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Weekly Roundup: India and Its Numbers

   /   Mar 26th, 2012Weekly Roundup

Do India’s Numbers Add Up?

India saw new figures this week. Poverty rates have dropped since India liberalized, with states such as UP and Bihar apparently progressing.  At first, the numbers are glossy, illustrating a progressing India.  But, some are asking if these numbers are telling the true story or simply deceiving us. The Planning Commission defined poverty as those living on 28.65 Rs a day in urban areas and 22.42 Rs in rural India.  If you convert those metrics, 28.65 Rs translates into 56 cents a day and 22.42 Rs translates into a mere 44 cents.  In India, these metrics are based off of purchasing power, not income necessarily.

If these numbers are accepted, then India will have seen a significant decline in poverty.  In 2004-2005, poverty estimates were hovering near 37% and last week, the Planning Commission, responsible for this data, said 29.8% of India’s 1.2 billion people live below the poverty.   Hence, poverty is decreasing.

WashPost reports that more than 51 million people have risen out of poverty, if this data is to be believed.  However, the paper goes on to report that in some of India’s most populous states, UP and Bihar, the drop in poverty has been limited and absolute poverty may have actually increased, not decreased.

But,  last year the same Planning Commision set the poverty line at 32 Rs a day, higher than this year’s 28 Rs. a day.  So, are India’s poor really moving up the ladder or is the government simply playing with the numbers to illustrate a progressing India?

Many activists and development experts are not buying the claim of increased income.  One estimate, according to the BBC, suggests that poverty in India could actually be as high as 77%.  And bear in mind that India has seen rising costs and inflation in recent years, which would suggest that the value of the Rs. for the struggling laborer is actually dropping, leaving with him less for each Rs. earned.

Also, Times of India adds to the discussion by asking why are these numbers so important?  They are not a statistical exercise, they report.  Rather, many Indian schemes for the poor are based off of these numbers. In India, the poor are granted a BPL card (Below Poverty Line card), which makes them eligible for this welfare support.   With the new numbers, many of these people will no longer be eligible for age old pensions, ration cards, and other welfare programs.

Meanwhile, the WSJ suggests that the numbers are in line with global standards used by the World Bank where $1.25 a day is converted into purchasing power parity (in the local currency). So, according to the WSJ, the debate should not be about India’s numbers but our collective definition of poverty – is it too low?

But as poverty rates may be dropping, so is India’s growth rate according to the latest reports.  While India was flying at 9% in recent years, the latest numbers signal a drop to 6%, raising questions about the sustainability of India’s rise.  Expected to reach superpower status and pitted against the success of China, India was steamrolling ahead economically.  But, questions about income inequality, inflation, and lack of inclusivity are beginning to dominate the economic debate.  And this week’s poverty numbers are questioning the growth even more so.

The Economist offers this bit of advice to the Indian state:

For now, then, it is up to the existing lot to get India back on track. One motivation should be fear. A slower-growing India will be more financially vulnerable, poorer, full of frustrated young people and taken less seriously by the rest of the world. India’s political class will not enjoy the consequences. India is a place that has fallen out of love with reform. It needs to get the magic back.

Worthwhile Reads:

  • This Thursday marked World Water Day. Though water woes are the root cause of disease and sanitation,the Guardian looks at how UK development aid for water projects is actually decreasing.
  • UK’s Prime Minister make a visit to India to learn about “Frugal Innovation” and how such grassroots innovation can transform the public sector.
  • Is less better when it comes to humanitarian aid?  TIME contrasts Ireland with Germany.
  • Is the World Bank truly a “world” bank?  Suggestions in the Financial Times on making it a more inclusive organization.

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