India's New Poverty Line "Laughable"

By: EW News Desk Team   Date: 27 September 2011

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27 September 2011

 Indian Prime Minister Manmohan Singh is under immense pressure as public uproar over the country's new poverty benchmark intensifies. With the new poverty threshold guidelines, millions of Indians stand to lose their food and welfare benefits.

As part of a new food security legislation, the Planning Commission proposes a daily income threshold of Rs 32 ($0.64) for urban areas like Delhi and Mumbai and Rs 26 ($0.52) for rural areas. The World Bank's poverty line is $1.25 per day.

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In response, more than 25 top economists and academics from the world's second most populous country have submitted an open letter to the Planning Commission, denouncing the new poverty guidelines and calling for a universal public distribution system.

"It is unacceptable and counterproductive to link the official poverty estimates to basic entitlements of the people, especially access to food," read the statement.

Related: Poverty in India , India Statistics 

Yashwant Sinha, a former finance minister and Bharatiya Janata party leader called the Planning Commission's calculations "laughable" and insensitive to what is "a matter of life and death" for many poor Indians across the nation.

Deputy chairman of the Planning Commission, Montek Singh Ahluwalia, stood by his affidavit as "factually correct" and stressed that the poverty line estimates would not decide benefits or entitlements to food subsidies, which would require a separate government policy decision.

"The factual position is that this number is a per capita number … and if you're talking about a family of five, you have to multiply [this number] by about five," Ahluwalia said. 

Poverty line estimates in India are traditionally calculated by nutrition intake and results suggest that under-nutrition may be much more widespread than income poverty.

India is home to more poor people than the entire sub-Saharan Africa region. As many as 400 million Indians live on less than $2 a day. 

Related: A Tale of Two Indias With One United Goal

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