Is Government’s Data on Poverty in India Acceptable?

Is Government’s Data on Poverty in India Acceptable?
February2007

By Abraham M. George

The World Bank's definition of the poverty line for developing countries like India is US$1 per day/person or US $365 per year. According to the Indian government, poverty line is based on the cost of consuming certain number of calories in food intake -- for the urban areas it is Rs.296 per month and for rural areas it is Rs.276 per month. That works out to less than Rs.10 per day. Based on this measure, the government claims that less than 29 percent of the national population is poor.

It is hard to believe that anyone can live on Rs.10 per day ($0.22) and claim to be not poor. My personal observation of the population we serve in the 17 villages of Hosur Taluk in Tamil Nadu has convinced me that a great majority are indeed poor by any reasonable standard. Without arguing about at what income level poverty should be defined, our foundation decided to survey the four villages close to our projects at different income levels. This house-to-house survey by our social workers was conducted in January-February 2007. The results are as follows:

Field survey of family income of 4 villages in Hosur Taluk, Tamil Nad
January 2007
Sl. No	Village Name	Deveerapalli	Baliganapalli	Alur	Ganagondapalli	Total
1	Population	964	618	373	376	2331
2	No. of Families	205	135	84	102	526
3	Avg. members/family	4.70	4.58	4.44	3.69	4.43
4	# Families with Income
	below Rs 2000/-	21	19	11	35	86
	Percentage	10%	14%	13%	34%	16%
5	# Families with Income
	below Rs 3000/-	80	57	27	44	208
	Percentage	39%	42%	32%	43%	40%
6	# Families with Income
	below Rs 5000/-	164	100	53	72	389
	Percentage	80%	74%	63%	71%	74%
7	# Families with Income
	below Rs 6000/-	176	107	70	83	436
	Percentage	86%	79%	83%	81%	83%

Note:

At Rs. 45/$ and 4.43 members per family, average income per person is as follows:

Family Income	Individual Income/month	Individual Income	Individual Income
Per Month	(Rs.)	Per Day (Rs)	Per Day ($)
Rs. 2000	451	15	$0.33
Rs. 3000	677	23	$0.50
Rs. 5000	1129	38	$0.84
Rs. 6000	1354	45	$1.00

The above data shows that 83 percent of the population is below the World Bank’s definition for poverty at $1 per day. However, as per the government’s definition of poverty at $0.22 per day, less than 16 percent of the population is poor – a far better scenario than the national average of 29 percent. This significant difference can be explained by the fact that Tamil Nadu is a more prosperous state than most others. (Note that the four villages surveyed are only 40 km from Bangalore, the technology center of India, and 15 km from Hosur, one of the industrial cities in South India).

However, if 83 percent of the population in the same four Tamil Nadu villages is below $1 per day, it is very likely that a higher percentage of the nation’s population is poor by the same definition.

This blog does not attempt to define the income level at which poverty should be defined. The World Bank has set those levels at $1 and $2 respectively as per its narrow and broad definitions. Successive national governments in India have defined poverty very differently, and have achieved a lower level of poverty in India.