[MLL] The dishonesty in counting the poor: Utsa Patnaik

Subject: [MLL] The dishonesty in coun ng the poor: Utsa Patnaik From: Editor Revolu onary De ocracy !editor"revde #yahoo$co % Date: &'(&'()&*+ *+:,To: . ar/ist(leninist(list#greenhouse$econo ics$utah$edu. ! ar/ist(leninist( list#greenhouse$econo ics$utah$edu%
The dishonesty in counting the poor: Utsa Patnaik Thursday, 01 August 2013 The Planning Commission has once again embarrassed us ith its claims o! decline in po"erty by 2011#12 to grossly unrealistic le"els o! 13$% per cent o! population in urban areas and 2&$% per cent in rural areas, using monthly po"erty lines o! 's$ 1000 and 's$ (1) respecti"ely, or 's$ 33$3 and 's$ 2%$2 per day$ These princely amounts ill pay !or one urban male haircut hile they are supposed to meet all daily !ood and non#!ood li"ing costs$ The po"erty decline claimed is huge, a !ull ( per cent points !all in rural areas o"er the t o years since 200*#10, and a % per cent points !all in urban areas, ne"er mind that these t o years sa the a!termath o! drought, poor employment gro th and e+ceptionally rapid !ood price rise$ The logically incorrect estimation method that the Commission continues to use makes it an absolute certainty that in another !our years, hen the 201,#1& sur"ey results become a"ailable, it ill claim that urban po"erty is near -ero and rural po"erty only around 12 per cent$ This ill be the case regardless o! any rise in actual depri"ation and intensi!ication o! actual po"erty$ .ubstantial rise All o!!icial claims o! lo po"erty le"el and po"erty decline are /uite spurious, solely the result o! mistaken method$ 0n reality, po"erty is high and rising$ 1y 200*#10, a!ter meeting all essential non#!ood e+penses 2manu!actured necessities, utilities, rent, transport, health, education3, %&$& per cent o! rural persons could not consume enough !ood to gi"e 2200 calories per day, hile %3 per cent o! all urban persons could not access 2100 calories per day$ The comparable percentages !or 200,#& ere )*$& rural and ),$& urban, so there has been a substantial po"erty rise$ 4nce the 5.. releases its nutritional intake data !or 2011#12 e can see the change up to that year, but gi"en the high rate o! in!lation and sluggish 6ob gro th, the situation is likely to be as bad, i! not orse$ 4ur !igures are obtained by applying the Planning Commission7s o n original de!inition o! po"erty line$ 8i"en the rapidly rising cost o! pri"atised health care, education and utilities 2electricity, petrol, gas3, combined ith high !ood price in!lation and e+clusion o! the ma6ority o! the actually poor !rom a!!ordable P9. grain, it is hardly surprising that the bulk o! the population is getting more impo"erished, and its nutritional le"el is declining !aster than be!ore$ :hat is the basic problem ith the Planning Commission7s method hich produces its lo and necessarily declining estimates, regardless o! ground reality; The Commission in practice ga"e up its o n de!inition o! the po"erty line hich as applied only once < to get the 1*%3#%, estimate$ A!ter that, it has ne"er looked o"er the ne+t ,0 years e"en once !or deri"ing po"erty lines at the actual current spending le"el, hich ill allo the population to maintain the same standard o! li"ing in terms o! nutrition a!ter meeting all non#!ood costs < e"en though these data ha"e been a"ailable in e"ery !i"e#yearly 5.. sur"ey$ The Commission instead simply applied price indices to bring !or ard the base year monthly po"erty lines o! 's ,* rural and 's$&) urban in 1*%3#%,$ The Tendulkar committee did not change this aspect= it merely

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[MLL] The dishonesty in counting the poor: Utsa Patnaik

altered the speci!ic inde+$ Price inde+ation does not capture the actual rise in the cost o! li"ing o"er long periods$ Those doing the po"erty estimates ould be the !irst to protest i! their o n salaries ere inde+ed only through dearness allo ance$ A !airly high le"el go"ernment employee getting 's$1,000 a month in 1*%3#%, ould get 's$1(,000 a month today i! the salary as only inde+ed$ The !act that inde+ing does not capture the actual rise in the cost o! li"ing is recognised by the go"ernment itsel! by appointing decadal Pay Commissions hich push up the entire structure o! salaries < an employee in the same position today gets not 's$1(,000 but a !our times higher salary o! o"er 's$%0,000$ >et those doing po"erty estimates continue to maintain the !iction that the same standard o! li"ing can be accessed by the poor by merely inde+ing the original po"erty line, and they ne"er mention the se"erely lo ered nutritional access at their po"erty lines hich, by no , are destitution lines$ :orsening depri"ation The !act is that o!!icial po"erty lines gi"e command o"er time to a lo er and lo er standard o! li"ing$ :ith a steadily lo ered standard, the po"erty !igures ill al ays sho apparent impro"ement e"en hen actual depri"ation is orsening$ A school child kno s that i! last year7s percentage o! students passing the annual e+amination is to be compared to this year7s percentage, the pass mark should be the same$ The school principal cannot /uietly lo er the pass mark ithout in!orming the public, say !rom &0 out o! hundred last year to ,0 this year, and then claim that the school7s per!ormance has impro"ed because (0 per cent o! students are recorded as ?passed7 this year at the clandestinely lo ered pass mark, compared to %& per cent o! students last year$ 0!, at the same pass mark o! &0, e !ind that %0 per cent o! students ha"e passed this year, e are 6usti!ied in saying that the per!ormance, !ar !rom impro"ing, has orsened$ 0! the school is allo ed to continue ith its rong method, and lo er the pass mark !urther ne+t year, and again the ne+t year, so ad in!initum, it is e"entually bound to record 100 per cent pass and -ero !ailure$ The case is e+actly the same ith the o!!icial po"erty lines as ith the pass mark: the po"erty lines ha"e been lo ered continuously belo the standard o"er a "ery long period o! ,0 years$ ?Po"erty7 so measured is bound to disappear !rom 0ndia e"en though in reality it may be "ery high and orsening o"er time$ The Commission7s monthly po"erty line !or urban 9elhi state in 200*#10 is 's$10,0 < but a consumer spending this much could a!!ord !ood that ga"e only 1,00 calories a day a!ter meeting all other !ast rising e+penses$ The correct po"erty line is 's$&,000 !or accessing 2100 calories, and a staggering *0 per cent o! people ha"e been pushed belo this, compared to &% per cent belo the correct po"erty line o! 's$11&0 in 200,#0&$ 8i"en the "ery high rate o! !ood price in!lation plus the rising cost o! pri"atised medical care and utilities, it is not surprising that people are being !orced to cut back on !ood, and the a"erage calorie intake in urban 9elhi has !allen to an all#time lo o! 1%&)$ :hile a high#"isibility minority o! households ith stable incomes is able to hire#purchase multiple cars per household and en6oy other durable goods, the "ast orking underclass hich is in"isible to the rich is struggling to sur"i"e$ @i!ty !i"e per cent o! the urban population cannot access e"en 1(00 calories today, compared to less than a /uarter in that position a mere !i"e years earlier$ :hy, it may be asked, do the highly trained economists in the Commission ignore reality and continue ith their incorrect method; .urely they can see as e do, that their 's$10,0 po"erty line gi"es access to a bare#sur"i"al 1,00 calories$ Part o! the ans er is that the rami!ications o! using the rong method e+tend globally, !or the

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[MLL] The dishonesty in counting the poor: Utsa Patnaik

:orld 1ank economists ha"e, !or decades, based their po"erty estimates on the local currency o!!icial po"erty lines o! de"eloping countries, including 0ndia$ The :orld 1ank claim o! po"erty decline in Asia is e/ually spurious$ 0n reality, under the regime o! poor employment gro th and high !ood price in!lation, po"erty has been rising$ To admit this ould mean that the entire imposing#looking global po"erty estimation structure, employing hundreds o! economists busy churning out rong !igures, ould come crashing do n like a rotten termite#eaten house$ The rest o! the ans er is that since the method automatically produces numbers sho ing spurious po"erty decline, it is con"enient !or arguing that globalisation and neo#liberal policies are bene!icial !or people$ Truth ill al ays out, ho e"er$ .ource: The Aindu BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB Car+ist#Deninist#Dist mailing list Car+ist#Deninist#DistEgreenhouse$economics$utah$edu To change your options or unsubscribe go to: http:FFgreenhouse$economics$utah$eduFmailmanFlistin!oFmar+ist#leninist#list

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