Saturday, May 28, 2011


The Indian government proposed a Food Security Act that will provide subsidised grains only to those who earn less than Rs 20 a day (if you live in a city and less than Rs 15 a day if you live in a village) - the BPL - below poverty line. The reason the poverty line matters so much is because it determines how many Indian can claim welfare, which, in turn, determines the fiscal burden the State will have to bear. The government says it can’t afford to feed everyone – hence the manipulations with the BPL. But for the poor, the BPL is not some statistical term: it is a lifeline. Rs 20 a day is somehow supposed to feed whole families. Ferrari dealerships and Louis Vuitton stores spring upto cater to the new urban rich but leave hundreds of millions of others struggling without access to adequate food and clean water.

Economists Pravin Jha and Nilachal Acharya have estimated that if rice/wheat were made available to 200 million households in India at Rs 3 a kilo, it would add Rs 84,399 crore to the Budget, just the price of two Commonwealth Games.

The World Bank global poverty line, at $1.25 a day or about $38 per month, is three times higher than India's urban level.

Himmat pedals his bicycle rickshaw through New Delhi's crowded streets, earning barely enough to feed his family. The 5,000 rupees ($110) he earns a month pays for a tiny room with a single light bulb and no running water for his family of four. After buying just enough food to keep his family from starving, there is nothing left for medicine, new clothes for his children or savings. Himmat is way above India's poverty line. "My existence doesn't matter to the government. They don't care if people like me live or die," he said.

The country currently spends just 2 percent of its GDP — about 29 billion — in social protection, and half of that goes to the Public Distribution System, which provides the poor with subsidized food. Even with the low poverty line, the system — riddled with corruption and mismanagement — caters to over 440 million people, more than the entire population of the United States. The World Bank poverty line would add about 60 million more people to that category.

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