Redefining Poverty Line – Basic Needs Approach

Redefining Poverty Line – Basic Needs Approach

Mohan Guruswamy and Ronald Joseph Abrabhạm of the Centre for Policy Alternatives, New Delhi, have made the following components of basic human needs to arrive at a new poverty line for India which is claimed to be one of the fastest developing economies of the world.

Nutritional Norms and Cost involved

Based on the recommendations of the National Institute of Nutrition (NIN) under the aegis of the Indian Council of Medical Research, it is highly important that a balanced diet be provided so as the prevent underweight among children under age 5. It may also be observed that in China, only 10 per cent of children are underweight and 11 per cent of the total population is undernourished during 2000-02. Obviously, India is lagging behind China in nutritional status. Mohan Guruswamy has made an effort to determine the cost of a balanced nutritious diet for an average Indian to be Rs. 573 person.

Expenditure on Health

India spends only 1.3 per cent of GDP on the provision of public health, but the private expenditure on health is 4.8 per cent of GDP in 2002. Since according to the Health Ministry; barely 20 per cent of the Indian population is covered by public healthcare, the poor are forced to take recourse to the private sector. The ‘Universal Insurance Scheme’ is targeted to meet the needs of the poor to pay annually Rs. 365 per person and an individual can get insured for all impatient medical care upto a sum of Rs. 30,000. This implies that Rs. 365 per annum or Rs. 30 per month is the cost of health expenditure for the poor in India. Guruswamy includes a sum of Rs. 30 per person per month as the legitimate expenditure for obtaining healthcare.

Expenditure on Clothing

In fact, the clothing requirements of children, men and women necessitate different norms for clothing. Similarly, weather conditions necessitate different norms for summer and winter. In the estimate prepared by Guruswamy, seasonal requirements have been disregarded for the sake of simplicity. The clothing requirements have been calculated at Rs. 207 per person per annum or Rs. 17 per month.

Amor Consumption

On the basis of the minimum needs approach, per capita monthly expenditure on electricity has been calculated as Rs. 175 per month per family. Assuming a norm of 5 members of the family, this works out to be Rs. 35″ per person family, this works out to be Rs. 35 per person. The monthly per rosene has been calculated at Rs. 20 per capita per month. Thus, the total per capita monthly energy requirements entail a .expenditure of Rs. 55 – for electricity consumption Rs. 35 and for cooking fuel Rs. 20.

Miscellaneous Expenditure

Includes cost on travel, purchase of books and stationery for school-going children, expenditure on certain social ceremonies like birth, death or festivals, etc, purchase of consumer goods, furniture, fixtures for family needs etc., it is expected that miscellaneous expenditure works out at Rş. 820 per family per month or Rs. 164 per capita. These calculations are based on the basic needs approach at minimum levels. The purpose is not to provide only for subsistence, but to move towards a more humane level of life.

Summing up, the minimum costs on the assumption of the basic needs approach work out to be Rs. 840 per month or Rs. 4,200 per month per family (balanced nutritious diet Rs. 573, health insurance expenditure rs. 30, clothing Rs. 17, energy consumption Rs. 55 and miscellaneous expenditure Rs. 164).

On the basis of the holistic approach regarding the poverty line inclusive of basic needs, Mohan Guruswamy has calculated that 69% of India’s population is below the poverty line i.e., over 71 crore persons. This has to be seen against the official figure of 26 per cent persons below the poverty line i.e., nearly 2.65 times. The situation in rural India is appalling with 84% of the rural population below the more holistic poverty line; it is certainly better in urban India at around 42 per cent.

World Bank on the basis of the international poverty lines at the rate of $ 1 per day has calculated in its World Development Report (2005) that in India for the year 1999-2000, people below this poverty line were of the order of 34.7% and if we use the norm of $ 2 per day, then 80% of the Indian population was below the poverty line.

The conclusion emerges from the analysis of the poverty line. Firstly, the procedure of upgrading the poverty line on the basis of price index needs a review and this should be accompanied by the norm of calorie intake. Secondly, the basis of the poverty line was decided four decades ago in 1969. For a developing economy with an aspiration of becoming a super-economic power by 2020, it is all the more. necessary to develop a basic needs approach poverty line, instead of a unidimensional poverty line based on the calorie intake of food primarily which is only a starvation line. This will entail greater effort on the part of the state to take steps so that the benefits of rapid economic growth reach, common man.

Here are the notes for the Poverty Alleviation Programmes.