Author: Surjit S Bhalla
Publication: The Indian Express
Date: June 4, 2011
URL: http://www.indianexpress.com/news/the-injustice-of-our-antipoor-schemes/799249/0
Introduction: Anti-poverty schemes may come
with annual corruption level greater than once in-a-decade scams like 2G.
is the Supreme Court looking?
The expansion of poverty programmes in India
has been spearheaded by Sonia Gandhi and her National Advisory Council (NAC).
She cannot ignore the fact that by expanding old-fashioned anti-poverty schemes,
she is also increasing old-fashioned "in the name of the poor" corruption.
As old-fashioned as Indira Gandhi's trump card of Garibi Hatao in 1971. This
is 2011 - does Gandhi really believe that nothing has changed in India in
40 years? Are we that poor, that backward, and that incompetent?
Why is the discussion on the politically charged,
and politically correct, subject of poverty almost always one-sided? The ayatollahs
of poverty policy believe they cannot possibly do anything wrong because,
after all, they are designing policies for the poor. When large leakages in
poverty programmes are documented (ironically, first asserted by Rajiv Gandhi
in 1985), the refrain is: why are you so worried about leakage to the poor
when there are leakages to major corporations - and scams against the poor?
If the telecom ministry can be corrupt, why
not the ministry of rural development? Why do we cringe at the mere discussion
that the ministry of consumer affairs (in charge of food distribution to the
poor), may harbour corrupt practices? Do we really believe that the government
of India has a special screening device whereby only honest people are recruited
for programmes dealing with the poor? Do we really believe that political
parties that talk the most about poverty removal, like the Congress, are the
least corrupt? Just because the Congress talks about, and introduces one in-the-name-of-the-poor
act after another (like the Right to Food Act), does it make it less corrupt?
Or does it absolve it of its corruption in non-poor related areas? Is that
why the politically correct NAC was formed - to deflect, and redeem, the acts
done by non-NAC members of the Congress party?
In my previous article, I had documented examples
of lies on poverty masquerading as informed analysis. I want to add to that
list. In a document entitled "The right to food in India", Biraj
Patnaik, principal advisor to the Supreme Court Commissioners on the Right
to Food Act, presents some carefully selected data. A graph (slide 20) entitled
"Net availability of foodgrains per capita per day in gms" presents
data which ends in 2001; this graph shows a low level of foodgrains consumption
in that year - 416 grams per person per day. The report was written in 2007
and almost all the data presented in the report ends in 2006. The author could
have noted, but did not, that in 2002 foodgrain consumption shot back to a
close-to-historical high of 494 grams, and that average consumption during
the five years 2002-2006 of 453 grams was close to the historical average
since 1951!
Since Patnaik is a major adviser to the Supreme
Court, his views on who is poor and what constitutes poverty are particularly
important. A minimum consumption level of Rs 15 (rural) and Rs 20 (urban)
per person per day is too low; this is a "a starvation line, not a poverty
line." Incidentally, in a plea for informed analysis, especially when
present day consumption is compared to this poverty definition, the media
should note that the official poverty line is in 2004-05 prices; today, in
2011, that same poverty line translates into a line approximating Rs 28 for
the average poor (Rs 26 in rural and Rs 33 in urban India).
And who does the Supreme
Court adviser consider to be the poor? Well,
a telephone booth owner could be poor, as well as a person owning a two-wheeler.
Is there an objective method of measuring
poverty? Traditionally, in India (and the rest of the world), the poor are
classified as such according to their survey income or consumption. The major
source of such data, the National Sample Survey Organisation (NSSO), has tragically
declined in its efficiency. The survey is still processed with unpardonable
delays, and the primary information - what is a family's total consumption
- is way off the actual. One indication of how much way off is provided by
the fact that the NSSO's estimate of average consumption in 2009-10 was only
about 43 per cent of the consumption indicated by the national accounts.
Household surveys around the world generally
capture less of national accounts consumption so the fact that the NSSO estimate
is less than a 100 per cent is just another dog bites man story. What is truly
a man bites dog (or NSSO bites dust) story is the low, low, estimate of 43
per cent. To put in perspective, among all consumer surveys done by mankind
since 1950, the India NSSO 2009-10 "performance" is among the five
worst.
If the NSSO 2009-10 estimate of consumption
were higher and more reasonable and more in line with comparable surveys in
the 1960s, 1970s, and 1980s, measured average consumption would be closer
to 80 per cent of the national accounts estimate, rather than 40 per cent
- and poverty levels half that "documented" by the NSSO (Supreme
Court please note). Is the Indian policymaker, and especially those belonging
to the huge (and hugely corrupt?) poverty industry, ready to accept that poverty
in India is approximately half that stated by the government?
Related to the level of poverty is an equally
important policy variable - the amount of expenditure needed to remove poverty.
Notwithstanding this importance (tax money is freely available for noble causes),
the discussion on poverty removal in India never addresses the minimum expenditure
needed to remove poverty. The average poor today need about 16 per cent extra
income to become non-poor, that is, go above the poverty line of Rs 28 per
day. In today's prices, that is an extra Rs 4.5 per person per day. If there
are 25 per cent poor in India in 2011-12, then the cost of removing poverty
in the entire population - Rs 49,000 crore. With an estimate of 20 per cent
poor (200 million), the cost goes down to Rs 39,000 crore.
No one claims, or should claim, that perfect
targeting is possible; though everyone should believe that with today's technology,
anything more than 20 per cent "leakage" is pure poverty corruption.
Given that we are spending Rs 130,000 crore in 2011/12 on just food and NREGA
poverty programmes, it is likely that poverty corruption is annually more
than the once-in-decades 2G scam, and annually more than double the amount
actually needed to remove absolute poverty.
- The writer is chairman of Oxus Investments,
an emerging market advisory and fund management firm
