Get poverty measures right

It may shock the Indian middle-class to know that it lives ‘barely or not far above India's poverty line, and below international poverty lines, especially in rural areas.' The median rural person in India lives on Rs 15 per day (with a purchasing power parity, or PPP, of $1.30), spending only Rs 3 each day more than a person on the official Indian rural poverty line, write the authors of ‘ Perspectives on Poverty in India: Stylized facts from survey data ' from the World Bank ( www.oup.com ).

The authors add that India's poverty line is very low by international standards, and that 80 per cent of the rural population lives below the median developing-country poverty line of Rs 22 (PPP $2) a day. “Moreover, when the definition of poverty is expanded to include other dimensions of well-being, such as access to education, health care, and basic infrastructure, then poverty clearly continues to afflict more than half of India's population.”What can dishearten one further is the observation in the book that definitive views on the pace of poverty decline are hostage to data uncertaintiesAcknowledging that growth has tended to reduce poverty, the authors hasten to remind however that problems with data can cloud any assessment of whether the growth process has become more or less pro-poor in the post-reform period.

A report that merits detailed discussion among the macro measurers.

Fiscal gains of inclusive education

An instructive reference in ‘ Poverty and Social Exclusion in India' from the World Bank ( www.oup.com ) is to the Roma (gypsies), who number about 10 to 12 million in Europe and represent the largest trans-national minority in the region. The Roma, one learns, account for the main poverty risk group, suffering from low educational attainment, high unemployment, and poor human development outcomes. Drawing on information from www.romaeducationfund.hu, the book reports the worrying findings of a recent study across four Central and Eastern European countries, viz. Bulgaria, the Czech Republic, Romania, and Serbia – that an annual economic loss of 5.7 billion euros and a fiscal loss of 2 billion euros are estimated to be incurred by the four countries as a result of reduced productivity and additional costs incurred to finance the social security of unemployed Roma. An interesting insight from the Bank is that the annual fiscal gains from investing in the education of Roma are significantly higher than the costs incurred even if all Roma people were to be educated. The URL cited above, it should be heartening to note, is one such positive initiative, in the form of the Roma Education Fund, with emphasis on giving Romani children a good education start by focusing on access to pre-school and successful transitions into and through primary education.Recommended read for those who work towards inclusive growth.

COMMENT NOW