Monday, July 11, 2011

$1.25: The magic number

Statistics is perhaps the greatest form of art available to the humankind today. It can adorn harsh realities with a radiant glow, and obfuscate the going on behind the scenes with mere numbers that ultimately lead to nowhere. In this latest report, the Wall Street Journal says that India has improved its standing in the world on the count of the maximum number of residents afflicted by poverty. According to the official United Nations statistics, the benchmark for a person to be considered above poverty line (APL) is an earning of $1.25/day, or Rs 56/day according to the average exchange rate of Rs 45 being equivalent to US$1. Hence, the number of citizens below poverty line (BPL) will fall to an estimated 22% of our 1.21 billion population by the end of 2015. More of a matter of concern than rejoice, for that $1.25 will fetch you jack shit going by the inflationary pressure in our domestic markets.

Let's do some basic maths. An average person has 3 basic needs in today's world- food to eat, a shelter to live, and means to commute. Clothing can be considered a luxury, a one time expense. A basic meal of potato with rice, and an occasional serving of lentils, would alone cost somewhere close to Rs 40 per day at today's market rate for flour and vegetables. That leaves 16 bucks to be spent on shelter and transport. The savings can very understandably be considered negligible. And this after our economy has opened up post the great liberalization of 1991. The poor has climbed out of poverty on the basis of numbers, not in reality. And thus the growing concern among policy makers and economists that the rich-poor divide is increasing is well founded, though it would be appropriate to separate it from the Left-propelled paranoia about wealth redistribution, which has left West Bengal among the poorer states in the country with little industrialization. So much so, that the hapless Industry & Commerce minister of the state has imagined a novel solution to the state's woes- changing the name to push the state up the pecking order of attendance at major national forums!

A retrospective view of our situation would gain us the realization that the pre-1991 times were particularly hard on the country, but the great divide wasn't as pronounced as today because the middle class and the lower class were bedfellows nudging each other all the time. Post-liberalization, opportunities grew, so did the number of scams, and central schemes became a means to siphon off public money for private welfare. Our GDP has shown remarkable growth compared to the base years, and yes, the economy is a hotbed for foreign investments. But all lip service is of no value to the poor soul who awaits his day at the turnstile when he can walk into the APL world in actual terms. Tightening leakages in the system, as the proposed cash transfer scheme intends to do, would serve us well. At least you would be sure that the usurping is going on at the other end of the deal. Middle men would be sniffing their chances in this exercise, and the complicity of government officials in propagating corruption has reached an all time high, even with heightened vigilance in public governance. More imaginative ideas and solution are needed if we are to benefit all those who share their voting franchise with us and then leave us to enjoy the fruits of our economy.

Peepli live- one of the more realistic portrayals of our situation

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