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	India"s official poverty line doesn"t measure up by Jayati Ghosh Jawaharlal Nehru university India   Dec 2011 (AlertNet)   Inequality in earnings has doubled in India over the last two decades, making it one of the worst performers in terms of salary disparities from all the emerging economies, the Times of India has reported.   Aid workers say that despite doubling the size of its economy between 1990 and 2005, Asia''s third largest economy has not yet been able to wipe out poverty and has largely failed to translate its economic success to benefit the grassroots poor.   According to a new report by the Organisation for Economic Cooperation and Development (OECD), the top ten percent of wage earners in India now make 12 times more than the bottom 10 percent.   “There is evidence of growing concentration of wealth among the elite,” said the report.   “The consumption of the top 20 percent of households grew at almost 3 percent per year in the 2000s as compared to 2 percent in the 1990s, while the growth in consumption of the bottom 20 percent of households remained unchanged at 1 percent a year.”   Wage inequality has fuelled more general inequality in the country, said the report, adding that India''s Gini coefficient, the official measure of income inequality, has risen from 0.32 to 0.38, with 0 being the ideal score.   In the early 1990s, India’s income inequality was close to that of developed countries, but its performance has plummeted since then, bringing it closer to China on income inequalities than the developed world.   India spends less than 5 percent of its Gross Domestic Product (GDP) on social protection schemes compared to Brazil''s more than 15 percent and its tax revenue as a proportion of GDP is under 20 percent -- the lowest of all emerging economies -- and just half that of developed countries, said the report.   South Africa is the only emerging economy with worse earnings inequality, but it has halved this number over the last decade, the report added.   Oct 2011   India"s official poverty line doesn"t measure up, by Jayati Ghosh.   It is time to separate people"s real needs from the arbitrary assessments of poverty that have guided Indian governments.   India"s poverty line has always been a matter of huge debate, but it was a discussion mostly confined to economists and policymakers. But the matter has now gone public, following a row about an affidavit from the planning commission to the supreme court of India, in which the official poverty line was set at 26 rupees (around $0.53) per person per day in rural areas and 32 rupees in urban areas. This can only be a good thing, because the official attempts to measure poverty are not just arcane, but riddled with contradictions.   How exactly are these numbers arrived at? The measure was developed in the early 1970s, when a group of experts decided the appropriate line would be set according to the average monthly consumption expenditure of households whose members consumed (per capita) 2,400 calories of food per day in rural India and 2,100 calories per day in urban India.   Subsequently, the poverty line has simply been updated using consumer price indices. These numbers now have little to do with actual calorie consumption because food consumption patterns have changed. However, the use of that line has been defended by official sources who have argued that, at that level of expenditure, families could afford to buy minimum food and have simply chosen not to.   Of course, this begs the question of whether it is really choice or the urgent need to consume other items (energy, healthcare and so on) that determine patterns of spending. Nevertheless, it is precisely this line (annually updated by consumer price indices) that has been used to describe the extent of poverty in India for decades. This was roughly similar to the World Bank"s estimate of $1 a day (now $1.25 a day) per person, not at nominal exchange rates, but at purchasing power parity (PPP) exchange rates.   In recent times, various committees led by economists have come up with different ways to measure the extent of poverty. The official line delivers a poverty rate of around 32% of the population. A committee under Suresh Tendulkar estimated it at 37%, while another led by NC Saxena said 50%, and in 2007 the Arjun Sengupta commission identified 77% of Indians as "poor and vulnerable".   The World Bank"s PPP estimate of Indian poverty was higher than 40% in 2005, while the Asian Development Bank arrived at almost 50%. The UNDP"s Multidimensional Poverty Index finds the proportion of the poor to be higher than 55%.   All this even sounds ridiculous. And if it were simply a question of measuring the extreme poor and tracking the extent of extreme poverty over time, this discussion could indeed be left to the social scientists. But what has made it matter – for all the wrong reasons – is that these arbitrarily drawn poverty lines have been used to determine the extent to which citizens receive subsidised access to essential goods and services.   Since the mid-1990s, various government schemes have differentiated between the categories of "Below Poverty Line" (BPL) and "Above Poverty Line"(APL), and it was announced that a whole range of subsidised goods and services - from cheaper food grain in the public distribution system to subsidised healthcare to access to funds for basic housing – would only be available to BPL households.   Since India has a federal system, state governments are in charge of delivery of all these goods and services, and they have to decide which households are most in need through surveys.   In fact, many state governments have taken a more realistic view of the people in need and issued "BPL" cards to many more households than those recognised according to the official poverty line. In some southern states, for example, significantly more than two-thirds of rural households have BPL cards.   But the central government allocates resources (both money and food grain) to the states on the basis of the national poverty estimates taken from the national sample survey, which is based on the official poverty line. State governments that provide these goods and services to additional households have to finance the extra ones themselves. As they have faced hard budget constraints, this has become increasingly difficult. That is why the poverty numbers are such a bone of contention.   In this context, the only sensible thing for the government to do would be to separate the basic entitlements of the people, especially food, from such controversial numbers. This is the basic proposal of a statement signed by more than 30 leading economists, including two former state finance ministers and many senior economists who have worked with the government in different capacities. The statement is worth quoting:   "We do not consider the official national poverty lines set by the planning commission, at 32 and 26 rupees per capita per day for urban and rural areas respectively, to be acceptable benchmarks to measure the extent of poverty in India.   In any case, irrespective of the methodology we adopt to measure poverty, the number of poor and hungry people in the country remains unacceptably large.   While academic debates can continue on the appropriate measure of poverty in India, its extent and whether it is decreasing over time, we strongly believe that it is unacceptable and counterproductive to link the official poverty estimates to basic entitlements of the people, especially access to food.   Official surveys of nutritional intakes and outcomes indicate that undernutrition is much more widespread than income poverty, however defined.   It is also widely recognised that the targeted public distribution system (PDS) introduced since 1997 has done more harm than good by creating divisions even among the poor and has led to massive errors of exclusion.   Restoring the universal PDS appears to us as the best way forward in combating hunger and poverty. This must be a policy priority in the backdrop of high and persistent food price inflation".   Following the controversy, the government has now declared that it will take into account multiple dimensions of deprivation for arriving at specific entitlements that rural households will receive, and that the current poverty estimates based on these declared numbers will not be used to impose any ceilings on the number of households to be included in different government programmes and schemes. We still have to see how this will play out, but here is a step in the right direction.   * Jayati Ghosh is professor of Economics at Jawaharlal Nehru university, New Delhi. Below is a link to a Hunger Video Project - made by people from some affected communities. Visit the related web page
	Floods drown Asia"s rice bowl by Reliefweb / Agence France-Presse   Oct 20, 2011   Many children dying and jobs being lost in Asian floods.   The floods which have affected eight million people across South East Asia, and which now threaten Bangkok, have underlined shortcomings in disaster risk reduction with many children drowning because they cannot swim, and thousands of workers now unemployed because of poorly located manufacturing plants, the Head of the UN’s Bangkok Office for Disaster Reduction, UNISDR, Jerry Velasquez said.   “We are particularly concerned to learn about the high numbers of children dying in these floods which was a concern raised by children themselves when over 600 were interviewed for the new Children’s Charter on Disaster Risk Reduction which was the focus of International Disaster Reduction Day on October 13.”   Over 200 children are reported to have died in Cambodia, Vietnam and Thailand out of an estimated total of 745 flood-related deaths. And more than 3000 schools have also been affected in Thailand alone which will have long term consequences on the education of thousands of children.   “UNISDR is also urging the governments of the affected countries to open discussions with the private sector on what adjustments need to be made in their land use to locate their factories in disaster proof areas to better protect their workers. The private sector has a responsibility in reducing disaster risks when these events are now so predictable in the light of what we know about the impact of climate change on the frequency and intensity of these types of disasters.”   Across the region the well-being of millions will be drastically affected by loss of livelihoods as manufacturing plants are forced to shut and agriculture struggle to recover.   “These floods map exactly onto models for a one-in-a-hundred-years event, and things could get worse in the future. If we know where the floods are going to happen and how high they are going to be, then we should be better prepared,” said Velasquez.   Oct 5, 2011   Massive floods have ravaged vast swathes of Asia"s rice bowl, threatening to further drive up food prices and adding to the burden of farmers who are among the region"s poorest, experts say.   About 1.5 million hectares (3.7 million acres) of paddy fields in Thailand, Vietnam, Cambodia and Laos have been damaged or are at risk from the worst floods to hit the region in years, officials say.   In Thailand, the world"s biggest rice exporter, where 237 people have died in the floods, about one million hectares of paddy -- roughly 10 percent of the total -- have been damaged, they say.   Heavy rains in Laos and Cambodia have also led to big losses in recent weeks, and experts say flood waters have now drained into Vietnam"s Mekong Delta, a key global rice producer, making it the latest to be inundated.   Further west, flooding of rice and other farmland in Pakistan"s arable belt has cost that country nearly $2 billion in losses.   "The whole region will now suffer from rising food prices as potential harvests have now been devastated. The damage is very serious this year and it will be some time before people can resume normal lives," Margareta Wahlstrom, the United Nations chief of disaster reduction, said in a statement.   The flood damage comes on top of worries about the impact on global rice prices of a new scheme by the Thai government to boost the minimum price farmers receive for their crop.   Vietnam meanwhile is the world"s number-two rice exporter and the Mekong Delta in southern Vietnam accounts for half the country"s production.   "Agricultural production is seriously affected this year by the floods that were, in fact, worse than our forecasts," said Vuong Huu Tien, of the flood and storm control department.   In Cambodia, more than 330,000 hectares of rice paddy have been inundated, said a senior official at the Ministry of Agriculture.   Cambodia, where more than 160 people have been killed in the floods, exports only a fraction of total rice production but the crop accounts for about 7.5 percent of gross domestic product.   Laos, one of Asia"s poorest nations, has also suffered, according to reports in state-controlled media there. Tropical storms which struck since June killed at least 23 people in the country and damaged more than 60,000 hectares of paddy, the reports said. Visit the related web page
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