Setting a High Bar for Poverty in India

Thursday, July 10, 2014

NEW DELHI — It is not uncommon for Indians to stand in a line to receive alms from a politician as he gives away clothes, pots and laptops that would make Apple laugh. This is a custom that has survived from a time when the theater of charity was enough to make the poor feel grateful. But they have since come to regard such alms as political buffoonery and now expect substantial assistance from the government.

To bring order to the public spending that subsidizes hundreds of millions of lives, and to ensure that the poorest receive what is meant for them, India is on a constant quest for a meaningful definition of poverty. The latest recommendation is from a committee headed by a former chairman of the prime minister’s Economic Advisory Council, Chakravarthi Rangarajan. Under the recommendation, a rural family of five spending less than 4,860 rupees, or about $80, a month, or an urban family spending less than 7,035 rupees, at 2011-12 prices, should be deemed poor. This marks 363 million Indians, or 29.5 percent, as poor in 2011-12, the latest period analyzed by committee.

Source: The New York Times (link opens in a new window)

Impact Assessment
Base of the Pyramid, financial inclusion, poverty alleviation