COMMUNITY 20 April 13, 2012 LEARN TO DRIVE TODAY!
Health & Dental Insurance For Individuals & Families For Texas
Hari P. Garg, Ph. D [Agent] Toll Free: 1-800-732-0360 Email: gargagency@aol.com
Want to Buy Your Dream Home? Want to Save Money on Your Existing Home? TIME IS NOW!! RATES ARE LOW!!
CALL Krishnan @ 713-579-7222 email – krishnan@sutherlandmortgage.com Visit us at www.sutherlandmortgage.com
Call Sutherland Mortgage
Sutherland Mortgage Services Inc. Krishnan Swaminathan
3701 Briarpark Dr. Ste. 150 Houston, TX 77042 NMLS #20770
NMLS # 9891
Low Rates • New Home Purchase • Refinance or Cash Out Refinance • FHA/ Conventional/ Reverse Mortgage • Over 10 years of lending experience
INDIA
What Does India’s Poverty Line Actually Measure?
BY NIKHILA GILL & VIVEK DEHEJIA NEW DELHI (NYT): In India, even something as seemingly innocuous as a statistic can become a politically loaded football. So it was with the Indian Planning Commission’s recently released poverty measurements, which showed a big drop. Immediately, the critics pounced, accusing the commission of changing the goalposts. One blogger even suggested that the government had “fudged” the numbers. Those claims turned out to be overblown. The Planning Commission could certainly have done a better job in explaining its new methodology, but it didn’t cook the books. Given the furor, we at India Ink thought it would make sense to take a step back and figure out what the poverty line is actually supposed to measure. At its most basic, the poverty line is a statistical exercise, an attempt to track poverty over time and across states. It can be used to assess progress in the fight against poverty, a central plank of Indian governments’ economic policies since independence from British rule in 1947, as well as of multilateral donors such as the World Bank and bilateral lenders like U.S.A.I.D. This is how Surjit Bhalla, an economist and investment adviser, sees things. He is bemused by the fuss. “It is staggering that this exercise should be the subject of any debate at all,” he told us. “The important thing is to look at the section of population under the poverty line and how it has changed.” The purpose of the poverty line, in his view, should be to gauge how many people have crossed it. If it’s merely a way to compare progress over time and space, it doesn’t much matter where the poverty line is drawn. Statisticians have a fancy name for this, “first-order stochastic dominance.” In plain English, it means that, no matter where you draw the line, Gujarat, for instance, will have a lower percentage of its people in poverty than Uttar Pradesh. So why the controversy? It’s because, over the years, the poverty line has increasingly been conceptualized as a “cut-off” – in other words, as an eligibility criterion for the government’s entitlementbased social welfare schemes. If you fall below it, you’re entitled to support; if you’re above it, you’re not. That’s where it gets confusing, and politicized. Now, where you set the cut-off isn’t just a statistical artifact, but an important policy decision, that affects whether millions of people are eligible, or not, for government support. If it’s set too high, and so most people in Gujarat are counted as poor along with just about everyone in Uttar Pradesh, the poverty line can’t be used to help direct government resources. As Arvind Panagariya, an international affairs professor at Columbia University, put it to us: “If the idea is to track the destitute and the poverty line is raised to 100 rupees [about $2] a day, who are we tracking? The top decile? Where’s the
A beggar asks for alms, sitting along the pathway leading to the Haji Ali mosque in Mumbai on Feb. 24. Photo: Danish Siddiqui/Reuters
logic in that?” In other words, what’s the point of a poverty line that counts most people as poor? Freighted with the added baggage of being an instrument of social policy, it becomes more important than ever to determine if the Planning Commission’s poverty line is sensible. Mr. Panagariya has no doubts on this score. “India’s is a sensible poverty line. There is no hidden agenda. The Planning Commission is just doing its job,” he said. To be sure, there are technical debates over whether the Planning Commission’s methodology accurately captures the consumption of the poor. Many economists are of the view that the surveys the government relies on underestimate a typical household’s consumption by about 50 percent. In other words, the poverty line of 29 rupees corresponds to an actual consumption level of 60 rupees, which basically matches the World Bank’s poverty line of $1.25 a day. While that sounds modest, it implies, if you do the math, that a household of five consumes about $2,000 a year. Abhijit Banerjee, an economics professor at M.I.T. and co-author of the award-winning book “Poor Economics,” isn’t quite as sanguine. He argues that the survey data doesn’t include consumption of the rich, whereas gross domestic product, as measured conventionally by the national accounts, does. He believes that the 50 percent claim may be an exaggeration and paints too rosy a picture of the poor’s actual consumption. He does concede that there
must be something wrong with the survey numbers, because the share of GDP of the households surveyed has been dropping every year, and is headed toward zero, which is implausible. The true figure, he suggests, lies somewhere in between, and we shouldn’t go to the “other extreme” of 50 percent. If you find all of this confusing, you’re not alone. The branch of economics concerned with measurement is one of the most esoteric in the field, and taps into a statistics literature beyond the grasp of all except the most technically savvy. But the bottom line is: however you measure the poverty line, 30 percent of India’s population, or 350 million people, still live below it. So, is this statistical debate over whether the poverty line is too high or too low missing the real issue? Jean Drèze, an economist and former member of the NationalAdvisory Council, certainly thinks so. “What is really shocking is not that the official poverty line is abysmally low, but that even with that abysmal benchmark, so many people are below it,” he told us. “The belated discovery that it is impossible to have a dignified life on the official poverty line draws our attention to the appalling living conditions of the Indian poor.” Taking a position diametrically opposed to Mr. Bhalla and Mr. Panagariya, Mr. Drèze argues, “The message about the terrifying nature of ‘hidden poverty’ in India has been somewhat lost in the din of the recent debate.” It seems that, when it comes to the emotive issue of measuring poverty and what it means, a number can’t just be a number.
Help Wanted Full Time Sales Girls
for Jewelry Store
Please Contact:
Call: 713-789-7575
INDO AMERICAN NEWS • FRIDAY, APRIL 13 , 2012 • ONLINE EDITION: WWW.INDOAMERICAN-NEWS.COM