The Hindu Business Line : World Bank study exposes limitations of Official Poverty Line

It is a commonly held belief that governments systematically underestimate poverty levels. Now, a World Bank study has demonstrated the extent of divergence between what “people” consider as being poor from what is defined by the Government through the official poverty line (OPL).

The study, based on interviews with more than 30,000 women and men from 300 villages across Andhra Pradesh (AP), Assam, Uttar Pradesh (UP) and West Bengal, sought to identify community poverty lines (CPL) specific to local circumstances.

These, in turn, were derived from the respondents’ own perception of the stage below which households are deemed to be poor or above which they escape poverty. Once the CPL was established for a particular village (based on discussions with people in the community), the discussants were then informed about the income levels corresponding to the Government’s OPL.

The study, Moving out of Poverty: The Promise of Empowerment and Democracy in India, showed that 79 per cent of the communities interviewed in UP placed their CPLs above the OPL, with these being 59 per cent in AP, 92 per cent in Assam and 86 per cent in West Bengal. For the four States as a whole, an average 81 per cent believed that the official data underestimated the extent of poverty.

“When…discussion groups in the villages were informed of the OPL in their State, many participants jeered and said that it was impossible to live on such a small income. Many expressed anger that the better-off people expected them, the poor, to live such a meagre existence,” the study noted.

At the same time, it added that these results should not be interpreted as an indictment of OPLs. “However, the finding does underscore the importance of listening to the voices of poor people who are calling for adjustments to OPLs. When community and official definitions of poverty do not mesh, policy responses based on the OPL alone may violate local notions of fairness and justice…This is particularly true during periods of rising aspirations,” it pointed out.

Ladder of life

As an example of how CPLs were arrived at, the study described the ‘ladder of life’ in Kamlapur, an AP village. The lowest level in the ladder was occupied by landless labourers, while Step 2 had labourers with small holdings of 1-2 acres and no proper houses. Step 3 had ‘small farmers’ owning 3-5 acres and also houses and cattle, but no wells to irrigate their entirely rainfed land. The next three rungs belonged to ‘medium farmers’, ‘big farmers’ and ‘landlords’.

In this case, the villagers set the CPL at just above Step 2, whereas they identified the OPL at the lowest Step 1. Even in Step 3, where households were no longer considered poor, they remained exposed to significant economic insecurity due to their reliance on rainfed agriculture.

In other words, even while the CPLs were subjective measures, they still reflected ‘real’ economic conditions that the so-called objective OPLs do not seem to capture.

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