Poor as a Commodity

This is a blog that I wrote on 21st April 2010 for my earlier site . I am tempted to reproduce it without any revision today in the wake of Prof. Abhijit Banerjee getting his Nobel for his work on poor of the world. Although his work is extremely valuable and revolutionary from methodological point, I am still skeptical about the obsession of social scientists and politicians with poverty , particularly absolute poverty.

Counting tigers and poor have become a national pastime of India’s leisure class. While the population of tigers we want to protect, we would like to number of poor to decline to zero.  We are failing in both, some would say miserably.

 The practice of counting number of poor in a country goes back to the second half of nineteenth century when Charles Booth carried out a remarkable survey of living conditions in London. Booth wanted to contest the results of an 1885 report that claimed that 25% of Londoners were living in abject poverty.  Booth and his team visited every street of London and estimated that the incidence of poverty at 31% initially and then at 35%.  In the first decade of 21st century and after 62 years of independence we can not claim to be in a better position.

The reason for obsessive preoccupation with a precise headcount of poor on the part politicians and economists is not difficult to understand. The Indian government has a huge budget for a variety of poverty alleviation programs. Every state vies for a share of the cake and it depends on the number of poor. There is a turf war between the Ministry of Rural Development (MORD) and the Planning Commission with regard to this counting tussle. A footnote in the Expert Committee Report of the MORD is quite candid about it. It says-

Which Ministry in GOI has the best control over the district collectors, CEO Zilla Parishads and Panchyats? The obvious answer is the Ministry of Rural Development (MoRD). , because it transfers huge funds to DRDAs and to panchayats, runs NREGA, BRGF and TSC, and ever since their creation panchayats have always regarded MoRD as their mentor.  Hence MoRD is the only Ministry in GOI that can make the field officials and the panchayats take its guidelines seriously. Therefore the task of overseeing preparation of the new BPL lists has been rightly given to the MoRD

Another very interesting thing that this report brings into focus the practice of fixing number of BPL (below poverty line) families to the limit fixed by the planning commission estimated poverty ratio. Thus BPL certificate becomes a badge of honor like a caste certificate. Only difference is that BPL certificate can become a tradable commodity. In fact Mr. P. Sainath, a member of the expert group has put it succinctly

  • In many regions like the KBK, with millions extremely poor, you will find that most of the BPL cards in a village are with the local moneylender. The poor owe him money and he takes their cards as collateral. You can find one man with 400 cards.

He also notes that

Dharavi , the biggest slum in all the world  and with a population of over a million ended up home to just 141 BPL cards. If that’s all the poor there are in that slum, then India is poverty-free.

The expert group estimates the number of poor in India as close to 50% as compared to 28.3%.  With this order of variation coming from two arms of the same government, what sanctity is there in these numbers?

Apart from the exegesis of official experts, we have a whole industry of Poverty Research mostly funded by multilateral agencies and grant giving foundations. The route to stardom is well laid out – from JNU / Delhi school to Cambridge on both side of Atlantics or some other ivy league schools and then to the portal of the World bank / UN organizations. India which is estimated to be home of the largest number of poor in the world has also produced the maximum number of researchers on poverty.

And the debate on what is the best way, statistically speaking, to estimate incidence of poverty some times assumes surrealistic proportion.  One just has to recount how, long back, two highly qualified statisticians and professors engaged themselves in a fierce debate about how to take into account inter-person variation in calories intakes and consequently how to correctly measure the incidence of poverty using a minimum level of calorie intake recommended by nutritionists.

What is the real purpose of the debate? The real motive is political – which set of policy measures is good for poverty reduction. So if your prior belief is that economic reform is bad for the country then get a suitable measure of poverty index to demonstrate that poverty has increased in the post reform period. If one’s prior belief is opposite then get hold of another measure. It is said in statistics that if you beat some data sufficiently you can always reject a null hypothesis.

I can not better the opening sentences of Charles Elliott’ book Patterns of Poverty in the Third World in this regard-

The basic configuration of world poverty is well known. Although the detailed statistics are unreliable, the services of a statistician are not required to establish that the majority of mankind is ill-fed, ill-housed, under-educated, and prey to preventable disease.

Do we really need to count the number of poor so accurately as if it is gravitational constant on which depends the trajectory of a missile?  Poverty is ugly and de-humanizing. It is ugly more in a relative sense than in an absolute sense. A poor is not treated as a full citizen in any country- developed, under-developed, capitalist or socialist. The greatest suffering a poor has when she is made to feel as a lesser human being, a person deserving only piety from others. The tears of universal humiliation are much more real and enduring than the tears of hunger. It does not matter whether she is a singleton or numerous.