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Good news on poverty

Last Updated: Sat, Jul 20, 2013 07:20 hrs
Suresh Tendulkar

The latest numbers on poverty levels are dramatic; they show that the number of people below the poverty line (as defined by the late economist Suresh Tendulkar) has shrunk from 37 per cent of the population to 22 per cent, in the seven years to 2011-12. This is an unprecedented rate of fall in poverty levels; some 40 per cent of those who were poor in 2004-05 were no longer poor seven years later. Compare that with any other previous seven-year period, and 2005-12 would stand out; the rate of drop used to range from infinitesimal to barely half a percentage point in a year, compared to four times that rate in the latest seven years. Raise a cheer - but for what and whom?



People will quarrel about the reasons for the dramatic change. Professional naysayers who don't like good news will even question the numbers. More rational people will argue that the dramatic increase in growth rates has done the trick. Others will say the "aam aadmi" thrust given to government spending has made the difference - not just the rural employment guarantee programme but also the doubling of the quantity of subsidised food distributed through the public supply system. Or, it could be the result of the sharp increase in food procurement prices (which have put money in farmers' hands), and the consequential increase recorded in rural wage levels. The ideologically uncommitted might argue that the end result must be the combined result of all of the above.

Still, it is as well to take note of the contrary numbers coming out at different points of time, from different sources. For instance, in the decade to 2011, even though the rural population grew by 12 per cent, the number of cultivators actually dropped from 127 million to 119 million. That is not primarily because more people have moved out of agriculture for, in the same decade, the number of agricultural labourers went up sharply, by an astonishing 36 per cent, from 106 million to 144 million. The only conclusion can be that some people who used to own land sold out and joined the ranks of landless labour.

If true, this would be because farms have been getting smaller in size as a result of subdivision of holdings. The average size of a holding shrank as much as 40 per cent over 30 years, from 1.84 hectares to 1.16 hectares. By 2011, 85 per cent of all farm holdings had become smaller than two hectares, with the number of these small and marginal holdings growing from 66 million in 1981 to 117 million in 2011. It would be logical to assume that many holdings became too marginal to be viable, and were sold. Leftists will talk of a growing rural proletariat. Yet, we also have a sharp drop in poverty levels in the countryside. Perhaps agricultural productivity levels have shot up, and wage increases have been substantial. Bear in mind that, as agriculture has become more diversified, the need for labour input has increased - growing vegetables requires more man-hours than growing wheat.

Another set of contradictions flows from the high levels of malnutrition, recorded by different surveys, because at the same time more and more people have been reporting that they get two square meals a day. The figures on the number of children who are underweight and/or stunted make for grim reading. But the biggest contradiction arises from the fact that the numbers on reduced poverty are based on the consumption numbers reported by the National Sample Survey - as everyone knows, NSS surveys understate the actual level of consumption, though perhaps more so in the upper income reaches.

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