Congress and the "Poverty of Economics"

Let us all go to basics of this economics of poverty. 

What is Suresh Tendulkar’s formula to calculate poverty? What formula what followed before Tendulkar’s formula to calculate the poverty line?

In 1971 V.M. Dandekar and N. Rath took out a formula to calculate the poverty line in India. The Dandekar-Rath poverty  line formula that has been used since 1971 measures only the calorie content of an Indian’s diet.If it is lower than 2250 calories per person per day, the person is declared to be under the poverty line.This norm was not revised in 35 years. In 2006 a committee headed by economist Suresh Tendulkar had drawn up a new formula for assessing poverty, which it submitted to the Planning Commission. The Tendulkar Committee replaces the calorie measurement by a cost-of-living index,that is, how much money a person spends. It looks at a basket of household goods and services such as health and education. In 2009 the Tendulkar’s panel had suggested that those spending over Rs 28.65 a day in cities and Rs 22.42 a day in rural areas are not poor. These estimates had drawn a severe criticism from public given that it is nearly impossible to survive at these income levels. At that time our economist PM Dr. Manmohan Singh and SC had asked to scrap that formula and had asked Planning Commission to come out with some more realistic formula that takes inflation and some other factors into account as well. All social welfare schemes accounted for the poor are directly linked with the poverty estimates.

The new poverty line is different for different states and also different for rural and urban areas within a state. The all-India average rural poverty line is set at Rs 33.3 in urban areas and Rs 27.2 in rural areas. Mr. N C Saxena of NAC , Sonia Gandhi’s very own policy making body lashed out that even dogs and cats can’t sustain a day on this kind of money. There has been outrage from every section of society, from poor to politicians everyone has condemned over these drawn falsely calculated lines of poverty. The last survey had been done in 2009-2010. Logically the next had to be done in 2014-15. But since 2009-10 wasn't a normal year due to severe drought ,the NSSO(National Sample Survey Organization) did a large scale survey in 2011-12. Manmohan Singh’s govt(or instead Mrs Sonia Gandhi's government) drew a flak to bring out poverty estimates 3 years before schedule and that too from an outdated formula that had been junked by their own party. This clearly shows that these stats have been brought to gain a political mileage. The government has been facing a severe attack from opposition and angry citizens of our country over the numerous scams during their 9 years of rule.

One side the government is talking of Food Security bill to cover 65% of the population and the other side its ministers claim that even Rs 5 and Rs 12 can bring a good amount of food in cities like Delhi and Mumbai. This raises too many of questions in our minds.
Isn't this perplexing ? Why are we doing fudging of facts and figures? Has government even worked on basic mathematics of economy? Or are they trying to fool the nation? Why are we talking gibberish?When our nation’s  poverty has come down to meager 21% why are they talking of Food Security to cover such a large population which has too many negative impacts on our already fiscally deficit economy? Do we know that through present PDS which covers people below poverty line, only 60 percent of food grain reaches to targeted poor and BPL(Below poverty line) people and the quality of that food grain is even worse. Heavy fiscal spending schemes like MNREGA are open source to corruption and this is not a hidden fact. Aren't we opening floodgates to corruption through food security ordinance? Based on government facts do we know that around 68.7 per cent Indians live on less than $2 (Rs 120) a day. This is about the minimum wage fixed by government agencies for guaranteed work under the rural employment schemes.

I read a blog yesterday and the writer had asked a very nice question which I put up here that "Is poverty absolute or relative"?  

We need to serve the basics “Roti, Kapda aur Makaan” firstly and need not to draw an imaginary poverty line to make a fool of poor and needy.

Thanks 

Congress, Media and the story of double standards

What is this buzz all about?
When Modi says no to wear a Skull cap offered to him by a Muslim Cleric during his Sadbhavana Fast, media and all sections of society start bashing Modi for being Anti minority. Though not even a single news channel aired that actually he wore a green shawl offered by a Maulana just before that. And when an MP Shafiq-ur-Rehman Burq (BSP) says that Vande Mataram hurts his religious sentiments and walks out while the national song Vande Mataram is being played no one takes even a damn of it? Why are these double standards followed? Shouldn't we expel such a person from our parliament who doesn't respect our Nation? A comment from Modi and every section of politics and Media starts fuming while some other seasoned politician passes a more pinching remark we tend to forget that. Why our politicians and media do follow such double standards? I am not a Modi supporter or critic but I do demand that every citizen must be treated the same way.
And my only question for Mr Shafiq-ur-Rehman Burq  that when an Oscar winning music Director Mr. A.R Rahman sings Vande Mataram, gives a new dimension and popularity to our National song and doesn't have any issues with our National Song what actually are you trying to justify? I think this nation wants to get over these cheap publicity gimmicks and focus on some real issues . At least don't try to make India , country which has given you everything,feel ashamed of people like you. We Indians regard our country as our Mother and I don't think any religion teaches to disrespect our Mother.
Thanks

Hitting the bulls eye yet again

And Mr. Shakeel Ahmed has hit the bulls eye .. He has just said that Indian Mujahideen was born after the misdoings in Gujarat in 2002 .... And his next statement might be that China is infiltrating into Indian borders due to Gujarat 2002, Economy is into shambles due to Gujarat 2002, Rupee is down sliding due to Gujarat 2002 etc etc ....

Tsunami of political incorrectness

Are we seeing senseless and opportunistic politics everywhere? I think there is a tsunami of political incorrectness these days. Be it Mr. Digvijay Sing's unmindful comments after Both gaya blasts or Mr Narendra Modi's comments regarding 2002 riots or Mr Naresh Agarwal's comments regarding Rape case in Etawah recently and many more. The list goes too long. At first place the politicians give comments that are unwanted and uncalled and then an unreasonable backing from their respective parties follows .
Why are we so insensitive towards the society? 

Blasts at Bodh Gaya

After serial Blasts in Bodh Gaya the question arises if the Intelligence agencies are really intelligent? Does their job finish after generating an intelligence input? Its high time to revamp our system and provide some authority to Intelligence agencies else these blasts will keep happening and PM would keep condemning the blasts in same mode.

In my understanding when an Intelligence agency generates some input, a team having some senior members who generate this warning must coordinate with local police and see the preparations over there to prevent those blasts. 

All about food security bill - Impact analysis

Hi Friends,

Before building a consensus on Food Security Bill let us firstly get into it and look what does it say and what provisions make this bill questionable. 

It aims to provide subsidized wheat and rice to 70 percent of India’s population. When implemented, the scheme will massively broaden an existing program of providing cheap food to 218 million people. Overall, it will entitle around 80 million of India’s 1.2 billion population to subsidized food grain under the Targeted PDS (Public Distribution System). Up to 3/4th of the public in rural India and half of the population in urban India would get food grains at subsidized rates i.e. 3 Rs per kg for rice, 2 rs per kg for wheat and 1 re per kg for coarse grains. 

States like Madhya Pradesh, Chattisgarh have their own versions of Food Security laws already in place. BJP is crying foul over the way congress has brought an ordinance to get Sonia Gandhi's most ambitious project on fast track to woo the voters but they can't really complaint since Dr Raman Singh implemented a little diluted version of Food Security Bill in his state when Chattisgarh went into voting last time and it was this popular scheme only that really brought him back to the numero uno position in his state. As far as congress is concerned their stance is crystal clear - take away voters concentration from the numerous scams that UPA has been facing heat at later stage and woo them with a scheme that directly impacts their lives, which they also did in 2009 in form of farm loan waiver  which impacted 80lac farmers in AP and around 60lac farmers in UP, and both of the states brought them a game changing total of 54 seats. 

Coming directly to point I would straight away discuss the shortcomings of this bill. The biggest impact of this bill would be on pockets of central government which is already short of funds. The CAD has reached to 4.7% of GDP and as per warning of Finance Minister Mr. P. Chidambaram it might increase in upcoming months. The manufacturing sector isn't showing sign of recovery and economy is in shambles. GDP growth has slowed down to 4.5% from nearly double digit growth. Though many might argue this fact with the ongoing global economic meltdown but the reality is a bit harsh since some smaller economies are performing better than ours even in these testing times. Our currency is worst performing Asian currency which is already making imports dearer. Oil and fertilizers subsidy has already made subsidy bills at such levels that govt is trying to come up with a formula to cut off the oil subsidies since 70% of our oil demand is catered through imports. Our defense spending is third highest in world after USA and China. To roll out food security we will need to ramp up our storage capacity, build warehouses etc and this in turn would mean extra costing burdens which would further add to subsidy burden of the exchequer. 

Let me tell you one more killer provision of this bill. If states like Punjab, U.P, A.P or Maharashtra (producer of maximum agricultural output in India) get a natural disaster (like one in Uttarakhand recently or Maharashtra faced last year as drought) then this bill has ability to impact food prices to such an extent that we can't even imagine and that too not only in India but the whole world. Yes, you heard me correct, it might impact whole world. The whole pricing model might crash at those times. The reason is, govt would need to go out and purchase food grains from all around the globe to fulfill the promise of food security bill which in turn might increase subsidy burdens to whopping levels and food prices in local as well as international markets might reach to unsustainable levels since India is second most populous country in the world.

My question is that, do we really have any scope left for another subsidy burden of 2,000,00 crore(or 40 Billion$) annually which might even lead to our sovereign debt ratings turning to junk and in turn would dry up the investment  in our country.Do we know that 40 percent of rice and wheat earmarked for the poor gets siphoned off due to corruption? Though the narrower impact of this bill on poor's life can't be denied but the motive and broader impact of this bill are definitely questionable. Let us wait and see what happens now but a wide reached consensus needs to be built at first place for heavy impact bills like food security bill. 

Apurv Garg