Revisiting Indian poverty

Even as India once more self-declares its “arrival on the world stage” with a symbol for the Indian rupee, a global assessment presents a depressing picture of India’s actual economic performance. In a study whose conclusions were to be expected, the Oxford Poverty and Human Development Initiative (OPHDI) has revealed that an appropriate index of poverty (and deprivation) finds its incidence in India and elsewhere to be much greater than estimated by the controversy-dogged measures of “income poverty” that abound.

Commissioned by the Human Development Report Office of the United Nations Development Programme to evolve a multi-dimensional approach to and define a more appropriate index of poverty for inclusion in the 20th anniversary edition of its flagship Human Development Report, the OPHDI has recently completed its study that provides a new assessment of the level and distribution of global poverty.

Authored by Sabina Alkire and James Foster, the new measures of poverty go beyond the income measures to capture the range of deprivations individuals suffer because of factors varying from inadequate education to ill health and poor standards of living. Thus, besides the conventional head-count of those below a certain income or calorie-consumption level the Alkire-Foster index attempts (as the Human Development Index had done) to aggregate measures of a range of deprivations. It also attempts to measure the intensity of poverty in terms of the average number of deprivations individuals in households suffer.

It is to be expected that as we move from purely income measures to more multi-dimensional indices the incidence and intensity of poverty would increase. But what is noteworthy in the evidence on the Indian case is not just the gap between measures of income poverty and societal deprivation, but the story it tells about the incidence of poverty in certain Indian regions when compared with other poor countries of the world and about the poor progress made over time in addressing certain kinds of deprivation. Thus, OPHI research suggests that as compared with 410 million multi-dimensionally poor people resident in 26 of the poorest African countries there are as many as 421 million in just eight of the poorer Indian states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal). Further, if we take an indicator such as the proportion of malnourished children, progress with dealing with acute malnourishment seems non-existent: the figure across India stood at 46 per cent in 2005-06 as compared with 47 per cent in 1998-99.

These and other similar pieces of evidence indicate that the policy establishment must exercise more than modicum of caution when advertising India’s economic success and announcing its arrival as a second-tier global power. Moreover, since these developments occur in the midst of India’s much-vaunted departure from the “Hindu rate of growth” and its climb to a 9 per cent rate, they raise two questions. First, does GDP growth tell us anything about economic performance defined to include some measure of economic well-being? Second, have we been experiencing in this country a process of growth which is hugely inaequalising, with attendant implications for social order?

India’s elite did not require the OPHI to alert it on the need to pose these questions. It has for long been known that the official estimates of even income poverty had cynically misused numbers that were inter-temporally incomparable because of changes in the questionnaire used by the National Sample Survey Organisation in its quinquennial consumer expenditure surveys. This helped present a picture of substantial decline in the incidence of poverty over time, and especially during the years of liberalisation. Moreover, even measures of poverty that adjusted for the problem of incomparability were based on a poverty line so low that if we took an expenditure level of, say, Rs. 20 a day, the incidence of poverty more than doubled. As a result we now have a multiplicity of estimates of the number and proportion of the income poor in India.

But this too has not helped settle the controversy, because the evidence pointed to very different estimates. While the “poverty lines” for rural and urban areas are supposed to be (price-adjusted) representations of the income required to deliver defined individual calorific intakes, direct figures on actual calorific intake point to much larger populations being deprived of a minimum of nutrition than the income poverty measures do.

Finally, it has been known that once we went beyond pure income measures of poverty and looked at other indicators of deprivation, not only was the incidence of deprivation substantial in terms of indicators varying from literacy to child malnutrition, but the progress in alleviating certain forms of deprivation had slowed during the high growth years. The problem is not just that India has significantly underperformed when addressing poverty and deprivation over 60-plus years of post-Independence development, but that progress has slowed in precisely those years when the surpluses available to tackle this problem has increased substantially. The problem is not inadequate growth, but one of institutional inadequacy. It is also one of an increasing reluctance of the elite to address those inadequacies and, therefore, of the failure of what is undisputedly one of the most remarkable experiments with parliamentary democracy.