Thursday, March 22, 2012

POVERTY NUMBERS - GOVERNMENT SCHEMES LINKED


Poverty numbers, govt schemes linked


NEW DELHI: The poverty line is not just a statistical exercise. The Centre uses it to decide access to social security benefits. Pension schemes for the old, widows and economically disadvantaged disabled provide Rs 11 a day for rural beneficiaries and Rs 17 a day in urban areas. That not even Rs 22 and Rs 28 Planning Commission feels are subsistence expenses.

The consequence of such cut offs is that in the case of old age pension (Indira Gandhi National Old Age Pension Scheme or IGNOAPS) of the 81 lakh eligible poor over the age of 60 most may not qualify. This is so if you accept the abysmal low poverty line figures Planning Commission has now produced at face value.

Under the scheme old age people below the poverty line are paid Rs 200 per month as pension. But the restrictions imposed by the old poverty line ensure that if any poor person over the age 60 who spends more than Rs 11 in rural India per day or Rs 17 per day in towns is not eligible.

This is how the planning commission poverty line acts to cut off or include people in the social security schemes for the poor.

The states undertake detailed surveys to identify the poor based on a list of parameters. Once identified these people are given BPL (Below Poverty Line) cards. Ideally all those who have been identified as BPL should then be provided benefits under schemes meant for the poor. But here lies the catch. The Planning Commission steps in. It undertakes a statistical exercise sitting in Delhi to calculate the percentage of people it considers poor in each state. It decides a certain minimum monthly expenditure per person as a cut off. Anyone spending above this it decides cannot be declared poor.

It then tells the state government that regardless of the number of poor it has identified, it will only give central funds for the percentage it considers poor based on its statistics. If the state governments want to extend the benefit to those beyond its cut off they can do so out of their own pocket. This is exactly what has happened with the pension schemes.

The Supreme Court food commissioners 9th report notes: "the Government of India uses the poverty ratio of 28 per cent (based on the Rs 11 and Rs 17 poverty line), instead of the earlier 36 per cent, in making the allocations under this (old age pension) scheme". This is despite the fact that the 36% cut off has been accepted for distributing food grains under PDS based on Supreme Court orders.

Based on these old and extremely low statistical poverty lines, the SC commissioners note that in 2006 the scheme was extended only to 1.28 crore people. If the government had updated the poverty percentage to 36% the Centre would have been required to provide assistance for 1.86 crore people - only 68.7% of the poor and old those eligible actually get central support.

Today, if one was to take the current population levels as per the latest census and latest planning commission poverty line cut offs, roughly 2.28 crore people are eligible for the scheme. As per the latest government records only 1.46 crore old age people benefit from the scheme at the moment because of this artificial cut off imposed by the Union government.

The old age pension scheme is just one of the numerous schemes where the planning commission's poverty line is used as criteria to decide the number of beneficiaries the Central government will support in the states regardless of the poor actually identified. This is why the poverty line matters and is not just a debatwing point for economists.
--
V.RAGHAVENDRA RAO,
20, DESCANSO, APRT 1321,
SAN  JOSE,
CALIFORNIA - 95134. USA.
518-261-7075

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