TWO reports, World Bank and the Asian Development Bank have come out last fortnight that speak about the increasing poverty levels in India. They clearly indicate that the neo liberal model in operation since 1991 has failed to remove the ugly blot of poverty on the face of ‘Socialist Republic of India’.

This is most evident when we study absolute numbers. The number of people living below a dollar[ Rs 40] a day is down from 296 million in 1981 to 267 million people in 2005. However, the number of poor below $1.25 a day has increased from 421 million in 1981 to 456 million in 2005.

India is home to roughly one-third of all poor people in the world. It also has a higher proportion of its population living on less than $2 per [Rs 80] a day than even sub-Saharan Africa.

That is the sobering news coming out of the World Bank's latest estimates on global poverty. The fine print of the estimates also shows that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005, the time of high growth under the neo liberal model. Economic reforms, which started in 1991, have failed to reduce poverty at the promised faster rate.

India has had some success in reducing the number of the poorest of its poor - those living on less than a dollar a day – there are still a huge number of people living just above this line of deprivation. This is most evident when we study absolute numbers. The number of people living below a dollar a day is down from 296 million in 1981 to 267 million people in 2005. However, the number of poor below $1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This the biggest challenge facing India today.

One wonders why should there be huge difference between World Bank figures and the Government of India’s own poverty estimates. One explanation is that this difference stems from the use of different poverty lines. To assess global poverty on comparable terms,  world bank we use an average of the national poverty lines of the world’s 15 poorest countries to determine the international poverty line at $ 1.25 per day at 2005 PPP prices. India, on the other hand, measures its poverty according to its own national poverty line which, in 2005 PPP, translates to $ 1.02 per day. As the two poverty lines are pegged at different levels, the number of people living below them is also different.

World Bank asserts that that poverty reduction in India has not been commensurate with its spectacular growth of recent. In order to improve the lives of a greater number of its poor, India will also have to reduce those basic inequalities – lack of access to education, healthcare and opportunities - that prevent poor people from participating in the growth process.

India’s poverty has declined by 19% between 1990 and 2005 as against 38% globally. The World Bank has been using the “a dollar a day” yardstick since it produced the first set of global poverty estimates in the 1990 World Development Report: Poverty. This current revision raising the international poverty benchmark to $ 1.25 a day was carried out in light of improved data on the cost of living in developing countries, which was found to be higher than earlier estimated. Previous estimates based on the 1993 PPPs and the $1.08 a day poverty line at 1993 prices yield a poverty rate of 34 percent for India in 2005, as compared to 42 percent for the $1.25 line using the 2005 PPPs.

Poor governance, high rate of corruption and communal divides besides unprincipled politics has made the life of aam aadmi more miserably than any World Bank or Asia Development Bank report or even the claims of the UPA government would show.

BACK