Humane criteria for fixing poverty line

When questioned on similar lines at an interaction in Bangalore last year, Planning Commission deputy chairman Montek Singh Ahluwalia had made a revealing but perplexing statement that the poverty line was only meant to determine whether a family is able to meet its food needs and not if it can cover all its basic needs. Now who can live on food alone? If this is the norm, then only beggars can qualify to be BPL and all others will be above the poverty line (APL). This, when studies say that more than 70 per cent of our population cannot meet the minimum calorie intake norm of 2,400 calories per day per person.

The confusion about who is poor is exemplified by the varied poverty lines and the lack of clarity on what a poverty line is really expected to cover. The recent Suresh Tendulkar report conceded that food alone was insufficient and added some costs for health care and education to determine who is poor and came up with the figure of 33.4 per cent BPL. The N C Saxena report estimated the BPL category at 50 per cent of the population.

The Planning Commission claims there are 31 lakh poor families in Karnataka, while the state government says there are more than 90 lakh. It is interesting that a working group set up by the Centre in 1962 acknowledged that the poverty line should cover all basic needs.

Minimum wage

Taking the matter slightly forward, the Wadhwa Committee set up by the supreme court in 2008 in the Right to Food case said that the basis for determining the BPL category should be the minimum wage payable to an unskilled workman, such as under the NREGA — Rs 100 per family or Rs 25 per capita per day. Anyone earning below this amount should be deemed to be BPL.

However, have these state-fixed minimum wages been determined as per the criteria evolved for their fixation? As per the 15th Indian Labour Conference of 1957 a need-based minimum wage (NBMW) should cover all the needs of a worker’s family of four members for food, clothing (72 yards per year), shelter (industrial housing standard) and 20 per cent of wage additionally for fuel, lighting, etc.

The minimum nutrition requirements were to be as per the guidelines of Dr Aykroyd — 2,700 calories and specified amounts of fats, minerals and proteins. One-fifth of proteins were to also comprise animal products — milk, eggs, meat, etc. The supreme court accepted these as minimum requirements of a worker and added another 25 per cent more wages for health care, education, recreation, etc in 1991, giving these criteria the force of law. But nowhere in the country are minimum wages being fixed as per these criteria.

An attempt to cost the nutritional requirements as per Dr Aykroyd was made by the National Trade Union Initiative which arrived at the figure of Rs 5,018.79 per month at December 2009 prices for food alone for an average family. Adding another 50 per cent for the other requirements for clothing, shelter, etc, one arrives at a figure that is around Rs 90 per capita per day, Rs 10,000 per month.

Either the minimum wage should be high enough to enable a person to fulfil all his basic needs, or the cost of fulfilling these needs should be so subsidised that the minimum wage can cover all of them. If at all there has to be an income criterion for the poverty line, which itself is being debated, the NBMW should be the limit.

There is a view that there should be no upper limit on the salaries of CEOs in the corporate sector. Paradoxically, our planners appear to have been working on the premise that there should be no bottom limit below which the income levels for determining the poverty line will not be allowed to sink. Hopefully, the supreme court will set a more humane limit for this line.