, when the present poverty line was formed, the expenditure on non-food items of the group of people who consumed over 2,400 (2,100) calories in rural (urban) areas was calculated. In addition to the total expenditure on calories, this non-food expenditure was also included into the poverty line. However, such a method is akin to suggesting that whatever the poor spend on non-food items is “enough”.
Instead, one needs to analyse what is consumed through non-food expenditure and verify whether it meets the basic needs of a human being. For example, as per the latest national sample survey on consumer expenditure, those who are just above the poverty line in rural India spend only around Rs 8 per month on medical care, a grossly insufficient amount. This example clearly brings out the danger of referencing consumer behaviour as the actual basic needs standard. It is not as if the Planning Commission has not taken note of the fault in its methodology [GoI 1993]:
The [Planning Commission Expert] Group recognises the desirability of defining the normative standard for non-food consumption and its constituents without reference to actual behaviour, but until this is done, the existing basis seems to be the most practical and reasonable.
Despite this apparent “recognition” by the Commission, no such norms exist in reality. Considering that most of these norms can be derived scientifically, there seems to be no explanation for why this has not taken place. The only plausible explanation can be that since raising the poverty bar higher will only compound the task of our policy-makers and economic planners, it remains at a ridiculously low level to enable claims of better achievement and to avoid deployment of resources to the areas and people who deserve them more.
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Towards a More RealisticTowards a More RealisticTowards a More RealisticTowards a More RealisticTowards a More Realistic
Definition of PovertyDefinition of PovertyDefinition of PovertyDefinition of PovertyDefinition of Poverty
This section attempts to define poverty in India in a manner that visualises it in more human and humane terms. Quite clearly a more reasonable poverty line ought to be based on the cost of all basic needs. Thus this section details the cost of nutrition, healthcare, clothing, etc. In addition, some needs that cannot be quantified in money terms, such as access to water, education, etc, are also identified and included.
(a) Nutritional norms and cost: Even in this day and age, around one in four Indians are malnourished. The consequences of such a plight are devastating as nutrition
Table 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake of
Calories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and Above
the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000)
Group Per Person Per Day Intake of Calories (kcal)
RuralRuralRuralRuralRural
Below poverty line group 1614 Poverty line group (PLG) 1868 Above poverty line group 2386
UrbanUrbanUrbanUrbanUrban
Below poverty line group 1627 Poverty line group (PLG) 1912 Above poverty line group 2375
Source: Calculated from Government of India (2001c): NSS Report No 471: Nutritional Intake in India, 1999-2000, National Sample Survey Organisation, New Delhi.
Table 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and Adults
Food groups
Infants
Years
6-12 1-3 Months
4-6
7-9
10-12
13-18
Adult (Heavy Activity)7
Girls
Boys
Girls
Boys
Woman Man
Cereals and millets (g)
45
120
210
270
270
330
300
420
480
690
Pulses (g)
15
30
45
60
60
60
60
60
90
90
Toned milk (ml) Roots and tubers (g)
500 50
500 50
500 100
500 100
500 100
500 100
500 100
500 200
300 200
300 200
Green leafy vegetables (g)
25
50
50
100
100
100
100
100
100
100
Other vegetables (g) Fruits (g)
25 100
50 100
50 100
100 100
100 100
100 100
100 100
100 100
100 100
100 100
Sugar (g)
25
25
30
30
30
35
30
35
45
55
Fats/oils (visible) (g)
10
20
25
25
25
25
25
25
40
55
Source: Indian Council of Medical Research (2003): Dietary Guidelines for Indians – A Manual, National Institute of Nutrition, Hyderabad.
is the most important need of a human being after water. Presently 47 per cent of Indian children below the age of five are underweight for their age [UNDP 2005]. The UNICEF reports that one in every three malnourished children in the world is in India.
However, it is not as if the government is unaware of the importance of balanced nutrition because the National Institute of Nutrition (NIN) under the aegis of the ICMR itself recommends what it considers is a nutritious diet for healthy living. The NIN has also published a balanced diet for Indians, reproduced in Table 2. In fact, the apathy of the government is quite evident from the fact that despite having sponsored detailed studies on nutrition in India, it still adopts a norm that only sees poverty in terms of calories.
Given in Table 3 are the prices of these foodstuffs with information on how they have been computed.
With the recommended diet given in Table 2 and the prices in Table 3, one can calculate the cost of this diet. This is shown in Table 4.
The last row in Table 4 provides the ideal monthly expenditure on food that enables one to have a complete nutritious diet. Using the age-sex distribution information of the population, one can calculate that the per capita expenditure on food that provides for the recommended balanced diet for the average Indian person should be around Rs 573 per month. Therefore, for a typical family of five, the total monthly expenditure on just food should be about Rs 2,900. If the two adult members of a family work for 25 days a month on the officially prescribed minimum wage of Rs 60 each,8 they would just about earn Rs 3,000 between them.
If such a family eats a nutritious diet as prescribed by the NIN, they will have a negligible amount of money for all the other essentials. One must also note that daily wage labourers account for over 80 per cent of our workforce of over 422 million [GoI 2001d]. The average number of working days available to agricultural labour has also decreased drastically over the last two decades: from 123 days in 1981 to 72 days in 2003 [Sivaraman 2006]. Two policy implications are very obvious. One is the immediate revision of minimum wages and the other is to greatly expand work opportunities for the least qualified and majority of our workforce.
(b) The cost of meeting basic health needs9: India is a signatory to the Alma Ata
Declaration during the International Conference on Primary Health Care (ICPHC) in 1978 which states, “A main social target of governments … should be the attainment by all peoples of the world by the year 2000 of a level of health that will permit them to lead a socially and economically productive life”. The declaration further identifies primary healthcare as “the key to attaining this target”. According to the declaration, primary healthcare “addresses the main health problems in the community, providing promotive (sic), preventive, curative and rehabilitative services accordingly”. Furthermore, the Indian wing of this health movement, championed by the National Human Rights Commission, states that primary healthcare should be provided free of cost.
However, India is a long way away from providing free healthcare to all. According to the present health minister’s public “message”, only 20 per cent of Indians are covered by public healthcare and the rest take recourse to the private sector [Ramadoss 2004]. Evidently even many Indians below the official poverty line seek medical care from the private sector. Financing ones own healthcare is clearly a burden for the poor in India. Even where the services are available, medicines and drugs are often not available. In addition, implicit and indirect costs of accessing healthcare are often not accounted for; such as loss of wages, cost of travel, etc (personal communications with Iftekhar Chisti on December 30, 2005 and Rajiv Ahuja on December 29, 2005). These factors make it imperative to calculate the average minimum per capita expenditure on healthcare and include it in the poverty line.
Average monthly per capita healthcare cost can be calculated by multiplying the probability of requiring medical care with the actual cost of such medical care.10 This is called the “expected value” of the
Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005
Food Product
Price
Remarks
(Rs/kg)
Rice
11.23
Result for 2005; average of south and east zone*
Wheat
8.71
Result for 2005; average of north and west zone*
Tur (arhar, pulses)
28.99
Result for 2005; all-India average
Mustard oil
52.98
Result for 2005; average of north and east zone.*
Sugar
19.2
Result for 2005; all-India average
Vegetables
7.83
Calculated using the weighted average of the rate at which urban
and rural India bought vegetables as given in GoI 2001b. The figure
is adjusted for inflation.
Fruits
16.59
Calculated using the weighted average of the rate at which urban
and rural India bought fruits as given in GoI 2001b. The figure is
adjusted for inflation.
Milk
15.00
Using the standard MRP for toned milk
Note: * The all-India average was not used for these regions because due to the unavailability of these products in certain parts of the country, their prices were unreasonably high, thereby distorting the all-India average.
Source: Government of India (2005a): Prices of Food Stuffs from Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution; Government of India (2001b): NSS Report No 461: Consumption of Some Important Commodities in India, 1999-2000, National Sample Survey Organisation, New Delhi; MRP of toned milk.
Table 4: Cost of DietTable 4: Cost of DietTable 4: Cost of DietTable 4: Cost of DietTable 4: Cost of Diet
(in Rs)
Food Groups
Infants
Years
6-12
1-3
4-6
7-9
10-12
13-18
Adult
Girls
Boys
Girls
Boys Woman
Man
Cereals
0.45
1.2
2.09
2.69
2.69
3.29
2.99
4.19
4.79
6.88
Pulses
0.44
0.87
1.31
1.74
1.74
1.74
1.74
1.74
2.61
2.61
Milk
7.5
7.5
7.5
7.5
7.5
7.5
7.5
7.5
4.5
4.5
Vegetables
0.78
1.17
1.57
2.35
2.35
2.35
2.35
3.13
3.13
3.13
Fruits
1.66
1.66
1.66
1.66
1.66
1.66
1.66
1.66
1.66
1.66
Sugar
0.48
0.48
0.58
0.58
0.58
0.67
0.58
0.67
0.864 1.056
Fats/oils (visible)
0.53
1.06
1.32
1.32
1.32
1.32
1.32
1.32
2.12
2.91
Total daily cost
11.84
13.94
16.03
17.84
17.84 18.53 18.14 20.21
19.67 22.75
Total monthly cost
360
424
487
543
543
563
552
615
598
692
Note: Cereals include an average of rice and wheat (Rs 9.97). Price of arhar is used for pulses. Mustard oil is used for calculations on visible fats/oils.
Source: Calculated using Tables 3 and 4.
healthcare expenditure. This is exactly the computation undertaken by actuaries while calculating premiums for health insurance. The “Universal Health Insurance Scheme” is one such scheme targeted at the lowincome group. As per this scheme, for a premium of Rs 365 per annum, an individual can get insured for all inpatient medical care up to a sum of Rs 30,000 [Ahuja 2004].11
Therefore, Rs 365 per annum or Rs 30 per month per capita is the “expected value” of health expenditure for the poor in India. Clearly even this is a small amount, but nonetheless at least this much should be ensured to every citizen of this country.
(c) Access to water: The minimum water consumption as per the World Health Organisation should be about 50 litres a day per person to cover consumption and hygiene needs [Howard 2003]. However, as per the latest National Family Health Survey of 1998-99, 37.7 per cent of households do not have access to safe water supply within 15 minutes of their home [IIPS 2000]. In a typical family of five, if two persons each fetch a traditional vessel full of water daily, they will be able to bring back at the most 40 litres of water between them. That is about eight litres of water or approximately eight mugs of water per person in a family of five. Therefore, at least one in three Indians does not get this basic daily water requirement. This is without any comment on the quality of water.
(d) Access to shelter and sanitation: It is only humane that every human being should have a secure shelter with at least basic amenities and comforts. If we were to define minimum housing standards that provide for the bare minimum, the following should be reasonable to expect: a housing unit with two bedrooms, a kitchen and a covered toilet; one electric bulb each in all the four rooms; one fan each in the two bedrooms; one tap each in the toilet and kitchen; one septic tank or connection to a sewage in the bathroom; reinforced cement concrete (RCC) roof;12 and brick or stone walls reinforced with cement.
While there does not exist information on the availability of housing with the above features specifically, information on the percentage of households living in ‘pucca’, ‘semi-pucca’ or ‘katcha’ houses is available in a nationwide survey on housing done in 2002 [GoI 2004b]. A pucca house is one which has a roof and walls made of pucca materials such as cement, concrete, oven burnt bricks, metals, etc. A katcha house is one with a roof and walls made of non-pucca materials such as bamboo, mud, grass, etc. A semi-pucca house is one, which has either a roof or the walls made of pucca materials, but not both.
For security and protection against the elements, a dwelling unit should at least be a pucca house, even though it may not reach the standards prescribed above. In rural and urban areas, 64 per cent and 23 per cent of the households, respectively do not have a pucca house (ibid). Thus, a weighted average of 49 per cent of all households do not have shelter that meets our minimum standards.
The condition of public sanitation can be seen all along our roads and railway tracks. Even the most basic living standard demands that a dwelling unit should have access to a latrine that is either connected to a sewage line or a septic tank. However, 89 per cent and 37 per cent of rural and urban India respectively or a weighted average of 69.5 per cent of Indians do not have access to such a latrine facility (ibid).
(e) Cost of energy: Presently about 57 per cent of Indian households do not have access to electricity.13 Even in households that have an electricity connection, the supply of electricity is extremely erratic [GoI 2003]. Clearly, if India is to be considered a developed country, each household should have an electricity connection and there should be enough electricity available for all at all times.
The basic house described above needs a few basic electrical fittings – four bulbs and two fans – that constitute the bare minimum need for electrical appliances. We assume that each ceiling fan is on for eight hours during the night and four hours during daytime, thus a total of 12 hours. We also take that the two bulbs are turned on for about four hours each in the evenings, mainly for reading or cooking purposes. With these minimal fittings and reasonable usage, the monthly cost on electricity comes to Rs 175 for a household (Table 5). Considering that there are 4.99
persons to a household in India, the per capita monthly expenditure on electricity comes to Rs 35.
Electricity is the most expensive and least preferred energy source for cooking. On the other hand, the widely used lowgrade fuels – such as wood, dung, hay, coal
– are a significant source of indoor airpollution as per a report by the Indian Council of Medical Research [Medappa 2001]. This report also states that there is growing evidence linking indoor air pollution and diseases such as respiratory diseases, tuberculosis, asthma, heart diseases, cataract, etc. However, as Table 6 shows, over 90 per cent of rural India uses these very low-grade fuels indoors! Though urban India performs relatively better, it too has a 30 per cent prevalence of harmful indoor fuels. Clearly such use of these disease-causing fuels should be minimised.
While LPG is the ideal cooking fuel, its set-up costs are high. It is mainly an urban middle class fuel (Table 6). Despite the fact that most people using LPG are not the ones needing financial support from the state, the government continues to subsidise it. Kerosene is a more affordable substitute and can be used more widely by the poor. Moreover, it is a reasonably clean fuel and can be recommended for use over polluting and harmful fuels like wood, dung, coal, etc [Hughes et al undated].
Table 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel Used
for Cooking in Indiafor Cooking in Indiafor Cooking in Indiafor Cooking in Indiafor Cooking in India
Source: International Institute of Population Sciences (IIPS) and ORC Macro (2000):
National Family Health Survey (NFHS-2), 1998-99, IIPS, Mumbai.
Table 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a Month
Appliance
Wattage (A)
Quantity (B)
Usage (Hours/Day)(C)
Units/Month (AxBxCx30)/1000
Cost (Rs 2.2 Per Unit)
Ceiling fan Light bulb Fixed charges Tax *
80 40
2 2
12 4
57.6 9.6
126.72 21.12 20.00 7.39
Total
67.2
175.23
Note: * Five Per cent tax on variable cost. Source: Rate list printed by BSES, power, information on electricity tariff rates.
However, as Table 7 shows, over the past few years, kerosene has received lesser budgetary support as compared to LPG. In 1993-94, the LPG subsidy was a third of the kerosene subsidy. However, in 200203, it is more than that of kerosene. It would seem that not only has the state been reducing its support towards LPG and kerosene consumption, it has been doing so at the cost of kerosene.
Presently kerosene is sold at a subsidised rate of around Rs 9 under the public distribution system (PDS). The quota ranges from around 10 to 12 litres per ration card per month.14 Thus, the consumption norm of kerosene for a typical family of five is around 2.2 litres per head per month. Assuming that such kerosene is available to all, the monthly per capita expenditure on kerosene comes to around Rs 20. Thus the total per capita monthly expenditure on cooking fuel (Rs 20) and electricity (Rs 35) should be around Rs 55.
(f) Clothing requirement: Clothing is the second part of ‘Roti, Kapda aur Makan’. It is also the most variably priced as clothing requirements vary considerably according to region, gender, age and culture. To overcome these problems to an extent, this paper suggests the minimum amount of cloth required and its cost for persons by age and gender although seasonal requirements are disregarded for the sake of simplicity (Table 8).
The weighted average of the total costs shown in the last row is Rs 207 per annum on clothing. That makes it an approximate per capita monthly expenditure of Rs 17 on clothing.
(g) The right to education: As per the 93rd Amendment of the Constitution of India, education is a fundamental right of every citizen [Rajalakshmi 2001]. It states: “The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine”. It also stipulates that it is the fundamental duty of “a parent or guardian to provide opportunities for education to his child or, as the case may be, ward between the age of six and fourteen years”.
It should be the minimum responsibility of the state to ensure that each young citizen has access to cost-free schooling with adequate infrastructure (a stipulated classroom size and physical amenities including furniture, library, laboratory, etc) and qualified teachers. Such a school should be available to each citizen of this country so as to provide complete and quality education. Moreover, we propose that such an institution should lie within a two km radius of each person’s home so as to ensure not more than 30 minutes are spent walking to school. Failing this, it should be the responsibility of the state to provide transport to the school.
At present it is not easy to get information on access to free and high quality education. Data largely shows information on the number of schools without information on the quality of these institutions. However, without delving into the question of quality, we can see what percentage of the population receives their fundamental right to education till the secondary level or standard 10. Those who have turned 15 should ideally have completed their secondary education.
As per the latest National Sample Survey on Education in 1999-2000, 71.16 per cent of the people in the 15-19 year age group had not completed a secondary education. Therefore, nearly three-fourths of Indian youngsters have not been able to access their fundamental right of education accorded to them by the Constitution.15 This clearly shows that establishing rights is of no value if means to achieve them are not simultaneously provided. As of 2002-03, about 85.2 per cent of the nearly six lakh villages in India did not have a school providing secondary education.16
(h) Access to an all-weather road and public transport: Connectivity is probably
the single most important factor guiding whether people of a particular region are being able to access their basic needs of education, healthcare, shelter, etc. The road connectivity will ensure transfer of not only people to and fro from different regions, but will also ensure trade of goods and services. However, in India, it is not uncommon to hear anecdotal stories of villagers from remote parts of the country travelling for hours on end to reach even an all-weather road. Upon reaching such a road, they wait further in hope for a bus that will stop. Such stories are not surprising considering the fact that around 43 per cent of Indian villages or over 2,70,000 villages are not connected by road.17 Furthermore, around 25 per cent of villages that have a population of over 1,000 are not connected by road [GoI 2002].
Table 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per Capita
Miscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous Expenditure
Source: Government of India (2001a):NSS Report No 454: Household Consumer Expenditure in India, 1999-2000 – Key Results, National Sample Survey Organisation, New Delhi.
Table 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and Kerosene
Source: Government of India (2004a): Central Government Subsidies in India, Ministry of Finance, Department of Economic Affairs, New Delhi.
Table 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and Cost
Child Male Female Male Adult Female Adult (Age: 0-4) (Age: 5-17) (Age: 5-17)
Clothing • 1 metre of shirt • 3.6 metres of • 3.3 metres of • 1.4 metres of •1 three-metre requirements material shirt material shirt material shirt material sari
• 0.8 metre • 2 metres of • 1.8 metres of • 1.2 metres of •1 metre of of trouser material trouser material skirt/salwar trouser material blouse (includes two (includes one material (inclu-(includes one material pairs of children’s pair of clothing des one pair pair of clothing) (includes one wear) and two uniform of clothing and sari and a
shirts and one two pairs of blouse)
uniform shorts/ school
trousers uniform)
Cost of cloth 150.68 267.96 343.00 190.39 137.07
Sources: Price of cloth for shirt, pyjama, cloth, etc, Rs 47.85. Price of cloth for coat, trousers, overcoat, etc, Rs 102.83. Price of sari (3 m): Rs 83.22. Prices are calculated using the weighted average of the rate at which urban and rural India bought cloth material as given in GoI 2001c. The figure is adjusted for inflation.
(i) Miscellaneous expenditures: Of all the basic needs highlighted above, four of them
– nutrition, healthcare, clothing and energy consumption – have been quantified in rupee terms. The total cost of obtaining these needs comes to Rs 675 per person per month. However, apart from this cost, various other unavoidable expenditures invariably arise that are hard to account for in advance. Moreover, more often than not, such expenditure by the poor is incurred while trying to obtain one’s basic needs. For example, obtaining healthcare would often mean spending money travelling to the doctor; obtaining a nutritious diet involves buying utensils to cook in; getting clothes can include stitching costs; etc.
Therefore, while computing a poverty line, we need to factor these miscellaneous expenses. The present official poverty line accounts for miscellaneous expenditure by adding to the poverty line the total nonfood expenditure of the group just on the poverty line. This paper follows a variation of this. Instead of including total nonfood expenditure, only expenditure under the heads of “miscellaneous consumer goods” (includes soap, stationery, etc); “miscellaneous consumer services” (includes transport, etc) and “durable goods” are included. ‘The durable goods’ are included because items such as vessels, furniture, etc, all come under this head and typically families need to buy some of these items every year. Table 9 shows the amount spent under these heads.
Total non-food expenditure is not used because it includes expenditure on clothing, healthcare, etc, that has already been accounted for above through proposed norms. Additionally, total non-food expenditure also includes expenditure on tobacco, intoxicants, etc, which need not be a part of a poverty line. Similarly, our poverty line does not include expenditure on leisure, festivities, all of which are an integral part of society. However, the responsibility of the state does not extend to these, as its primary task is to ensure that each citizen has access to the basic essentials of life. Therefore, a person who is just above the poverty line, as we define it, is only ensured of the most basic needs.
Thus from Table 10, we can see that total monthly miscellaneous expenditure comes to Rs 164 per person.
(j) What it really costs to live with a modicum of dignity?: Summing up minimum costs for nutrition (Rs 573), health (Rs 30), clothing (Rs 17), energy consumption (Rs 55) and miscellaneous expenditure (Rs 164); the poverty line in India should be about Rs 840 per capita per month.18
At this expenditure level nearly 69 per cent of India’s total population is below the poverty line (Table 10). That is over two-and-a-half times the present official poverty rate of 26.1 per cent. The situation in rural India is much worse with over 84 per cent of the rural populace below this more realistic poverty line.
Though the poverty line of Rs 840 per month established above is more inclusive of the basic needs of human life, it still only partially reveals the true state of poverty in India. This is clearly seen in Table 11 which shows that 24.4 per cent of all households above the poverty line of Rs 840 do not have pucca houses. Therefore, a person spending more than Rs 840 per month does not necessarily have access to all the fundamental needs of life.
Therefore, in addition to the poverty line, a proper definition of who is poor should also include “access parameters” that measure access to drinking water, shelter, etc. To sum up what we saw earlier, listed below are basic needs and the percentage of households that do not have access to them.
Table 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a Holistic
Poverty LinePoverty LinePoverty LinePoverty LinePoverty Line
Area
Percentage
Rural Urban Weighted average
84.6 42.4 68.8
Note: Calculated using Government of India(2001a): NSS Report No 454: Household Consumer Expenditure in India, 1999-2000 – Key Results, National Sample Survey Organisation, New Delhi and Government of India (2005b): ‘Statistics, Index Numbers’, Labour Bureau, October 2005 and a poverty line of Rs 840.
– 37.7 per cent of Indian households do not have access to a nearby water source; 49 per cent do not have a proper shelter;
69.5 per cent do not have access to suitable toilets; 85.2 per cent of Indian villages do not have a secondary school and 43 per cent of Indian villages do not have an allweather road connecting them.
The realistic poverty line that we propose along with these access parameters will provide a real, more inclusive and clear picture of poverty in India. Therefore, as we define it, a person is poor in India if he or she has a monthly per capita expenditure lesser than Rs 840 or does not have access to either drinking water; proper shelter; sanitation; quality secondary education; or an all-weather road with public transport.
IVIVIVIVIV
Getting It Right:Getting It Right:Getting It Right:Getting It Right:Getting It Right:
Redefining the Poverty LineRedefining the Poverty LineRedefining the Poverty LineRedefining the Poverty LineRedefining the Poverty Line
Clearly, the present official definition of poverty grossly misrepresents the real situation. It is entirely inappropriate to have a simple caloric measure as the yardstick of poverty. The responsibility of the state exceeds this manifold. We need to upgrade the concept of food security to that of nutritious food security. In addition, it should also be the right of every Indian citizen to have access to safe shelter, sanitation, healthcare, education and clothing. Therefore, when we aim policy for the poor, these benchmarks should be our target. Only worrying about each citizen’s foodgrain intake is clearly aiming too low.
This poverty line should be calculated for each state separately to account for
Table 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses by
MPCE* ClassMPCE* ClassMPCE* ClassMPCE* ClassMPCE* Class
Monthly Per Capita
Pucca
Non-Pucca
Expenditure (Rs)
House
House
0-235
23.2
76.8
Weighted average of 61.6 per cent of households below the poverty line of Rs 840 living in non-pucca houses
235-265
23.6
76.4
265-320
27.1
72.9
320-365
29.8
70.2
365-410
33.3
66.7
410-460
39.2
60.8
460-520
43.6
56.4
520-605
48.4
51.6
605-730
56.4
43.6
730-980 (PLG**)
64.4
35.6
Weighted average of 24.4 per cent of households above
the poverty line of Rs 840 living in non-pucca houses
Source: Government of India (2004b): NSS Report No 488: Housing Condition in India, Housing Stock and Constructions, NSS 58th Round, July 2002-December 2002, National Sample Survey Organisation, New Delhi.
regional differences in taste, clothing requirement, housing requirement, etc. It is also important to understand that norms of basic needs and what can be constituted as luxuries evolve over time. For example, presently one tap in the bathroom is considered a minimum norm. However, in a few years as more and more households fulfil this norm, the norm may be upgraded to include a flush toilet in each bathroom. Similarly, by 2020, piped gas for cooking and heating may even become the norm.
To account for such changes in established norms, the poverty line should be updated every five years. The present poverty line is updated only to account for increases in prices. In the long run, however, this distorts the picture of poverty. For example, as shown earlier, even those just above the poverty line do not consume the requisite amount of calories.
However, one of the most frequent arguments used against updating the poverty line – except for with the inflation index – is the fact that overtime comparisons become untenable. However, this argument is unjustified as you can always compute a “food expenditure level” which can be increased every year based on inflation. This can be used to see what percentage of the population is below this expenditure line and how it has changed overtime. There is no need to subordinate the task of poverty measurement to poverty comparison.
Based on our proposed poverty line of Rs 840 per month, the state should try to ensure that a typical household of five people is able to earn around Rs 50,000 per year, or about Rs 4,200 per month. This household should have access to a pucca house with basic amenities such as a toilet connected to a sewage system and electrical fittings. Access to water to a household should be within 10 to 15 metres if not within the dwelling unit – which would be ideal. The children of the household should be able to access their fundamental constitutional right to education. Moreover, the state needs to go beyond just offering an accessible school, but should also ensure that the schooling guarantees each student equal opportunities in life.
Such a household with its most fundamental of needs met should be the ideal that the state aims towards. This calls for a paradigm shift in the sphere of development policy in this country. A shift that is imperative if we truly wish for a new India.
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NotesNotesNotesNotesNotes
1 These figures are arrived at by indexing the rural poverty line with the consumer price index for agricultural labourers and the urban poverty line with the consumer price index for industrial workers. Both are available from the labour bureau, government of India. These are the indices recommended by the Planning Commission [GoI 1993]. However, further sophistications such as adjusting the data to state-wise price indices, etc, have not been carried out.
2 There exist more than just three criticisms to the present poverty line. The three elucidated here theoretically examine how the current official poverty threshold does not adequately measure the true extent of poverty in India.
3 Pronab Sen (2005) gives a counter-argument to this by suggesting that this fall in calorie intake reflects a choice on the part of the consumer and his capability to buy food is still intact as it was before. He shows that if the poverty line group (PLG) buys calories (food) at the same rate (prices) as those below the PLG, then they can reach the prescribed caloric standard. This is, however, an untenable and tautological argument. Firstly, calories bought by people below the poverty line are cheaper because of its lower quality. It is, therefore unreasonable to ask the PLG class to consume a basket of food of lower quality than they deemed fit as revealed by their preference. Secondly, and more importantly, if this argument was valid, then the Planning Commission, while calculating the poverty line in 1979, should have used the cheapest rate of calories to calculate the poverty line. If it had done so, the poverty line would have been even lower than it is today.
4 This is calculated from ICMR (2004) which gives caloric recommendations for all agegroups and using the 1991 Census for the age and gender distribution of the population. As mentioned, it is assumed that male and female adults carry out heavy activity, thereby needing 3,800 and 2,925 calories per diem.
5 Information on the impact of nutrition deficiency
from MSN Encarta Encyclopaedia (2005).
6 Calculated from government of India (2001c).
7 To calculate the nutritional requirement of
adults, it is assumed that they undertake heavy activity, and not moderate or sedentary activity. This is because the poor in India are invariably carrying out unskilled manual labour.
8 We use Rs 60 here for our calculation as that is the prescribed minimum wage as per the National Rural Employment Guarantee Scheme which takes into account the range of minimum wages prescribed in India [GoI 2005c).
9 The authors would like to thank Rajeev Ahuja for his personal views on per capita medical expenditure. Ahuja is an expert on health insurance.
10 While one can use the average expenditure on health (as reported by the NSSO) for this purpose, it would be tautological to do so for reasons similar to the ones discussed in Section II C.
11 There are certain limitations for using this scheme as a proxy. Firstly, it only includes inpatient care and does not cover outpatient costs, i e, visits to the doctor for minor ailments. This tends to understate the actual expenditure on health. Secondly, insurance premiums include the transaction costs for the insurer and the profit margin. This tends to overstate the actual expenditure. Thirdly, the Universal Health Insurance Scheme is not a tested model and thus the premiums mentioned are still on trialbasis [Ahuja 2004].
12 It is important to insist on RCC roofing because asbestos is a major indoor pollutant and hence should not be used for roofing purposes [Medappa 2001].
13 However, according to a National Sample Survey on Housing [GoI 2004b], only 46 per cent of Indian households are not electrified. According to this report, a household with external or temporary wiring is also electrified. Source for the figure we use is World Bank (2005).
14 Taken from the distribution quota of Punjab and Karnataka. Information from the department of food and supplies, government of Punjab and ministry of food and civil supplies, government of Karnataka.
15 Interestingly, this is in contrast with the Pratham Report on Education (2005), which suggests that 93.1 per cent of kids between the age of six and 14 are enrolled in schools. However, the number of people who have completed secondary education (28.84 per cent as per the survey) is a much truer indicator about the effectiveness of schooling in India. Pratham’s own finding proves this that over 50 per cent of the “enrolled” students could not read a standard II level simple story. In addition, it has been repeatedly argued that low access to education is a major problem in India. See Shariff and Husain (2006).
16 Department of secondary and higher education, ministry of human resource development, government of India.
17 Lok Sabha Starred Question No 238, dated March 13, 2001.
18 The actual sum is Rs 839; we round it off for convenience.
Ahuja, Rajeev (2004): ‘Health Insurance for the Poor in India’, Working Paper No 123, Indian Council for Research on International Economic Relations.
GoI (1979): Report of the Task Force on Projections of Minimum Needs and Effective Consumption Demand, Perspective Planning Division, Planning Commission, Government of India, New Delhi.
– (1993): Report of the Expert Group on Estimation of Proportion and Number of Poor, Perspective Planning Division, Planning Commission, Government of India, New Delhi.
– (2001a): NSS Report No 454: Household Consumer Expenditure in India, 1999-2000 – Key Results, National Sample Survey Organisation, Government of India, New Delhi.
– (2001b): NSS Report No 461: Consumption of Some Important Commodities in India, 19992000, National Sample Survey Organisation, Government of India, New Delhi.
– (2001c): NSS Report No 471: Nutritional Intake in India, 1999-2000, National Sample Survey Organisation, Government of India, New Delhi.
–(2001d): Census of India 2001, Ministry of Home Affairs, Government of India, New Delhi.
– (2002): National Human Development Report, Planning Commission, Government of India, New Delhi.
– (2003): Electricity Act, 2003, Ministry of Power, Government of India, New Delhi.
– (2004a): Central Government Subsidies in India, Ministry of Finance, Department of Economic Affairs, Government of India, New Delhi.
– (2004b): NSS Report No 488: Housing Condition in India, Housing Stock and Constructions, NSS 58th Round, July 2002-December 2002, National Sample Survey Organisation, Government of India, New Delhi.
– (2005a): Prices of Food Stuffs from Department
of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
–– (2005b): ‘Statistics, Index Numbers’, Labour Bureau, Government of India, December.
– (2005c): National Rural Employment Guarantee Act, Ministry of Rural Development, Government of India.
Howard, Guy (2003): Domestic Water Quantity, Service Level and Health, World Health Organisation.
Hughes, Gordon, Meghan Dunleavy, Kseniya Lvovsky (undated): ‘The Health Benefits of Clean Fuels in India: A Case Study of Andhra Pradesh’, accessed from www.cleanairnet.org.
ICMR(2003): Dietary Guidelines for Indians – A Manual, National Institute of Nutrition, Indian Council of Medical Research, Hyderabad.
– (2004): Nutrient Requirements and Recommended Dietary Allowances for Indians, National Institute of Nutrition, Indian Council of Medical Research, Hyderabad.
ICPHC (1978): Alma Ata Declaration,International Conference on Primary Health Care.
IIPS (2000): National Family Health Survey (NFHS-2), 1998-99, International Institute of Population Sciences and ORC Macro, Mumbai.
Medappa, N (ed) (2001): ‘Indoor Air Pollution: A Major Environmental and Public Health Concern’, ICMR Bulletin, Vol 31, No 5, May.
Pratham (2006):Annual Status of Education Report 2005, New Delhi.
Ramadoss, Anbumani (2004): ‘National Rural Health Mission’, Ministry of Health and Family Welfare.
Rajalakshmi, T K (2001): ‘A Regressive Bill’, Frontline, Volume 18, Issue 25, December 8-21.
Saxena, N C (2001): ‘Poverty Estimates for 19992000’, Planning Commission, New Delhi.
Sen, Pronab (2005): ‘Of Calories and Things: Reflections on Nutritional Norms, Poverty Lines and Consumption Behaviour in India’, Economic and Political Weekly, Vol XL, No 43, October 22-28.
Sivaraman, B (2006): ‘Contours of the Deepening Agrarian Crisis’, Liberation, January.
Shariff, Abusaleh and Zakir Husain (2006): ‘Stuck in Shallow Waters’, Times of India, January 26.
UNDP (2005): Human Development Report 2005, United Nations Development Programme, United Nations, New York.
UNICEF (2005): ‘Nutrition, the Picture in India’, Collected from the UNICEF website: www.unicef.org/india/nutrition, United Nations International Children’s Emergency Fund.
World Bank (2005):World Development Indicators 2005, International Bank for Reconstruction and Development, World Bank, Washington.
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Defining Away the PoorDefining Away the PoorDefining Away the PoorDefining Away the PoorDefining Away the Poor 
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The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:The Present Poverty Line:
Three Major ProblemsThree Major ProblemsThree Major ProblemsThree Major ProblemsThree Major Problems
22222 
IIIIIIIIIIIIIII 
Towards a More RealisticTowards a More RealisticTowards a More RealisticTowards a More RealisticTowards a More Realistic 
Definition of PovertyDefinition of PovertyDefinition of PovertyDefinition of PovertyDefinition of Poverty 
Table 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake ofTable 1: Average Per Person Intake of
Calories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and AboveCalories of Groups Below, On and Above
the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000)the Poverty Line (1999-2000) 
RuralRuralRuralRuralRural 
UrbanUrbanUrbanUrbanUrban 
Table 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and AdultsTable 2: Balanced Diet for Infants, Children, Adolescents and Adults 
Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005Table 3: Prices of Foodstuffs as of 2005 
Table 4: Cost of DietTable 4: Cost of DietTable 4: Cost of DietTable 4: Cost of DietTable 4: Cost of Diet 
Table 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel UsedTable 6: Main Type of Fuel Used
for Cooking in Indiafor Cooking in Indiafor Cooking in Indiafor Cooking in Indiafor Cooking in India 
Table 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a MonthTable 5: Minimum Electricity Consumption of a Household in a Month 
Table 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per CapitaTable 9: Monthly Per Capita
Miscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous Expenditure
Table 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and KeroseneTable 7: Subsidy on LPG and Kerosene 
Table 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and CostTable 8: Minimum Clothing Requirements and Cost 
Table 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a HolisticTable 10: Poverty Ratio Using a Holistic
Poverty LinePoverty LinePoverty LinePoverty LinePoverty Line 
IVIVIVIVIV 
Getting It Right:Getting It Right:Getting It Right:Getting It Right:Getting It Right:
Redefining the Poverty LineRedefining the Poverty LineRedefining the Poverty LineRedefining the Poverty LineRedefining the Poverty Line 
Table 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses byTable 11: Percentage of Households Living in Pucca or Non-Pucca Houses by
MPCE* ClassMPCE* ClassMPCE* ClassMPCE* ClassMPCE* Class
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