India's Poverty: Decoding Complexity, Measuring Progress

The measurement of poverty in India has always been a contentious issue, fraught with challenges and complexities. In a recent study by Maitreesh Ghatak and Rishabh Kumar (referred to as G-K), the authors discuss the estimation and level of absolute poverty in India. As we explore their findings, it is important to approach this subject matter with objectivity and critical analysis. This article aims to delve deeper into the complexities of poverty measurement, assess the progress made, and shed light on the ongoing debate surrounding poverty rates in India.

Measurement Challenges:
The process of measuring poverty involves determining a consumption or income threshold below which individuals are deemed poor. However, population sizes vary, necessitating the use of poverty rates as a percentage. Additionally, inflation rates differ across urban, rural, and state regions, requiring state-specific poverty lines. Furthermore, the notion of poverty should evolve as a country develops and becomes less impoverished. These challenges underscore the need for careful consideration and expert insight in poverty measurement.

Unreleased Data and Speculation:
One of the key points of contention discussed in the study is the non-release of the 2017-18 Consumer Expenditure Survey (CES) data by the Indian government. Speculation regarding the reasons for withholding the data arose, with leaked reports suggesting significant declines in rural consumption. While some argue that the government may have withheld

the data to avoid prematurely accepting potentially flawed results, others emphasize the importance of transparency and competition among researchers to reveal the truth. Only time will tell the true nature of the 2017-18 CES data.

Improvements in Data Collection:
To enhance the understanding of changes in livelihoods, the government initiated revised consumer surveys for the years 2022-23 and 2023-24. Critics of the non-release of the 2017-18 data have already raised doubts about the poverty debate, questioning whether a resolution will ever be reached. However, the improvements in the data collection process, such as more accurate reporting through multiple household visits and refined questionnaire design, should be seen as positive steps towards obtaining reliable and comprehensive poverty estimates.

Data and Conclusions in the G-K Study:
The G-K study presents several methodological concerns that warrant scrutiny. In their analysis, they refer to an estimation based on leaked CES data, indicating a flat poverty rate of around 22% between 2011-12 and 2017-18. However, it is important to note that the 2011-12 survey included multiple methods, and the conclusion of a constant poverty rate at 22.5% post-2011-12 is incorrect. Furthermore, the authors overlook the fact that the 2017-18 survey only employed the Modified Mixed Recall Period (MMRP) method, making comparisons to other methods invalid.

Examining Poverty Trends and Political Implications:
The study raises the issue of poverty reduction

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trends during the UPA years (2004-13) and the Modi years (2014-21). According to World Bank estimates, the pace of poverty reduction was higher during the post-2013 period, regardless of the specific time frame chosen for comparison During the UPA (United Progressive Alliance) years from 2004 to 2013, India witnessed a significant decline in poverty rates. The government implemented various welfare programs and policies aimed at poverty alleviation, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which provided employment opportunities in rural areas. These efforts, combined with favorable economic conditions, contributed to a reduction in poverty levels.

In the subsequent period, under the leadership of Prime Minister Narendra Modi, the focus on poverty reduction continued. The government launched initiatives like the Pradhan Mantri Jan Dhan Yojana (financial inclusion program), Pradhan Mantri Ujjwala Yojana (providing clean cooking fuel), and the Pradhan Mantri Awas Yojana (housing for all). These programs aimed to address specific dimensions of poverty and improve the living conditions of the underprivileged.

The World Bank estimates mentioned in the study indicate that the pace of poverty reduction was higher in the post-2013 period, encompassing both the UPA and Modi years. However, it is important to note that the study does not provide a detailed breakdown of the specific poverty reduction achievements during each period or the direct

causal impact of government policies. Poverty reduction is a complex phenomenon influenced by a multitude of factors, including economic growth, social policies, and demographic changes.

Political implications surrounding poverty reduction are often a subject of debate and analysis. Governments are keen to highlight their efforts in reducing poverty to gain public support and demonstrate effective governance. Opposition parties may challenge these claims or question the effectiveness of specific policies. Poverty reduction can become a focal point during elections, with parties presenting contrasting narratives based on their ideology, track record, or proposed measures.

It is essential to approach the political implications of poverty reduction with a critical lens. While government policies and initiatives play a crucial role, long-term poverty alleviation requires sustained efforts, addressing structural inequalities, and promoting inclusive growth. Evaluating the impact of specific policies on poverty reduction requires rigorous analysis, considering factors such as data quality, counterfactual scenarios, and the complex interplay of various socio-economic factors.

In conclusion, examining poverty trends in India during the UPA and Modi years reveals that poverty reduction efforts have continued under different administrations. The pace of poverty reduction in the post-2013 period, encompassing both periods, has been estimated to be higher. However, a comprehensive assessment of poverty reduction should consider multiple factors beyond political leadership, including economic conditions, social policies, and the broader socio-economic context.