Minimum wages: Economists reject official poverty definition

A number of prominent economists have rejected the concept of a daily earning of Rs 32 determining where to draw the poverty line separating the poor from the not-so-poor. They have warned against linking such demarcations on poverty with basic entitlements.

Close to 30 economists, including Yoginder K Alagh, Jayati Ghosh, G S Bhalla, Ashok Mitra and Madhura Swaminathan, have in a signed statement said the only way forward is to provide universal food security, not create artificial boundaries to determine poverty and to target only those who fall within that boundary.

“We do not consider the official national poverty lines set by the Planning Commission, at Rs 32 and Rs 26 per capita per day for urban and rural areas, respectively, to be acceptable benchmarks to measure the extent of poverty in India,” they said.

The thrust of their statement was that poverty estimates and food entitlements should not be linked.

“We strongly believe it is unacceptable and counter-productive to link the official poverty estimates to basic entitlements of the people, especially access to food,” they said.

They underlined the fact that under-nutrition was more widespread than income poverty and indicators for one cannot guide policies regarding the other.

“Official surveys of nutritional intakes and outcomes indicate that under-nutrition is much more widespread than income poverty, however defined.

It is also widely recognised that the targeted Public Distribution System introduced since 1997 has done more harm than good, by creating divisions even among the poor and has led to massive errors of exclusion.

Recent evidence clearly establishes that states which have moved towards near-universalisation of the PDS have performed much better in increasing offtake and reducing leakages,’’ the statement said .

They called for restoration of the universal PDS, it was the best way forward in combating hunger and poverty.

“This is not only feasible within the available fiscal space of the Union government but must be a policy priority in the backdrop of high and persistent food price inflation,’’ the statement said.

The signatories included Ashok Mitra, former finance minister of West Bengal; Amiya Kumar Bagchi, director, Institute of Development Studies, Kolkata; S K Thorat, chairman, Indian Council of Social Science Research and former head of the University Grants Commission, Prabhat Patnaik, professor at Jawaharlal Nehru University, Delhi; Atul Sarma, member, Finance Commission; G S Bhalla, former member, Planning Commission; Yoginder K Alagh, former minister of power and planning, Government of India and chairman of the 1977 Task Force on Poverty Estimation; S Subramanian, professor, Madras Institute of Development Studies; S Mahendra Dev, director, Indira Gandhi Institute for Development Research, Mumbai; R S Deshpande, director, Institute for Social and Economic Change, Bangalore; Madhura Swaminathan, professor, Indian Statistical Institute, Kolkata and Jayati Ghosh, professor, Jawaharlal Nehru University, Delhi.