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Understanding Poverty

November 7, 2011

Ramaiah lived with his wife, three children and elderly mother on the outskirts of Bangalore. His life was very simple and revolved only around ensuring food at the table. Every morning he would set out to Bangalore and find work at one of the many construction sites. He was paid by the day and had no other form of security. His son was 15 years old and had dropped out of school to join him as a helper. They usually worked at least 20 days a month and together they earned Rs.200 a day and after their daily expenses spent on travel and food, managed to take home about Rs.125. Ramaiah had no land or any other means of livelihood. His only asset was a 20’ x 20’ site and a small house where they all lived together. His two younger daughters were in school and the mid-day meals they got there went a long way in ensuring that they did not go hungry during the day. Having a mobile phone ensured that the local labour contractor could contact him and keep him posted of any job opportunities that came his way. His mother did not get old-age pension or widow pension as she was informed that she was not eligible (as she had an adult son who was expected to provide for her). Ramaiah’s friend told him that he could apply for a BPL card which would entitle him to subsidized food grains at the local ‘ration shop’. Missing many days’ wages, Ramaiah visited the Taluk office and applied for one; only to be told many months later that he was not eligible, as he had mentioned his average annual earnings as between Rs.30,000 to 40,000. Little did he realize that honesty had its own consequences in the way the system operated. He was finding it difficult to make ends meet with rice now selling at nearly Rs.30 per kg. Ragi, his staple food too was no longer cheap and cost him around Rs.12 per kg. Vegetables and meat were reserved for special occasions and was becoming increasingly rare. He was perpetually borrowing from the local moneylender who mercilessly charged him around 120% interest. Ramaiah was painfully conscious of his helplessness and found refuge in his evening drink that was making matters worse for him and his family.

I had met Ramaiah at one of the construction sites in Bangalore as part of my investigations of the State’s Public Distribution System (PDS). I was asked by the then Lok Ayukta, Justice Santosh Hegde to investigate into the allegations of corruption and mal-administration in the PDS. As a part of this, I had taken on myself the responsibility of meeting and interacting with a large cross-section of the poor who were deserving of the benefits of the PDS system. I was actually amused at the criteria that the State had fixed for determining poverty. As per the state guidelines, Ramaiah was not eligible for a BPL card as his annual income was much higher than the permissible Rs.11,000 for rural areas and he possessed a mobile phone. How and who fixed these criteria is a mystery to me but I was further shocked by the recent declaration of the Planning Commission in an affidavit to the Supreme Court that any person with daily income less than Rs.26 in rural areas and Rs.32 in urban areas only were considered poor. How could I explain to Ramaiah that by this definition he was not poor and was not entitled to any of the social safety nets that a welfare state had created for families like his? I could not reconcile my own findings that more than 49% of the families with a BPL card in Karnataka were truly ineligible for the same. Ramaiah unfortunately belonged to one of those families who had not subverted the system or had not got the benefits of a shortsighted decision of the Government. The Government of Karnataka in 2008-09 for petty political gains had decreed that any person who submitted a self-declared affidavit of poverty was automatically entitled to a BPL card. What this has translated into today is that nearly 80% of families in the State are considered below the poverty line and are drawing the benefits of various schemes, while 5% of the deserving poor are completely left out.

While this is the reality of most regions of India, our economists and development experts seem to be eternally debating and arguing what would be the best way to define poverty. Should it be a mere monetary measurement of earning around $1 – 1.25/day or the per capita consumption of 2800 Kcals or something more? Committee after committee has been constituted with no clarity thrown on this matter. Recently, Oxford University came up with the Multi Dimension Indicators (MDI) of poverty that reveals that more than 645 million Indians are poor. This leaves India with more than 25% of the worlds poverty burden. Eight Indian states collectively have more poor people living here than the number of poor in the entire continent of Africa. Personally, I would agree with Gandhi that poverty is the worst form of violence and we now need to collectively focus on rooting this out. To me poverty would simplistically mean the ‘denial of opportunity’. While these definitions and calculations are indicative, what we need to understand is that they are in no way helping Ramaiah get out of the poverty trap that he is in. With food inflation hovering around 12-14%, families like his are condemned to stay poor. Many of the Government schemes, though well-intentioned, fail to reach them. And even when they do, they only help them in coping with and not in getting out of poverty. And till then they are asked to be content with the imaginary trickle down effect that the Planning Commission and the Government keeps talking about in an emerging Indian economy after the era of privatization and globalization.

In the present context of India, only the Government can drive development and help its citizens get out of poverty. The Government needs to consciously include rural areas into the economic engine which is now urban centric. The State and its machinery need to treat the poor with self-respect and the dignity they deserve, get them to work with the resources of the State, ensure enterprise and not make them into parasites, have special schemes for the people who need the safety net and ladders, focus on empowerment and capacity building that are long-term investments, ensure inclusive skill based education, create access to credit and banking systems and address the larger systemic concerns including good governance. Only when we look at this issue from a larger perspective and be multi-dimensional in our approach and philosophy and go beyond mere income-poverty can we truly get people like Ramaiah to live a life of dignity and integrate them into the new economy that India is rapidly creating. Development should result in a constant expansion of human capability and be the result of synergistic partnership between the Government, the community, the growing private sector, and a socially conscious NGO sector. Only then can the benefits of development result in equity and inclusive growth for all.


Categories: Musings
  1. Mano ravi
    November 9, 2011 at 6:34 am

    Unfortunately decisions in India alway seem to be taken with little or no awareness of reality. This situation is not dissimilar to how the powers that be think that there is a shortage of doctors when in reality there is mal-distribution.

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