New Delhi: In public the Narendra Modi government claims it has brought a large number of Indians out of poverty over the last decade. Many economists contest it to show that post-Covid India’s economic recovery has been K-shaped, with the rich growing richer and the poor becoming poorer. 

One way for the government and its advocates to prove their claim would be to use the government’s prescribed poverty line - the average monthly expenditure levels below which Indians are considered poor – and assess how many citizens have risen above it since 2014. 

They can’t. Despite recommendations from a task force set up by the Prime Minister in 2016 the Union government hasn’t officially decided on a poverty line for India.  

The Reporters’ Collective reviewed parliamentary records of the past decade. We found that at least six times the Union government was asked about the poverty line. Each time it deferred an answer. When the parliamentary Committee on Government Assurances pursued it later to get an answer, the government insisted the assurance be dropped each time. It was successful five out of six times. 

The task force was set up to recommend ways to combat poverty. The task force submitted its report in 2016 to the Prime Minister’s Office, with a focus on poverty measurement. Perusal of more than 100 reports of Parliament’s committee on assurances shows the government skirted questions on the implementation of all the recommendations of the task force at least 16 times. 

The government has left the question of a new poverty hanging despite criticism by the committee on assurances. The committee once called the government’s position and arguments “untenable” on an “issue of crucial national importance”.

Why have a ^poverty line?

Is an official poverty line a mere statistical exercise for economists to spar over?
No. The absence of an official poverty line has had real consequences for India’s citizens, particularly its poor. 

The government think tank Niti Aayog repeatedly claimed poverty has reduced since 2014. Based on such official but unsubstantiated claims, the BJP-led government argued before the Supreme Court against increasing the number of people receiving free or subsidised food as their legal right under the National Food Security Act amid the Covid pandemic. 

As The Collective previously reported, the government borrowed Niti Aayog’s logic that per capita income of the population in India has increased in real terms by 33.4%, which is bound to have taken a large number of households to higher income class – implying that the number of people who should avail subsidised foodgrains might have actually reduced. What’s perverse is that per capita income is an average. It can shift upwards even if the rich get richer while the poor turn poorer, just as economists claim it happened after the COVID-19 pandemic. 

This spurious argument would have fallen apart had the government done two things it is obligated to. Carried out the new population census as per design after 2021 and revised the poverty line. The government continues to use the population figures from 2011 Census to estimate the number of poor needing subsidised foodgrains (a little over 80 crore).

This is what the task force set up by Prime Minister Modi – the one his government hasn’t acted upon – said about the necessity of an official poverty line: “Having an official poverty line and therefore official poverty estimates helps concentrate the public policy discourse around an agreed set of numbers.” The committee, set up with then Niti Aayog vice-chairman Arvind Panagariya as the head, had recommended the government to set up an expert group and determine the poverty line, if it didn’t want the one followed under the previous UPA government. 

PARLIAMENT QUESTIONS

On 29 July 2016, Shrikant Eknath Shinde and Rajeshbhai Chudasama asked the Minister of Planning whether Niti Aayog had proposed setting up an expert committee to define a new poverty line and, if yes, when was the report expected.

In response, the government stated that “the panel of experts is yet to be appointed.” This was considered as an assurance by the Committee on Assurances. The panel it was speaking of was the one Panagariya Task Force had recommended in its report, submitted to the Prime Minister’s Office, a month earlier in June 2016. 

A few months later another question, this time by MP MK Raghavan, was raised on the Panagariya task force. He wanted to know about the number of people living below the poverty line, how the government was determining this number and if there was a task force now to estimate the number of poor in the country. The government in response first furnished the UPA-era data, and on his queries about its own task force, all it said was “The report of the task force is under the consideration of the government.”

After this the Ministry of Planning (which administers Niti Aayog) was asked about the formation of a new poverty line specifically six times, and about the task force on poverty eradication another 10 times.

Each time, the Minister of State for Ministry of Planning paraphrased and parroted the same set of lines as replies stating that the report made by the task force suggests that the matter regarding the formation of a poverty line be considered in greater depth by the country’s top experts on poverty before a final decision is made.

For eight years the government told Parliament that ‘the report was still under the consideration of the government’. 

In 2019, the parliamentary committee finally pulled up Niti Aayog over inaction on a poverty line for India. “The (assurance) committee feels that the issue is of crucial national importance and needs to be pursued vigorously to bring it to its logical conclusion,” it said. 

Yet, two years after this criticism, the government moved to have 10 assurances on the task force dropped in one go. It told the parliamentary committee that the report was “pending a final decision by the Government of India, therefore, it was not feasible to fulfil assurances by Niti Aayog.” 

The Niti Aayog and its administering ministry washed its hands off the issue. The decision lay with the Prime Minister, they indicated. The government was successful in getting  all 10 assurances dropped with this reasoning.

Prime Minister Modi is back in the saddle, his ministers and advocates have used other statistics and numbers to claim historical levels of poverty eradication despite chronic underemployment and the economic shocks of hard lockdowns during the pandemic. 

One of them is the Niti Aayog’s ‘multidimensional poverty index’-- an index that does everything else but give a statistical number for estimating poverty in India. 

The Panagariya task force itself clearly said that tracking “progress along specific components of poverty such as nutrition, housing, drinking water” – which is how multidimensional poverty indices work – should “complement” a poverty line but not “substitute” it.

This is what Bibek Debroy, member of the Economic Advisory Council to the Prime Minister, recently said about the multidimensional poverty index: “It’s not quite a poverty line”. “The question to ask is do we need a new poverty line to which this data can be applied?” he asked, referring to the newly released household consumption expenditure survey data. Economists use the poverty line number to the consumption expenditure survey to determine how many people in the country are poor at a given time. 

India first adopted a poverty line in 1979. The last official poverty line, called the Tendulkar poverty line, was adopted in 2009.  The UPA-led government, after facing public outrage over an extremely low poverty threshold of Rs 27 a day in rural India and Rs 33 in urban parts – appointed a new committee in 2012, called the Rangarajan committee. In June 2014 this committee recommended the poverty line to be Rs 32 a day in rural India and Rs 47 in towns and cities. Those spending more than these paltry amounts on an average would not be considered poor. By then the Modi-led BJP had come to power. 

Modi set up the Panagariya task force for poverty eradication which was supposed to review the poverty line. The task force remained inconclusive – it asked for yet another expert committee to determine the poverty line. 

Till date the Modi government has refused to draw an official poverty line. India’s poor have not been accounted for. 

THE OTHER ^BROKEN PROMISES