About three decades ago, the chief minister of Tamil Nadu, M.G. Ramachandran, made it legal for two people to ride on a bicycle, a traffic offense until then. The masses of the South Indian state rejoiced in the streets and, not for the first time, they hailed their chief minister as the true hero of the poor.
It was in the nature of Indian politics then to pass off minor charities as reforms. The poor, who did not really believe that their condition could be improved by human intervention, accepted these gestures as great acts of kindness. When Ramachandran died in 1987, there were reports of people setting themselves on fire in grief, and hundreds of thousands of people attended his funeral, even though he had not made them as rich as he had made himself.
Indians are less gullible now. They have far greater expectations from the government, and the state has more money to spend on them. There is genuine political will, too. The middle class is now claiming that its heart bleeds for the poor and that poverty is a direct consequence of political corruption, and so the government must be humiliated. The news media
have been granting these wishes almost daily between commercials. So the
government really does have good reasons to cure poverty.
But how? For starters, there is a serious dispute among scholars over the very definition of poverty. ‘’Which Indians are poor?’’ has a simple answer: ‘’Most.’’ But a narrower definition is necessary, because if the percentage is too high, then the impact of the poverty alleviation plans is diluted. If everybody is poor then nobody is poor. So, India must first decide who is poor. Or, to be precise, who is the poorest of the poor? A few days ago, the Planning Commission of India, a relic from the days of socialism and central planning but still a powerful government institution, accepted the recommendation of a committee that had been headed by Suresh Tendulkar, a former member of the prime minister’s Economic Advisory Council who died in June, and set the poverty line at a monthly household expenditure of 4,824 rupees, or $98, for an urban family of five and 3,905 rupees in rural areas. These figures were derived from 2004-5 prices and adjusted for inflation. The committee’s study was conducted in 2004-5, when 37.2 per cent of Indians fell below its recommended poverty line.
The commission’s decision was controversial among scholars who were infatuated with other definitions of poverty.
The definition matters because it determines who will benefit from various government programmes.
Another plan of the government to identify the poor is also mired in controversy. If the project of the Unique Identification Authority of India goes as envisioned, it would represent every one of the 1.2 billion Indians as biometric data and give him or her a unique number, similar to the US Social Security number. This identification would help any Indian open a bank account, the first step toward eliminating the middlemen who operate between the hand and the mouth. The project would include the homeless and the absolute poor who do not have any identification details attached to them and who cannot legally prove that they exist.
At the helm of the identification authority is Nandan Nilekani, co-founder of the software corporation Infosys, who quit his job as C.E.O. to join the government. He is facing criticism from those who fear that his project would help the government intrude into the lives of its citizens. Nilekani, who believes that the benefits, especially for the poor, far outweigh the risks, has said that he was exasperated sometimes by the general pessimism of his fellow Indians but would persist as long as he had the government’s backing.
The definition of poverty and the allotment of identification numbers would eventually help the government achieve a long-cherished wish of some Indian economists: ending the flawed public distribution of subsidised food and
other goods, and instead transferring the subsidy as cash directly into the bank accounts of the poor.
There has long been a view, inspired by a thought experiment of the economist Milton Friedman, that if Indian finance ministers had simply airdropped cash from a helicopter instead of spending it on poverty alleviation programmes, India’s poor would be in better shape. Of course, this is more lament than economic theory. But the direct cash transfer plan does come close to airdropping money into the right hands. Not everyone is optimistic, though. There are worries that the poor would spend this money on frivolous goods instead of nutritious food.
India’s battle against poverty is as old as its national identity, and it has achieved reasonable success, especially in the last two decades. Among the stark tokens of absolute poverty that have disappeared are those lumbering human beings with deformities and injuries that made grown men shut their eyes and children remember forever.
Fewer children than ever in the history of modern India are dying of malnutrition. More than ever are going to school, and they are wearing shoes, too. Urban Indians complain almost every day that it’s getting harder to find maids and drivers. That’s a good sign.