Not Such A Straight Poverty Line
Mihir Shah has defended the poverty line recommended by the Suresh Tendulkar Committee in 2009 in his article in The Hindu (editorial page, “Understanding the Poverty Line”, August 5, 2013). Mr. Shah makes two claims. First, he argues that “Tendulkar [...] computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to one U.S. dollar per person per day, which was the internationally accepted poverty line at that time.” Here, he tells readers not to get agitated by the level of the poverty line, as India is only following the global practice. Second, he assures that “there is no value judgment being made about the adequacy of this amount of money for any meaningful purpose.” Mr. Shah assures readers that the purpose of the poverty line is purely academic and has nothing to do with people’s hunger or malnourishment.
In making these two claims, among others, he derides the “great shrillness” around the poverty line debate. He tells us that “understanding and wisdom have flowed in an inverse proportion,” and that commentators “have shown complete lack of understanding.” As a result, Mr. Shah says that we have a “ridiculous tragedy of errors on all sides”!
Both the claims of Mr. Shah are completely wrong. What are the facts?
There is absolutely no methodological relationship between the Tendulkar poverty line and the one dollar poverty line. The new method suggested by Tendulkar was the following: we take the all-India urban poverty line as the basis for estimating every other poverty line. This urban poverty line continues to be estimated by: (a) the same old calorie norm; (b) updating Rs.56.64 (i.e., the per capita per month expenditure at 1973-74 prices, “adequate” to buy 2,100 calories per day) for inflation; and (c) with no regard for temporal changes in the consumption basket. From this national urban poverty line, we try to estimate what it takes for people in urban...