Numerically Understanding the Poverty Line in India - Part 1

There is always a great deal of discussion involved when we talk about the 'Below Poverty Line' benchmark in India. The poverty estimates are often challenged by civil societies which lead to wide scale protests. A series of such protests broke out in 2002 over a fundamental question of where to draw a 'line' that clearly identifies who the real beneficiaries of the government welfare schemes for the 'poor' are? 

While government claims that the poverty is decreasing, it becomes essential that we understand the poverty indicators through numbers and actual stats and gain an insight of the situation at hand. As per the Planning Commission's poverty estimates made in 2004-5, only 28.3 per cent rural and 25.7 per cent urban in were poor. It is on these lines that makes the Tendulkar Committee (formed after National Development Council's meeting of March 2009) a  prima facie study on analysis of poverty in India. 

Until the the report was published in 2009, all previous poverty estimates in India only looked at poverty from the limited view of money required to buy food to achieve minimum calorie intake (which was fixed at 2100 calories). But Tendulkar knew that poverty is a relative concept and hence in order to draw a line there must be a thorough study of other factors that constitute it. He took a note of the evidence that post liberalization (in 1991), the poor were spending more and more on health and education, areas which were increasingly in the private sector domain. In the pre-liberalization paradigm, the state was supposed to have provided these services cheaply but that model had clearly broken down. The data from the first ever National Family Health Survey in 1993 showed the alarming rates of malnutrition and infant mortality in the country, hitherto ignored by poverty estimates.

As a result, Tendulkar, along with his team, radically overhauled the pre-existing poverty estimation methodology by incorporating health and education expenditure while calculating poverty levels. Not surprisingly, the final results showed that while India’s poverty had declined over the years yet, all along, India had under-estimated its poverty levels. According to his method, the number of the poor in India in 2004–05 rose from 27.5 per cent of the total population to 37.2 per cent. In 2011-12, Planning Commission used the Tendulkar formula to calculate BPL limit at Rs. 816 per capita per month for rural areas and Rs. 1,000 per capita per month for cities. This would mean that the persons whose consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 per capita per day in villages are not poor.

The above figures ^ would certainly fail to give a complete picture or impart efficacy without a backdrop of government welfare schemes, specially the ones aimed at meeting the food security and health issues. 

Remembering the Titans of Indian Agriculture

Over 50 years since its independence, India has made immense progress towards food security. Indian population has tripled, but food-grain production more than quadrupled: there has thus been substantial increase in available food-grain per capita.

In country such as India where still around 64% of cultivated land is dependent on monsoons, imagining the condition way back prior to the mid 1960's, when the country was struggling with droughts, famines and high dependence on international aids and imports to feed its people, is not a difficult task.

Two years of severe drought in 1965 and 1966 convinced India to reform its agricultural policy, and that India could not rely on foreign aid and foreign imports for food security.

India adopted significant policy reforms focused on the goal of foodgrain self-sufficiency. This ushered in India's Green Revolution. It began with the decision to adopt superior yielding, disease resistant wheat varieties in combination with better farming knowledge to improve productivity. The Indian state of Punjab led India's green revolution and earned itself the distinction of being the country's bread basket.

An Indian geniticist, M. S. Swaminathan, played a leading role in turning the dreams of 'Green Revolution' into reality. Swaminathan, the son of a surgeon, was educated in India and at the University of Cambridge (Ph.D., 1952) as a geneticist. During the next two decades he held a number of research and administrative positions (mostly in the Indian civil service). While working in these positions he helped introduce Mexican semidwarf wheat plants to Indian fields and helped to bring about greater acceptance of modern farming methods. 

He was highly influenced by Norman Borlaug (who is known as the Father of Green revolution). In the 1990s, several environmental writers began describing the agriculture scientist Norman Borlaug, who has died aged 95, as the saviour of "more lives than anyone in history". He was awarded Nobel peace prize of 1970 for his great contribution to the mankind. I found this very nice video on Norman's contribution to agriculture and his response to the challenges faced by farmers worldwide.

Green revolution brought about a phenomenal growth in the food grain production. A hectare of Indian wheat farms that produced an average of 0.8 tonnes in 1948, produced 4.7 tonnes of wheat in 1975 from the same land. 

By 2000, Indian farms were adopting wheat varieties capable of yielding 6 tonnes of wheat per hectare.

Tackling the Food Issue through PDS (Public Distribution System)

What is PDS (Public Distribution System)?

1. Public Distribution System (PDS) is an Indian food security system.
2. It distributes subsidized food and non-food items to India's poor.
3. Major commodities distributed: wheat, rice, sugar, and kerosene
4. A network of Public distribution shops (also known as Ration shops)
5. Food Corporation of India, a Government owned corporation, procures and maintains the Public Distribution System.
6. Under PDS scheme, each family below the poverty line is eligible for 35 kg of rice or wheat every month, while a household above the poverty line is entitled to 15 kg of food grain on a monthly basis through 5 million Fair Price Shops (FPS) across India.

Criticism:

1. Food grains not enough to meet the consumption needs of the poor
2. Inferior quality
3. Criticised for its urban bias
4. Failure to serve the poorer sections of the population effectively
5. The targeted PDS is costly 
6. Gives rise to corruption
7. The government spends Rs. 750 billion ($13.6 billion) per year, almost 1 percent of GDP, yet 21% remain undernourished.

Paradox: India has the largest stock of grain in the world besides China

The problem facing the country today is not one of shortage of food grains but of managing the surplus. Ironically, even as the godowns of the FCI are overflowing, stray cases of starvation deaths are still being reported. A civilized society in the 21st century cannot allow this to happen. Therefore, while there is need to produce adequate food grains domestically, supplementing with imports whenever required, it is also necessary to look at the food grain distribution network. The Public Distribution System (PDS) in the country facilitates the supply of food grains to the poor at a subsidized price. However, doubts have been raised about the efficacy and cost-effectiveness of the PDS, especially in the light of the growing food subsidy and food stocks. The PDS needs to be restructured and there is a need to explore the possibility of introducing innovative ideas such as smart cards, food credit/debit cards, food stamps and decentralized procurement, to eliminate hunger and make food available to the poor wherever they may be in cost-effective manner.

Challenges:

• Availability of Food
• Accessibility of Food
• Affordability of Food

There are two aspects to the paradox of overflowing godowns and vulnerable sections of society not consuming adequate food. One is the issue of not having enough purchasing power or income to buy food and the other is the access to food in terms of physical availability of food. In remote, inaccessible and backward regions both job opportunities and access to food may be constrained. In such situations, food-for-work and related schemes are necessary. These may need to be supplemented by more innovative schemes like grain banks. Community grain banks can be set up in such areas from where the needy can borrow grain in times of need and repay the grain once the crisis is over. Natural disasters such as earthquakes also create conditions in which the government must provide emergency assistance and the administration has to be alert to such situations. Finally, a minimal amount of social security must be provided to those who are old, sick or disabled and cannot take on work even if it is available. Special schemes must ensure that they do not go hungry.

Shift in consumer pattern:

The growth of aggregate demand for cereals in the country can be said to have been kept in check due to two factors — slowdown in the pace of population growth and shift in consumer preference towards non-cereals. While the changing demand patterns is one reason for the accumulation of surplus food grains, another factor is the tendency of successive governments to fix Minimum Support Prices (MSP) for paddy and wheat in excess of the levels prescribed by the Commission for Agricultural Costs and Prices (CACP). The higher MSP increased the profitability of these crops and motivated the farmers to divert their areas to these crops from coarse cereals, pulses and even oilseeds, as in the case of Punjab. This enabled the country to achieve higher output of food grains and achieve surpluses. However, the need to rethink this approach is overdue. There should be a marked incentive for growing pulses and oilseeds by increasing the MSP of these crops. The average shelf life of coarse grains is limited, making them unsuitable for long-term storage and distribution under PDS.

Andhra Pradesh Case Study:

Sources: The Hindu, Planning Commission of India (Report), Economic Times, Wiki (definitions)

Life and Dignity for the Mentally ILL

• emotional well-being : core indicator of human development
• basis for social stability
• impact of poor mental health: poverty, high unemployment, poor education, health, etc

Types: Common mental disorder, Severe Mental Disorder

Fact: Almost one million people die due to suicide every year (globally)

Govt. Initiative: National Mental Health Programme (NMHP)- 1982

Aim: accessibility of minimum mental health care for all

Approach shift: hospital based care (institutional) to community based mental health care

-majority of mental disorders do not require hospitalization and can be managed at community level.

difficulties/stigma faced by mentally ill persons- humane, patient-centric legal framework for mentally ill patients.

Changes that should be implemented:

• Removal of widely held misconceptions
• Admitted person-right to receive or  refuse visitors, phone calls, mail,etc
• Right to have treatment in one's locality (avoiding segregation/ loneliness)
• Right to protection from cruel, inhuman and degrading treatment 
• Establishment should have safe, clean with facilities for education, recreation, religious practices.
• No patient should be forced to undertake work and subject to compulsory shaving of head and wearing of uniforms.
• Mental illness may be made eligible for medical insurance coverage.
• Affordable treatment
• Government should interpret mental health services into general health care services at all levels in all health programmes.

Most Imp  ---> Society should become more empathetic towards people suffering with mental illness

                   ---> stigma attached to it should be removed through education

Sources: Press Information Bureau

Mid Day Meal- Blessing or a Curse?

Prelude:

What is the Mid Day Meal Scheme?

The Midday Meal Scheme is the school meal programme in India, started in the 1960s. It involves provision of free lunch on working days in schools.
Facts:

• Mid Day Meal is given to around 19 lakh primary and upper primary school students.
• Scheme covers around 3000 schools
• 46 centralized kitchens supply food to these schools.
• 83% samples failed to pass the quality test in 2012-13

Why do we always look at the hind side of anything? There has been so much criticism about the 'Mid Day Meal scheme' in news and debates all over the country after the Bihar Mid Day Meal tragedy broke out. Everybody seems to be bashing the political lobby for their bogus schemes.  What we fail to realize is that the policy framework is not faulty, but there are certain loopholes in the implementation of it, viz- the process of quality check.

Times of India went ahead to state that:

"Make teachers taste midday meal before serving it to students."

Now that coming as a solution from a leading daily of this country tells something about education of the journalist who wrote it and the editor who gave it his consent.

I am not a policymaker and I'll keep myself away from an act of probing into the policy formulations and its nitty-gritty. Nevertheless , I'd like to bring certain facts to light that will help in developing a neutral perspective of things. Since 1960's, mid day meal has brought about a tremendous change in various aspects of nutrition and the associated benefits of women empowerment through employment,  improved socialization among children belonging to all castes, addressing malnutrition and the most desired objective of increase in the enrollments of students. Despite the success of the program, child hunger as a problem persists in India. According to current statistics, 42.5% of the children under 5 are underweight. 

Coming back to the Bihar issue, we need to understand where the problem lies in order to eradicate it. PK Shahi, the state education minister, said that a "preliminary investigation" indicated that the food was contaminated with an organophosphate. One senior education official stated: "We suspect it to be poisoning caused by insecticides in vegetable or rice."

Whatever the reason may be, there can be no denying of the fact that there have been unfair practices in the Distribution of contract of the Mid Day Meal. Moreover, a major chunk of the huge funds that is allocated to various states is returned back to the center after it lies idle in banks for years. Instead of getting carried away by the ongoing blame-game, we need to work towards bridging the gap between the legislative sanctions, executive orders and the actual implementation of the aforementioned at the grass root level by the school fraternity so that life and health of our children is ensured.

PS: Here's a nice video by FirstPost that I'd like to share. It provides a very balanced outlook of the efficacy and the challenges of the scheme:

Sources:

The Hindu

Wiki

Times of India

Bridging the soldier scholar divide : Project INDU

Indian National Defence University (INDU) is a proposed university of defence of the Government of India which will be established at Binola in Gurgaon, Haryana.

• The idea of defence university was mooted first in 1967 and then in 1980 by Sethna Committee.
• Issue came to limelight after Kargil war of 1999
• Union govt approved setting up of INDU in 2010
• INDU will spread across 200 acres and will be acquired by Ministry of Defence for Rs 300 crore.
• It will be first of its kind, fully autonomous Central defence University to be constituted by an act of parliament
• Would have both military and civilian faculty in ratio 1:1
• It will be fully operational by 2020

Proposed Courses:

war gaming and simulation, neighborhood studies, counter insurgency and counter terrorism, Chinese studies, evaluation of strategic thought, international security issues, maritime security studies, Eurasian studies, South East Asian studies, material acquisition, joint logistics, and national security strategy in peace and war.

References:

Wiki

Chronicle-July edition

Rupee O Rupee, why are you Falling (failing)?

Reason:

The basic concept is very simple. Price falls when the demand is less. US is witnessing economic recovery => Strong demand of USD. Overseas investors pulled out money from Indian debt market and equities in less than a month due to weakness in Rupee is making things worse (over $5 billion in less than a month)

Impact:

• Costly imports
• Costlier crude oil (we're paying in Dollars)
• => Higher fuel prices
• => Inflation (fuel affects so many commodities)
• => Costlier food, gadgets, FMCG goods (fuel, imported raw material) foreign education / vacation, etc

Whats Indian Government doing?

Increasing FDI (=trying to get more $)

=> trying to bring 100% FDI in telecom, 49% in defence production from 26% etc

Other side effects:

• CAD hit a record 4.8 % of GDP in the financial year ended March 31, 2013.
• We import 80 per cent of our crude requirements and so dollars will anyhow go out of the country irrespective of whatever arrangement the RBI makes

Good News for Indian IT sector:

• Most of their money comes from exports
• About 66% of India's IT and IT-enabled service revenues come from exports
• 3 million people employed in Indian IT companies

Souces: 

Hindustan times

Economic Times

Investopedia