We shouldn’t let Indian poverty turn into a great eternal mystery

Source: The post is based on the article “We shouldn’t let Indian poverty turn into a great eternal mystery” published in Live Mint on 5^th May 2023.

Syllabus: GS 3 – Poverty

Relevance: concerns associated with estimation of poverty.

News: There have been many private estimates on poverty in India but there has been no official estimate since 2011-12. Due to which, there is a wide variation in the estimates of poverty by private entities.

What are some of the differences or variations in the private estimates on poverty?

For measuring poverty, except the World Bank, all others use some estimate of consumption expenditure from the National Statistical Office (NSO).

Out of those using consumption expenditure from the NSO, only the poverty estimates by S. Subramanian of 2017-18 is comparable to the 2011-12 official poverty estimates.

As per the estimates, it suggests a rise in poverty level between 2011-12 and 2017-18.

On the other hand, Bhalla uses a modified version of consumption expenditure adjusted to national accounts, which leads them to conclude that poverty has declined.

Like these there are variations in measuring poverty because private estimators are using different data for measuring.

Must Read: There is no debate: There has been a persistent decline in poverty in India

What are other concerns with measuring poverty?

India has been a pioneer in poverty measurement and has a model for several other developing countries. However, this perception has changed because there are no official poverty estimates available after 2011-12.

Moreover, the government conducted consumption expenditure in 2017-18. This was the only comparable data set by which poverty could have been estimated but the survey was discarded without giving any particular reason.

However, the probable reason for discarding might be that it showed a rise in the poverty level.

A similar problem is with the poverty line estimation. Even this has not yet been decided by the government.

However, there is a consumption expenditure survey being undertaken for updating the national accounts and inflation indices.

What is the concern with the consumption expenditure survey?

The methodology that has been adopted in the survey for measuring poverty is new and has not been used elsewhere.

The survey may provide fresh estimates of consumption expenditure. However, the absence of a comparable survey means it won’t help answer what happened to poverty after 2011-12.

Moreover, in such a scenario where comparable data is not available, carrying out a new survey is always preceded by pilot surveys and their results are released for public discussion.

However, there is no information on whether a pilot survey was conducted in this case.

What is the way ahead?

Official poverty estimates and poverty lines from the government have been crucial in highlighting the living conditions of the poor and the effectiveness of government policy.

Poverty estimates were key to designing interventions, allocating resources across states and analysing their effectiveness.

Therefore, the government not conducting a survey is a setback to the scholarly work on the measurement and determinants of poverty and also for policymaking.