Letters: Poverty of estimates

The Planning Commission has fixed the per capita income for poverty line at Rs 25 and Rs 32 a day for the rural and urban poor respectively. At these levels, one can buy just one sada dosa and one ghee sada dosa in the respective areas. The definition of poverty should no doubt take into account all the necessities of life besides food. However, while the government can provide subsidy for foodgrain, it cannot afford to do so on a large scale in respect of health, housing and so on.

Official agencies and academics may continue to estimate the extent of poverty for the purpose of planning for development. The immediate need is, however, for a working definition to take care of food security. In this context, the government may consider the exemption limit for income tax as the poverty line. It is now Rs 1.8 lakh a year for an individual. It can be the norm for fixing the household poverty-line. An average family in India consists of five people. Thus, the per capita income of Rs 100 a day may define the poverty line. The acceptance of the estimate will raise the level of food subsidy. It may be compared with the existing estimates made for the Food Security Bill. There is scope for resource mobilisation to meet the additional expenditure. Think of the enormous dividends that promoters of companies are earning and they are tax free. They should be taxed as also capital gains in stocks and shares after the holding period of one year with appropriate exemption limits.

A Seshan, Mumbai

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