Wednesday, July 14, 2010

New Index Finds Indians Poorer Than Africans and Pakistanis

A new multi-dimensional measure of poverty confirms that there is grinding poverty in resurgent India. It highlights the fact that just eight Indian states account for more poor people than the 26 poorest African countries combined, according to media reports. The Indian states, including Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh , Orissa, Rajasthan, Uttar Pradesh, and West Bengal, have 421 million "poor" people, compared to 410 million poor in the poorest African countries.

Developed at Oxford University, the Multidimensional Poverty Index (MPI) goes beyond income poverty based on $1.25 or $2 a day income levels. It measures a range of "deprivations" at household levels, such as schooling, nutrition, and access to health, clean water, electricity and sanitation. According to Oxford Poverty and Human Development Initiative (OPHI) country briefings 2010, 55% of Indians and 51% of Pakistanis are poor.

OPHI 2010 country briefings on India and Pakistan contain the following comparisons of multi-dimensional (MPI) and income poverty figures:

MPI= 55%,Under$1.25=42%,Under$2=76%,India_BPL=29%


Lesotho MPI=48%,Under$1.25=43%,Under$2=62%,Lesotho_BPL=68%

Haiti MPI=57%,Under$1.25=55%,Under$2=72%,Haiti_BPL=NA


Among other South Asian nations, MPI index measures poverty in Bangladesh at 58 per cent and 65 per cent in Nepal.

Source:  Where Are the Poor and Where Are the Poorest?

While OPHI's MPI is a significant improvement over the simplistic income level criterion for assessing poverty, it appears that the MPI index gives nearly three quarters of the weight to child mortality and school enrollment, and just over a quarter of the weight to a combination of critical factors such as access to electricity, sanitation and clean drinking water which are essential for proper learning environment, increased human productivity and healthy living.

South Asians face a massive challenge in overcoming pervasive poverty that makes the region look worse than the poorest of the poor nations of sub-Saharan Africa.
Just think about the South Asian situation in terms of Maslow's hierarchy of needs. Over 76% of Indians and 60% of Pakistanis living on less than $2 a day are busy struggling at the bottom of the pyramid to satisfy their basic physiological needs. They have no time or to think about freedom and democracy which belong near the top of Maslow's pyramid. It will take a lot more than the usual rhetoric of freedom, democracy and human rights to help them. It will take serious and focused effort to improve their situation through better governance and greater spending on human development. Real progress will not happen as long as South Asians hang the petty thieves and elect great ones to high offices.

Here is a video clip about grinding poverty in resurgent India:

Related Links:

Haq's Musings

South Asia Slipping in Human Development
OPHI Country Briefing: Pakistan

OPHI Country Briefing: India

Slumdog Inspires India's "Big Switch"

Mumbai's Slumdog Millionaire
Poverty Tours in India, Brazil and South Africa
South Asia's War on Hunger Takes Back Seat

British TV Accused of Making "Poverty Porn"

Orangi is Not Dharavi
Bollywood and Hollywood Mix Up Combos
Grinding Poverty in Resurgent India

Slumdog Is No Hit in India

Pakistani Children's Plight

UNESCO Education For All Report 2010

India's Arms Build-up: Guns Versus Bread

South Asia Slipping in Human Development

World Hunger Index 2009

Challenges of 2010-2020 in South Asia

India and Pakistan Contrasted 2010

Food, Clothing and Shelter in India and Pakistan

Introduction to Defense Economics


satwa gunam said...


You could say that pakistan is also sailing on the same boat.

In spite of 76% earning below 2$, the bpl is only 29% in case of india.

For pakistan 60% only earns less than 2$ but bpl is 33%

Ideally both has go to gather as the income will bring the bpl down. Probably the unwritten facts could be that the charity contribution could have been the factor which is reason that the bpl rate is not in proportion to the below 2$ income.

HOwever, india with a vast poplation require a large amount of socio economic activity without the middle man plundering the money

Riaz Haq said...

gunam: "In spite of 76% earning below 2$, the bpl is only 29% in case of india. For pakistan 60% only earns less than 2$ but bpl is 33%"

The self-assessed BPL poverty figures of these nations are highly suspect because they conflict with three various external measures which are probably more reliable and offer a better basis for comparison.

MPI= 55%,Under$1.25=42%,Under$2=76%,India_BPL=29%


Lesotho MPI=48%,Under$1.25=43%,Under$2=62%,Lesotho_BPL=68%


Mayraj said...

Pakistanis had a chance for better governance with the local government system. But who called to out to prevent the greater thieves from tossing it out?
Not the educated Pakistanis inside and outside the country. They just took it passively. By some fluke you had it and then lost!
Doe these people deserve better governance if they do not care enough about it?
What was the greatest legacy of the French legacy? The local systems which to this day is revolutionizing local governance!

Pavan said...

Thanks for your thoughts. Incidentally, the $2 a day norm implies a PPP value and not the exchange rate value which for India and Pakistan means that the exchage rate value has to be divided by 3. Thus for
India, 76% of the population lives at about Rs 30 a day. India's low
poverty line can be attributed to the fact that when the eminent
economist VM Dandekar was given the job, he assumed that the state
would provide health, education and housing. So he based the norm
purely on calorific intake. In Pakistan's case, the late Mahboob ul Haq who developed the UNDP HDI considered several additional inputs.
Of course it suited the Palnning Commission to retain the older norm
since it yielded lower numbers of the very poor who needed susidised
food and fuel. The recently appointed Tendulkar Committee has revised
this upwards whilst distinguishing between the urban/rural poor. So we
now have several poverty lines! Regarding the point about greater
welghtage to child mortality, I feel that levels of child as also
maternal mortality indicate whether very basic health services are
being provided. Large number of rural poor are further indebted since
they have to spend meagre incomes on basic health. Thus there is a
direct co-relation between primary health services and poverty.
Bangladesh hass done very well in this area and are the only country
likely to reach the millenium goals as far as mortality rates are
comcerned. Will check the MPI. Another related aspect is that with
lower mortality rates you get lower fertility rates which is a crying need in our region. I think we in India have gone wrong in our
priorities between health and education. We spend 3% of GDP on
education and 1% on health. Most developing countries with the
exception of Pakistan spend equalyy on health and education. Just a few thoughts.

Rahul said...

I knew when i read the news in TOI, a new article was coming on this blog...

Mr. Riaz, worry about ur Poor Pakistan first.
Where did u get that 51% was poor. Read the DAWN report. 75% of Pakistan population earns less than 2$/ day.

have you forgotten your country has been labelled as the 10th failed state.

A survey by ASSOCHAM has said that India will create 90 million jobs in the next 5 years. Your country is losing jobs inspite of growing it.

less than half of your population is literate. And majority of them are educated in Madrasa...

Mayraj said...

Govts tend to want to show less people are needy witness the unemployment numbers in US and inflation calculations and the inefficient poverty calculations here. As what is the poverty line does not take into account regional cost of living differences.
Why should not developing countries try this trickery more as they have higher poverty levels and less revenues than countries like the US.

"since the 1960s, Washington has been forced to gull its citizens and creditors by debasing official statistics"
Numbers racket:
Why the economy is worse than we know
Official poverty measure undercounts the nation’s poor

Riaz Haq said...

Rahul: "Where did u get that 51% was poor. Read the DAWN report. 75% of Pakistan population earns less than 2$/ day."

51% MPI comes from Oxford MPI study which puts India at 54%. And under $2 poverty figures of 60% for Pakistan and 76% for India are from UNDP.

Read my post again carefully, and follow the embedded links for sources.

Dawn report is wrong. There is no basis other than hearsay for Dawn's reported figures.

The rest of what you say is irrelevant nonsense.

Riaz Haq said...

About 3000 Pakistanis tragically lost their lives in terrorist violence last year. India loses over 7000 people every day to hunger.

Two million children in India die and turn into statistics every year. That's about 6,000 deaths everyday. A CNN-IBN Special Investigation travelled to the rural heartlands of UP to document deaths and cases of malnutrition for a special edition of 30 Minutes. Here’s the first installment from UP’s Varanasi and Lalitpur districts.

Jaharunnissah lost her only son to hunger about two months ago. Four-year-old Khusbuddin was emaciated and weighed a mere 6.5 kg at the time of his death.

”Woh kuposhan ka shikar tha usko main doodh dava poora nahin kar paati thi paise ke kaaran is vajay se uski maut ho gayi. (I could not fend for his food and medicine. He died of malnutrition),” she says.

Abandoned by her husband, Jaharunnissah is trying to piece her life together. But at the end of one day of toil embroidering sarees, she is paid a meager Rs 10 or Rs 15.

“Aaj agar mere bachhe ka ilaaj ho jaata to mera bachha bach jaata is baat ka mujhe dard rehta hain ki paise na hone ke kaaran aaj maine apne bachhe ko kho diya. (I wish I hadn’t lost my son. The pain of losing a child because of lack of money to feed him is unbearable),” says an inconsolable Jaharunnissah


A Unicef report, quoted by the BBC, said the world was failing its children by not ensuring that they had enough to eat.

The report said India contributed about 5.6 million child deaths per year, more than half the world's total.

Rahul said...

Report which does not match your nonsense views are WRONG. Are u the only sane person left in this world.

Havent u read that Pakistan is the 10th failed state.

You don't read ur own newspaper.
There were numerous articles, in recent times which talked about the dismal state of education curriculum, economic failures etc.

What to tell u Mr. Riaz. You just take relief that there are problems in India to, because you know that ur own country is a lost case...

I once again urge you to start worrying about ur problems, leave India to us.

Riaz Haq said...

Rahul: "There were numerous articles, in recent times which talked about the dismal state of education curriculum, economic failures etc."

Well, the multi-dimensional poverty index (MPI) shows that Pakistanis are still less deprived than Indians in spite of all the problems.

Some people argue that India's GDP growth will reduce poverty. But the data shows it has so far not translated into any benefit for the poor.

Over 200,000 farmers have taken their lives in the last 10 years in India, in spite of rapid economic growth.

And there are growing numbers of farmers' suicides under a rising debt burden, and a recent Indian Planning Commission report that there are 100 million more poor people in India today than there were in 2004.

Here's an excerpt from a Reuters report from April 2010:

The poverty rate has risen to 37.2 percent of the population from 27.5 percent in 2004, a change that will require the Congress-ruled government to spend more money on the poor.

The new estimate comes weeks after Sonia Gandhi, head of the Congress party, asked the government to revise a Food Security Bill to include more women, children and destitutes.

"The Planning Commission has accepted the report on poverty figures," Abhijit Sen, a member of the Planning Commission told Reuters, referring to the new poverty estimate report submitted by a government panel last December.

India now has 410 million people living below the U.N. estimated poverty line of $1.25 a day, 100 million more than was estimated earlier, officials said.

India calculates how much of its population is living below the poverty line by checking whether families can afford one square meal a day that meets minimum nutrition needs.

satwa gunam said...


When you cannot believe the statistic of india how can the facts given by pakistan be correct.

Indian atleast is growing at more than 8% p.a. and the trickling effect can reach the masses. Where the pakistan growth rate is much less and further it is caught in a fatradical war with the shadow organization once created by them.

Yasir said...

This is why because India got too much population. But if we see from Industry point of view India is more rich and educated.

Anwar said...

I sometimes wonder what is it that you are trying to put forward. Shall we as Pakistanis feel good because we are good or shall we feel good just because the other side is bad? Such comparisons are self defeating. Both countries have problems with poverty and priorities.
These intellectual confrontations and needless pricking are silly at best.
Provide some solid solutions to the problems Pakistan is facing instead of wasting time on highlighting sad affairs of others.
By the way, during last academic year alone we processed 25 graduate and 6 undergraduate student applications from India and none from Pakistan... Does it not indicate something...?

Anonymous said...

Karnataka outlaws beef despite protests

Published Date: July 16, 2010

By Ritu Sharma, New Delhi

The cow is considered holy in orthodox Hinduism
The Karnataka state legislature’s upper house has passed a controversial bill banning the slaughter of cows, ignoring fierce opposition by Christians and Muslims.

Pro-Hindu Bharatiya Janata Party (BJP) lawmakers passed the bill on July 15 without a debate after the main opposition Congress party boycotted proceedings, media reports said.

Church leaders in Karnataka slammed the move saying it reflects “vote politics” and aims to appease the Hindu majority.

“Despite protest by thousands, the bill was passed. It is not right on the part of a government,” Bishop Aloysius Paul D’Souza of Mangalore told on July 16.

Muslims and Christians, who eat beef, have strongly opposed the Karnataka Prevention of Slaughter and Preservation of Cattle Bill, 2010, ever since it was introduced in the legislative assembly on March 19.

Its passage through the Legislative Council, or the upper house, means it only needs the governor’s signature to become law.

“The bill was forced through without discussion. It is not the correct way to handle this situation,” said Father Vincent Monteiro, spiritual director of the Catholic Sabha (forum) in Mangalore.

More than 500 people demonstrated against the bill on July 14. Christian organizations have also joined other secular associations in opposing the bill, he said.

The bill proposes to ban the slaughter of cattle and the purchase, sale and disposal of cattle for slaughter. It will also prohibit the use and possession of beef, which effectively bans beef consumption.

The bill also stipulates jail terms for violators and empowers officials to search and seize premises to enforce the law.

Beef is part of the regular diet for most Christians and Muslims and their leaders say most poor people depend on beef for protein.

BJP leaders, however, says the bill is necessary because Orthodox Hindus consider the cow a god.

Riaz Haq said...

Anwar: "I sometimes wonder what is it that you are trying to put forward. Shall we as Pakistanis feel good ..."

Please re-read the post, particularly the following:

South Asians face a massive challenge in overcoming pervasive poverty that makes the region look worse than the poorest of the poor nations of sub-Saharan Africa.
Just think about the South Asian situation in terms of Maslow's hierarchy of needs. Over 76% of Indians and 60% of Pakistanis living on less than $2 a day are busy struggling at the bottom of the pyramid to satisfy their basic physiological needs. They have no time or to think about freedom and democracy which belong near the top of Maslow's pyramid. It will take a lot more than the usual rhetoric of freedom, democracy and human rights to help them. It will take serious and focused effort to improve their situation through better governance and greater spending on human development. Real progress will not happen as long as South Asians hang the petty thieves and elect great ones to high offices.

Anwar: "By the way, during last academic year alone we processed 25 graduate and 6 undergraduate student applications from India and none from Pakistan... Does it not indicate something...?"

Indians and Pakistanis have been coming to US for decades...and they have done very little to alleviate the problems of hunger and poverty I am raising.

As to lack of Pakistanis at your school in the US, it's a well-known fact that Pakistani students are no longer seeking to come to US since 911, because of all of the current difficulties they face in trying to come here.

I live here in Si valley where there are thousands of successful Pakistani engineers...almost all of them came here before 911.

Anonymous said...

"By the way, during last academic year alone we processed 25 graduate and 6 undergraduate student applications from India and none from Pakistan... Does it not indicate something...?"

Why this alone? The number of Indian born Professors in American Univ is far more than Pakistan (we are talking about 1 to 15 ratio). In a study in UK, Indian were found to be better educated and better performer in their career than even local whites. And Pakistanis were way below.

I think Riaz represents that middle class educated Pakistanis who have seen their counterpart from India leapfrog them in education and achievements and somehow can not digest the fact.

Riaz Haq said...

DC: "I think Riaz represents that middle class educated Pakistanis who have seen their counterpart from India leapfrog them in education and achievements and somehow can not digest the fact."

Having to leave your country for opportunities abroad is not success. And Indians, like Pakistanis, have been leaving and continue to leave their country in droves for decades.

Over a million Indians a year continue to leave home, according to CyberGandhi who cites many official sources.

Here are some excepts from it:

* Any crackdown on illegal immigrants abroad or restricting quotas to Indians are a major concern to India’s politicians. The latest statistics from US Department of Homeland Security shows that the numbers of Indian illegal migrants jumped 125% since 2000!

* 68 percent from India — would like to live in Canada, if they could.

* Alarming poverty in India: Global Hunger Index 2009

* Defense spending causes poverty in India

* 665 million Indian defecate in the open space

* India ranked bottom on wold peace index

* 2.5 million Indians make US their home

Anonymous said...

"Having to leave your country for opportunities abroad is not success. And Indians, like Pakistanis, have been leaving and continue to leave their country in droves for decades. "

True but india's success in knowledge based economy in the last two decades is predominately home driven. Last week Oracle had its 20,000th employee in India. In their web site there is a special section on Oracle India. How many decades it will take Pakistan to achieve the same. You guess.

And Indians in West, unlike their Pakistani counterparts, contribute a lot in outsourcing, offshoring and other similar things.

Stop deluding. Currently India has leapfrogged ahead of Pakistan in the global sweepstakes and this is a fact which every pakistani knows and most find it hard to digest.

Anonymous said...

And my example of Oracle was just an example. There are many other tech companies, both hardware and software which has thousands of employees working in india, paid in lakhs and lakhs (for what would cost them 6 figures and up salary in US).
AMD does very high quality job in their indian office.

And I am convinced it is not wage arbitration alone (this is how pakistanis console themselves when they ponder how india has leapfrogged). There are many other english speaking countries with low cost of living than West and yet india has taken majority of outsourced work in IT, medical back office, legal backoffice and financial backoffice.

Riaz Haq said...

Here's an Oman Tribune report on MPI variation within India:

Amidst acute poverty across South Asia, the five states of Delhi, Kerala, Goa, Punjab and Himachal Pradesh have the least number of poor people in India, according to a new measure of global poverty developed at the University of Oxford for the UNDP.

The new measure, called the Multidimensional Poverty Index (MPI), has been developed and applied by the Oxford Poverty and Human Development Initiative (OPHI).

It will be featured in the forthcoming 20th anniversary edition of the UN Development Programme Human Development Report. An analysis using the MPI reveals that South Asia and Sub-Saharan Africa have comparable intensities of poverty, according to an OPHI working paper titled ‘Acute Multidimensional Poverty: A New Index for Developing Countries’.

In terms of human lives, South Asia has the world’s highest levels of poverty.

Fifty-one per cent of the population of Pakistan is MPI poor, 58 per cent in Bangladesh, 55 per cent in India, and 65 per cent in Nepal. The analysis states: “We find that Delhi has an MPI equivalent to Iraq (which ranks 45), whereas Bihar’s MPI is similar to Guinea´s (the 8th poorest country in the ranking).

“In terms of headcount, in Delhi and Kerala 14 per cent and 16 per cent of the population are MPI poor, respectively, whereas in Jharkhand 77 per cent of the population are MPI poor and in Bihar, 81 per cent”.

Other ‘top 10’ states with the least number of poor in India are Tamil Nadu, Uttarakhand, Maharashtra, Haryana and Gujarat. The analysis reveals that there are more ‘MPI poor’ people in eight states (421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and Bengal) than in the 26 poorest African countries combined (410 million).

Anonymous said...

excellent article in NYT

Basically putting the entire blame on US for its non stop aid to Pakistan.
And poor pakistanis end up paying zakaat to rich. what a nation.

Anonymous said...

Hey DC, that article from NYT was great. Basically blows away crap theory of Riaz bhai did Hindus are very patient and tolerate centuries of discrimination where as muslims are not. That article clearly indicates that most of Pakistanis are most patient and a believer in Allah's decision to tolerate this.

Anonymous said...

Riazji has a good thing going here. Hunt hard for the worst things you can find about India, so that he (and his other devoted Pakistani readers) can feel good about themselves. And, forget their sorrow that is the reality of the Pakistan.

Of course, India is still in some ways a poor country. We know that. And, as an Indian muslims, I know India will overcome these problems in a short period of time. After all, China had the same problems a decade ago. What is important is the trajectory. And, India is on the superpower trajectory to become one of 3 or 4 superpowers in a multipolar 21st century.

Whereas Pakistan is a failed state rapidly heading towards a medieval Islamic theocracy! No amount of blogging by RIazji would change that fact!

Ahmed (proud muslim in the Indian secular democracy)

Anonymous said...

here is Dr. Hoodbhoy admitting India to be far better in education, healthcare.

Riaz Haq said...

Anon: "Whereas Pakistan is a failed state rapidly heading towards a medieval Islamic theocracy! No amount of blogging by RIazji would change that fact!"

Pakistan may be medieval, but India is downright primitive, where two-thirds of the people still defecate in the open.

Deprivation elsewhere in the world does not compare even remotely with the the scale of ongoing massive tragedy of over 7000 hunger deaths a day in India.

Hunger is a unquestionably a much bigger enemy of India than all other real or perceived enemies combined.

Over 2.5 million Indian deaths a year dramatically exceed deaths anywhere from any cause. It's shameful for the promoters of the myth of "Shining India".

This myth of "Shining India" has been busted by yet another multi-dimensional poverty index called MPI jointly developed by researchers at Oxford University and UNDP. It takes into account a range of social factors not hitherto considered while measuring poverty and will replace the Human Poverty Index (HPI) which, until now, has formed the basis for the annual U.N. Human Development Reports. It measures a whole range of deprivation from nutrition to education, sanitation and healthcare, etc. According to the MPI report, Indians are much worse off than even the the poorest of the poor in Africa, and certainly much worse off than Pakistanis.

Malnutrition in Indian "democracy" is worse than Haiti and many sub-Saharan African nations.

How poor is Haiti? The best way to answer this question is to describe dirt cookies consumed by a very large population in Haiti. These cookies are literally made from dirt with a small amount of flour and sugar mixed in to make them relatively palatable. While these dirt cookies do fill the hungry stomachs of the poor, there is very little nutrition in them. Why is Haiti so poor and underdeveloped? Well, it does have a history of oppression, slavery and colonialism. Post-independence Haiti has endured bad governance, corruption and foreign invasions. Others, like Barbados and Dominican Republic which shares the island Hispaniola with Haiti, have done much better than Haiti in spite of similar problems.

It's not just Haiti, it seems that the poor Indians are also resorting to eating dirt to survive, according to BBC:

"We live on a day-to-day basis," Suraj says, as the faint sound of hammering echoes across the village. "What we earn is what we spend on our families in a day."

In Ganne, just off the main road about an hour south of the city of Allahabad, this is a simple fact of life.

It is home to members of a poor tribal community, who live in small huts clustered around a series of shallow quarries.

Inside one of the huts sits a little girl called Poonam. She is three years old, and in the early stages of kidney failure.

Like many children in Ganne she has become used to eating bits of dried mud and silica, which she finds in the quarry. Tiny children chew on the mud simply because they are hungry - but it is making them ill.

When reports first emerged of children eating mud here local officials delivered more food and warned the villagers not to speak to outsiders. But Poonam's father, Bhulli, is close to despair.

Unknown said...


Real progress will not happen as long as South Asians hang the petty thieves and elect great ones to high offices.

I'll leave you to make your judgement about Pakistan and Zardari, but in India the last ten years have seen the cleanest governance at both state and central level. Its still far away from first world standards but the improvements are very visible and very significant. The prime minister is a man whom every Indian is proud of. Proof that in India an exceptionally honest and upright man can still rise to the highest office of the land. Most of his cabinet are clean working technocrats as well. There is still quite a bit of corruption in the Hindi heartland - states like UP, Bihar and Jharkhand but with the recent right to information act and unique identity project, in addition to a increasingly vigilant media, the future looks quite positive.

Riaz Haq said...

In Awakening Giants, Feet of Clay: Assessing the Economic rise of China and India, Mr Bardhan says it is not clear whether economic reforms are mainly responsible for the recent high growth in India.

Reforms have made the country's corporate sector more vibrant and competitive. But, he says, most of the Indian economy is not in the corporate sector, which absorbs only 6% of India's labour force. The fast growing info-tech sector - India's pride- employs less than 1% of India's workforce. Services - financial business services and telecommunications where reforms may have made a significant impact - constitute only about a quarter of the total service sector output. "It is yet to be empirically and convincingly demonstrated how the small corporate sector benefiting from reforms pulled up a vast informal sector," says Mr Bardhan.

Globalisation's impact on economies has been a divisive issue with economists. Some say it sharpened inequities and made the poor poorer; others believe it has pulled lots of people out of poverty.

Mr Bardhan isn't very sure about either.

He cites India's national household data, which suggests that poverty did not decline sharply in 1993-2005, when India experienced extensive opening up of its economy. Social indicators like child health remained - and remain - abysmally poor. At the same time, the growth rate in agriculture, where most of the poor work, has declined somewhat in the past decade. This is largely because of the decline of public investment in farm infrastructure and has nothing to do with globalisation, argues the economist.

Globalisation also does not appear to have helped in boosting India's social development indicators, Bardhan suggests. How else can one explain that Gujarat, the country's richest, high-growth, reform-friendly state, has a higher percentage of underweight children than sub-Saharan Africa?

Mr Bardhan suggests China's stunning growth rates (9% on an average) in the early years of liberalisation - 1978 to 1993 - happened because of domestic factors - farms reforms, distribution of land cultivation rights - which raised rural incomes.

Also, contrary to popular perception, China's growth has not been primarily export driven, the book argues. Bardhan shows how domestic investment and consumption have been the main drivers of China's growth. No doubt globalisation and economic reforms have trigged off economic growth but, as Bardhan argues, most of us may have overstated their importance.

Source: Biswas on

Riaz Haq said...

Here is a quick comparison of different sectors of the economy in India and Pakistan in terms of employment and GDP contribution:

Country....Agri(emp/GDP)..Textiles..Other Mfg..Service(incl IT)

India........60%/16% ...........10%/4%.....7%/25%...........23%/55%


Assuming India's PPP GDP of $3.75 trillion (population 1.2 billion) and Pakistan's $450 billion (population 175 million), here is what I calculated in terms of per capita GDP in different sectors of the economy:

India vs. Pakistan:

Agriculture: ($833 vs. $1,225)

Textiles: ($1,242 vs. $1,714)

Non-Textile Mfg ($11,155 vs $5,785)

Services ($7,246 vs $3,654)

It shows that Indians in manufacturing and services sectors add more value and produce higher value goods and services than their Pakistani counterparts.

The income range in India is much wider from $883 to $11, 155 accounting for the much bigger rich-poor gap relative to Pakistan's range from $1225 to $5,785.

Riaz Haq said...

Here are excerpts from a recent NY Times report on persistently high levels of poverty in India:

In Mumbai on Nov. 7, President Barack Obama told a group of students that India was no longer a “rising power,” but rather an “already risen” power. He celebrated an economy that “has risen at a breathtaking rate.”

Three days earlier, in New York, the United Nations released the 20th edition of its Human Development Report, a publication that has in many ways become the authoritative measure of poverty and deprivation.

India ranked 119th of 169 countries. The nation’s eight poorest states contain as many poor as the 26 poorest African countries combined. In terms of life expectancy and even gender inequality, India rates below its neighbors of Bangladesh and Pakistan.

After nearly two decades of economic changes that were to have ushered in an era of prosperity, it is clear that in some ways the nation has been naïve: high growth rates alone cannot cure poverty.

The problem, as Anirudh Krishna, a political scientist at Duke University in North Carolina, and the author of a remarkable new study on poverty, put it to me, is that “poverty in India has become very resilient. The numbers hardly budge.”

Indeed, while official estimates suggest that poverty has declined since the advent of reforms, other recent studies suggest that it is in fact far more widespread than had been thought.

At least three government committees have been formed to count the poor in India. The variance in their findings — ranging from 37.2 percent to 77 percent — suggests not only the prevalence of poverty, but also that its very nature is misunderstood. For all the attention directed at the issue, poverty remains something of a mystery.

Mr. Krishna’s study, published in September as “One Illness Away: Why People Become Poor and How They Escape Poverty,” is in large part an effort to peel away the layers of this mystery. The outcome of a decade of work in five countries, and the result of conversations and surveys with more than 35,000 families, one of its chief goals — and accomplishments — is to flesh out our understanding of economic deprivation.

There are several insights in this book, but one of Mr. Krishna’s more important is that, as he writes, “poverty is not an undifferentiated mass living beneath some theoretical or statistical line.” It is, rather, a constantly churning pool of deprivation, with those who escape being replenished by a new population that has fallen from relative prosperity.

In a 25-year study he conducted in Andhra Pradesh State, for example, Mr. Krishna found that while 14 percent of households escaped poverty, another 12 percent became poor. Overall, there was a 2 percent reduction in the poverty rate, but 26 percent of households had seen their status change.

This understanding of poverty as nonstatic, always in flux, has policy implications. It suggests that welfare programs need to be designed not just to raise people out of poverty, but also to prevent those who are not poor — and thus perhaps off the radar of such programs — from descending into poverty.

In particular, Mr. Krishna’s research highlights the major role played by illness in pushing people over the edge. He writes about “chains of negative events” that lead, through costly hospital bills, unemployment and debt, into economic hardship.

“I am fully convinced that we can’t reduce poverty in India without first doing something about health care,” he said.

Mr. Krishna’s ideas for alleviating poverty are generally convincing. But what is most persuasive about this book is less the policy prescriptions than the nuanced and rich portrait of poverty that informs those prescriptions.

Riaz Haq said...

India's high levels of poverty is no secret to the various international agencies and groups. Now Prime Minister Manmohan Singh has imposed a gag on India’s poverty data, saying no information must go out until it is vetted by the Planning Commission, according to

The gag order applies to all central ministries and departments and is apparently triggered by the embarrassment over multiple data on Indians falling under the socially damning Below Poverty Line (BPL).

The official line is that the government wants to have uniformity on all data and thus the need to centralise information flow.

Issued by Cabinet Secretary KM Chandrasekhar on 3 February, the circular says: “It has been observed that some ministries/departments are undertaking surveys on certain sectors relating to their charge and also generating/disseminating data on the same.

“Such data sometimes differ from the data/estimates available in surveys undertaken by the National Sample Survey Organisation (NSSO) and Central Statistical Organisation (CSO) under the M/o (Ministry of) Statistics and Programme Implementation. You would agree that creating multiple official estimates of the same underlying variables is not advisable.”

MS Gill is currently the Cabinet Minister of Statistics and Programme Implementation.

Chandrasekhar’s circular says the ministries must ‘ensure strict compliance’ of the instructions.

The circular adds, “With a view to avoiding duplication of efforts and ensuring consistency between different sets of data and also to ensure reliability of data, it has been decided with the approval of the Prime Minister, that all steps should be taken to avoid duplication of effort and multiplicity of official data/estimates of the same underlying variables.”

The worst recent case of data causing embarrassment to the government was on the poverty estimates. The Arjun Sengupta committee, the National Commission for Enterprises in Unorganised Sector, said 77 percent Indians were living on Rs 20 a day.

The NC Saxena committee said 50 percent of India is poor. The World Bank said 41.6 percent. And then, the Suresh Tendulkar committee, which gave its report to the Planning Commission, said 25.7 percent Indians were poor. This is the Planning Commission estimate as well.

This has not been reconciled as yet, and such confusion affects government delivery systems.

Therefore, says Chandrasekar’s circular, “Where the ministries/departments still wish to collect data pertaining to aspects for which there are already official estimates prepared by the M/o Statistics and Programme Implementation, the reasons for collecting such data need to be stated clearly and the two efforts should be coordinated.

‘Further, any such data should be produced only with appropriate technical oversight, preferably by the National Statistical Commission. Also, the ministries/departments should invariably consult the Planning Commission before publishing any statistical data relating to the economic status of the population, section of the population or any other sector.

“As and when such data is published, there should be sufficient explanation for differences, if any, with the already available official data.”

In essence, the Prime Minister wants to sanitise data. This could trigger another controversy because poverty figures in India are the core of all government social programmes. Poverty alleviation is considered the default core duty of any elected government in India, given the widespread social deprivation among its citizens.

Riaz Haq said...

US and EU farm subsidies to their cotton growers are hurting Africa's poor. Here's a report on it:

West Africa rises up to end $31.4 bn rich world cotton subsidies

Dakar, 10 February 2011 – High-level West African political leaders are joining forces with a broad coalition of African and South American smallholder and global farmer organisations to launch a huge new offensive demanding the phasing out and elimination of rich world trade distorting subsidies in cotton.

The release this week (Wednesday 9th February) at the World Social Forum of a new updated version of the Great Cotton Stitch-Up report by Fairtrade reveals that in the nine years since the Doha Development Round was launched in 2001, the United States and the European Union paid out a staggering USD 31.4 BILLION in subsidies to its farmers so squeezing out 10 million West African cotton farmers from trading their way out of poverty.

In addition, the West African Economic and Monetary Union (UEMOA) is also prioritising and upgrading the cotton subsidy issue and will shortly be unveiling its own offensive in Brussels as the European Parliament prepare to vote on the €55 billion Common Agricultural Policy reform in June.

2011 is a crucial year for the global trading system. This summer the European Parliament will begin reform of the €55 billion Common Agricultural Policy subsidy regime, the US Congress begin work in framing a new Farm Bill while attempts to revive the stalled Doha Development Round culminate in a World Trade Organisation Ministerial, expected in November.

Kwame Banson, Fairtrade Africa Regional Coordinator for West Africa, comments:

‘This is the crunch year for rich-world subsidies, with the EU and US at a genuine crossroad. One way leads to more misery for African farmers, the other to fairer way of doing trade. This coalition demands that they take the right path because African farmers can no longer be the casualties of the politics of the North.’

Moussa Doubia, Small-hold Malian Cotton Farmer, speaking of the impact of competing against subsidised cotton, adds:

‘Sometimes I can’t sleep. Sometimes it’s hard and unbearable… The cotton price is not enough for farmers to cover our needs including school fees and health.’

The report’s launch comes as Mali Minister of Industry, Investment and Commerce, Ahmadou Abdoulaye Diallo confirmed his country is seriously considering taking the US to the WTO Disputes Panel Settlement over its USD 24.45 billion subsidies, potentially leading to retaliatory action against the US by suspending protection of US intellectual property. He also states Mali will veto the entire Doha Trade deal over the issue so further reigniting what is the most vivid example of trade injustice.

Riaz Haq said...

Is India too wealthy for British aid? asks the BBC:

Bihar children being fed under a government scheme More than a million children in Bihar suffer from severe malnutrition
Continue reading the main story
Related Stories

* How UK overseas aid will be spent
* 'More poor' in India than Africa
* Ignoring India's 'republic of hunger'

Britain's decision to give £280m ($457m) in annual aid to India for the next four years has prompted questions in the UK about whether India needs the aid these days. The BBC's Geeta Pandey travels to the northern state of Bihar to see where a sizeable chunk of the British money will be spent.

About two dozen children squat in a narrow lane separating mud and brick homes in Madhaopur village.

It's a hot sunny afternoon and the children sit facing each other, hugging the wall where a thin sliver of shade keeps them out of direct sunshine.

A woman puts steel plates in front of each child, another ladles out khichdi - a rice and lentil dish - onto each plate.

Within minutes, the chattering ceases and the children begin to eat hungrily, scooping out khichdi with their hands and putting it in their mouths.

Ideally, the children should be served inside the Anganwadi (government sponsored child development) centre, but the pokey, window-less room that passes for the centre is too small to accommodate them all.

The building provides pre-school education to children between three and six years and gives them one cooked meal a day to supplement their nutritional needs.

"Nearly 50% children here are malnourished," says Geeta Verma, who is part of the technical assistance team of DfiD (Department for International Development).
A baby being vaccinated in Bihar DfiD supports vaccination programmes in the villages of Bihar

"They are given a daily meal by the Anganwadi workers. It's a naturally fortified meal - for proteins we use lentils, for micronutrients, we use leafy vegetables," she explains.

Research has shown that the diet in Bihar leaves children with a 300-calorie deficit and this meal aims to bridge that gap.

"This meal provides each child with 300 calories and 10 grams of protein," Ms Verma says.

The team has helped prepare the menu and has been coaching the women in the important role nutrition plays in the physical and mental growth of their children.

In Madhaopur, DfiD is also supervising and assisting with immunisation of babies and has helped with a project to teach illiterate women.
'Too wealthy?'

Since being opened up in 1991, the Indian economy has grown rapidly. And at a time when most economies around the world are in recession, India's continues to grow at an enviable 9%. This has helped lift millions out of poverty.
Continue reading the main story
“Start Quote
Sangeeta Kumari

Bluntly speaking we are struggling for existence, we are trying to perform our best in the midst of a crisis. We have very poor infrastructure.”

End Quote Sangeeta Kumari Bihar government official

This has led to some in the UK wondering if India is too wealthy to qualify for receiving aid. They say the £280m could be put to better use in Britain where the economy is ailing and many services are being cut back.

Critics also point out that India has 69 dollar billionaires; it has its own space programme; plans to send a man to the Moon; spends billions of dollars annually on defence; and even has its own overseas aid programme.

But India has its areas of darkness too - according to World Bank estimates, 456 million live on less than $1.25 a day; tens of millions of children suffer from acute malnutrition; millions of Indians are illiterate; hundreds of thousands continue to die of totally preventable causes; and eight million children remain out of school.....

Mayraj said...
Is Growth Incomplete without Social Progress?
World Bank's Ghani says poverty rate is lower because economic growth rate is slower than China!
See: Vietnam growth rate. It has been less than India's. Yet Vietnam blows away India in poverty reduction.

The reason is lack of substantive land reforms:'
"Vietnam has already reduced the poverty rate from 60 percent in 1993 to less than 30 percent right in 2002 and just 10 percent currently."
Land reforms and impact on land use in the uplands of Vietnam and Laos

This man also needs to need the statements by activists highlighting rural blight! He's got a useless ivory town theory, that is belied by facts on the ground.
If this is what World Bank has for its poverty reduction experts, little wonder it has grown under its watch!.

Pavan said...

Did you notice the point about reduction in poverty in India between 1981 and 2005 from 60% to 40% but the absolute numbers grew from 420 million to 455 million! So much for percentages.

Riaz Haq said...

Here are summary and salient points of Anatol Lieven's Pakistan: A Hard Country:

In the past decade Pakistan has emerged as a country of immense importance. Large, heavily populated, strategically placed between Iran, Afghanistan and India, Pakistan has since its creation just over sixty years ago been pulled in several different, irreconcilable directions.

In the wake of Pakistan's development of nuclear weapons, Osama Bin Laden's presence in its unpoliceable border areas, its shelter of the Afghan Taleban, and the spread of terrorist attacks by groups based in Pakistan to London, Bombay and New York, there is a clear need to understand this remarkable and highly contradictory place.

Far from seeing Pakistan as the failed state often portrayed in the media, Lieven's extraordinary new book instead treats it as a viable and coherent state that, within limits and by the standards of its own region rather than the West, does work. Lieven argues strongly against US actions that would risk destroying that state in the illusory search for victory in Afghanistan.

This work is based on a profound and sophisticated analysis of Pakistan's history and its social, religious and political structures. Lieven has interviewed hundreds of Pakistanis at every level of society, from leading politicians and soldiers to village mullahs and rickshaw drivers. In particular, his examination of the roots of popular sympathy for the Taleban in Pakistan draws on the testimony of people whose views are rarely consulted by Western analysts.

1. For most of the years since 1947, Pakistan has had higher economic growth rates than did India. Pakistan does not have the same pockets of extreme poverty, or for that matter the extreme wealth. The level of economic equality in Pakistan is relatively high.

2. Charitable donations run almost five percent of gdp, one of the highest percentages in the world and this reflects the emphasis on alms-giving in Islam.

3. A good quotation from a businessmen: “One of the main problems for Pakistan is that our democrats have tried to be dictators and our dictators have tried to be democrats.”

4. Agriculture pays virtually no tax and the government lends lots of money to businesses and doesn’t seriously ask for it back. As a result Pakistan collects far less revenue than does India, even comparing areas of comparable per capita income. If Pakistan were a state of India, it still would be considerably richer per capita than India’s poorest regions, such as Bihar.

5. The Pakistani state is nonetheless a lot more stable than most people think. In part this is because of the conservative structure of kinship and landholder power in the country.

6. The main threats to the future of Pakistan have to do with ecology and water, not politics.

7. The end of the book has a very interesting discussion about how U.S. actions in Pakistan affect different coalitions, feelings of humiliation, relative status relationships, etc.

Definitely recommended, as are Lieven’s books on the Baltics and Ukraine.


Riaz Haq said...

World Bank is concerned about the failure of India's anti-poverty efforts, according to NY Times:

NEW DELHI — India spends more on programs for the poor than most developing countries, but it has failed to eradicate poverty because of widespread corruption and faulty government administration, the World Bank said Wednesday.

“India is not getting the ‘bang for the rupee’ that its significant expenditure would seem to warrant, and the needs of important population groups remain only party addressed,” John D. Blomquist, lead economist at the World Bank, wrote in a nearly 400-page study released Wednesday.

India spent 2 percent of its gross domestic product, or $28.6 billion last year, on social programs to alleviate and prevent poverty, the World Bank said, a higher percentage than any other country in Asia and about three times China’s spending.

The programs, central to the Congress party’s platform, include food distribution and health insurance initiatives that are supposed to reach hundreds of millions of households. The report was written at the “request of the government of India” and with full participation from various government bodies, the report said.

The World Bank on Wednesday recommended a radical overhaul of India’s social programs. “Marginal changes alone may not deliver the kind of safety net which a changing India needs for its poor and for its economy,” Mr. Blomquist wrote.

One of the primary problems, the World Bank said, was “leakages” — an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households.

Instead of distributing food, the government might be better off giving out food stamps or cash transfers that can be easily traced through technology, the World Bank said.

India, the world’s the second-fastest growing major economy, after China, has had an economic boom in recent years that is transforming urban areas and creating a new class of extremely wealthy people. But social problems, including poverty, disease and illiteracy, remain widespread.

About 455 million Indian citizens live on less than $1.25 a day, the World Bank’s poverty line. A United Nations study released last year found more people living below the poverty threshold in eight states in India than in all of sub- Saharan Africa.

Riaz Haq said...

Here's a Counterpunch Op Ed by Yasmin Qureshi on "Militarization of India":

India is today the world's largest importer of arms. These include fighter jet planes, missiles and radar systems for strategic partnerships and geo-political power. India is also investing in security and surveillance to combat foreign threats and resistance from its own people in places like the Kashmir valley, and the North East and tribal regions of Central India. This provides tremendous opportunity for multi-national corporations to sell and invest in India, a country marching ahead as an economic and military power.

A report from the Stockholm International Peace Research Institute's (SIPRI) March 14, 2011 revealed that India received 9 per cent of the volume of international arms transfers during 2006–10. The international consultancy firm KPMG estimates that India will sign military contracts worth $112 billion by 2016.

This year India increased annual defense spending by about 11.6 percent to $36 billion in order to modernize the armed forces to counter the military inflation and strategic threats posed by China's rapidly expanding military capabilities..

In sharp contrast, allocation for agri culture and allied activities was reduced by 2 percent and allocation of non-plan expenditures on all social services declined by 14 percent from approximately $7.8 billion in 2009-10 to $6.6 billion for 2010-11. The World Bank estimates that 80% of India's population lives on less than $2 a day, comparable to sub-Saharan Africa.

Corporate Diplomacy to Secure Arms Deals

With assistance from their governments, arms corporations in countries such as Russia, US, France, Britain, Sweden and Israel are competing to procure million and billion dollar deals with India.

Last year India saw an unprecedented series of diplomatic visits from head of states of nuclear and defense powers. Notably chief executives of major nuclear and defense corporations had escorted the head of states on their visits. British Prime Minister David Cameron's visit to India in July was followed by US President Obama's in November and by French President Nicolas Sarkozy's in December.

A $779 million contract was signed for 57 BAE Systems Hawk advanced jet trainers for the Indian military during Cameron's visit. Engine maker Rolls-Royce clinched a $280 million deal to supply engines for the jet trainers for the Indian air force and navy. Seven agreements in key areas such as defense, space and nuclear energy were signed during Sarkozy's visit.

US President Obama and Secretary of State Hilary Clinton's visits in 2010 were also about strengthening economic and strategic partnerships. Twenty deals totaling nearly $10 billion dollars in U.S. exports were signed during the President's visit. Following that visit, the US reformed its export control regime and removed key Indian defense and civil space entities from U.S. restricted lists to help boost high technology exports and allow for enhanced defense and space cooperation with India.

The close nexus of corporations and governments is evident from the resignation of Timothy J. Roemer as US Ambassador to India on April 28, 2011, soon after the announcement that two US corporations, Boeing and Lockheed Martin had lost the race for procuring a $10 billion contract to supply 126 fighter jets to the Indian Air Force. The US is still hopeful a four billion dollar sale of C17 aircraft will be finalized soon. French company Dassault's Rafale and the Typhoon from the Eurofighter consortium (representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica) have been shortlisted.

mahant kumar said...

dear sir,
i strongly disagree with your statement that "despite a booming economy and a $9 billion job creation program, india ranks poorly in poverty indicators"
the reason is that the data you have provided is of 2005, the year when the rural employment program was just passed.
the world bank data of 41.6% people earning $1.25 is of year 2005 as you can see it in this link:
As you can clearly see the most recent data available about india is of year 2005, and after that no estimation has taken place by world bank on india.
now lets come to multidimensional poverty index. though the report about it was published by UNDP in the year 2010, but the data they have used for india is of the year 2005. go to this link:
and then click the link marked as "source of data for the mpi in 2010". after downloading the PDF file you will find that the data used for india is of 2005.
so the argument that the massive investment in india for rural employment program( as you have shown in the graph) has failed to bring people out of poverty is a myth.those massive investment were made by goveronment after 2005.I hope after such huge investments made by goveronment of india for poverty reduction, when the next time estimation of poverty takes place, the situation would be better for india.

Riaz Haq said...

Mahant Kumar,

In spite of recent poverty declines with its rapid economic expansion, India still has higher poverty rates than Pakistan, according to a 2011 World Bank report titled "Perspectives on poverty in India : stylized facts from survey data" released in 2011.

Overall, the latest World Bank data shows that India's poverty rate of 27.5% is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Read more at:

Riaz Haq said...

Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Riaz Haq said...

Here's a Nepal Monitor report on MPI poverty in South Asia:

Among the 104 countries, Nepal ranks 82 in the Multidimensional Poverty Index (MPI) by Oxford Poverty and Human Development Initiative (OPHI) with UNDP support. Sri Lanka (32) tops South Asia followed by Pakstan (70), Bangladesh (73), India (74) and Nepal.

UNDP’s Human Development Report for this year, to be published in late October, will be based on this new MPI method. The new method incorporates 10 indicators of poverty, and these are clustered under three dimensions— education (years of schooling and child enrolment), health (child mortality and nutrition), and standard of living (electricity, drinking water, sanitation, flooring, cooking fuel, and assets).

UNDP’s earlier reports measured poverty in terms of survival, access to knowledge and decent standard of living (overall economic provisioning).

The latest MPI is based on surveys conducted on various countries between 2000 to 2007. Nepal’s statistics are from 2006.

Nepal is better positioned than Pakistan and India in terms of years of schooling for children and enrolments. Pakistan had 32.50 percent and India had 23.99 percent deprivation in the educational dimension whereas Nepal had 21.32 percent deprivation. Sri Lanka (6.26) and Bangladesh (18.70) fared better than Nepal and other countries in the region.

In the health dimension Nepal is better than the other surveys countries in the region—Sri Lanka (35.40 percent), Pakistan (36.35), Bangladesh (34.68), and India (33.53).

In the living standard measure Nepal was better than Sri Lanka (58.34) or Bangladesh (46.81), but worse than Pakistan (31.14) or India (41.33).

For the surveyed year 2006, Nepal’s MPI value was 0.350, the highest in the region. The MPI value reflects the percentage of people who are MPI poor and the average intensity of their poverty. Nepal’s Incidence of Poverty was 64.7 percent and her Average Intensity Across the Poor was 54.0 percent.

Slovenia, Czech Republic, Belarus, Latvia, Kazakhstan, Georgia, Hungary, Bosnia and Herzegovina, Serbia, and Albania, respectively, are the countries ranking in the top ten on the index for 104 developing countries. The surveyed countries have a combined population of 5.2 billion, which comprise 78 percent of the human total. The study reveals that a third of population in all surveyed countries combined live in multidimensional poverty.

Half of the world’s poor, according to the MPI, live in South Asia (51 percent or 844 million people). India, in particular, has more MPI poor people in eight of her states alone (421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal) than in the 26 poorest African countries combined (410 million). The overall figure for the entire of African developing countries is 28 percent (458 million).

Riaz Haq said...

In spite of recent poverty declines with its rapid economic expansion, India still has higher poverty rates than Pakistan, according to a 2011 World Bank report titled "Perspectives on poverty in India : stylized facts from survey data" released in 2011.

Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Riaz Haq said...

India's main planning body has said half a dollar a day is "adequate" for a villager to spend on food, education and health, according to the BBC:

Critics say that the amount fixed by the Planning Commission is extremely low and aimed at "artificially" reducing the number of poor who are entitled to state benefits.

There are various estimates on the exact number of poor in India.

Officially, 37% of India's 1.21bn people live below the poverty line.

But one estimate suggests the true figure could be as high as 77%.

The Planning Commission has told India's Supreme Court that an individual income of 25 rupees (52 cents) a day would help provide for adequate "private expenditure on food, education and health" in the villages.

In the cities, it said, individual earnings of 32 rupees a day (66 cents) were adequate.

The Planning Commission was responding to a direction from the court to update its poverty line figures to reflect rising prices.

India has been struggling to contain inflation which is at a 13-month high of 9.78%.

Many experts have said the income limit to define the poor was too low.

"This extremely low estimated expenditure is aimed at artificially reducing the number of persons below the poverty line and thus reduce government expenditure on the poor," well-known social activist Aruna Roy told The Hindu newspaper.

The Planning Commission also told the court that 360 million Indians are now being supplied with subsidised food and cooking fuel through the network of state-owned shops.

A World Bank report in May said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.

Riaz Haq said...

Malnutrition in India is worse than in sub-Saharan Africa, according to a news report in The Guardian:

A report out today warns that even in a fast-growing economy like India, failure to invest in agriculture and support small farms has left nearly half the country's children malnourished, with one fifth of the one billion plus population going hungry.

ActionAid, which published the report ahead of next week's summit in New York to discuss progress on the millennium development goals, says hunger is costing the world's poorest nations £290bn a year – more than 10 times the estimated amount needed to meet the goal of halving global hunger by 2015.

India now has worse rates of malnutrition than sub-Saharan Africa: 43.5% of children under five are underweight and India ranks below Sudan and Zimbabwe in the Global Hunger Index. Even without last year's disastrous monsoon and the ensuing drought and crop failures, hunger was on the increase.

India's prime minister, Manmohan Singh, protested, saying the court had crossed the line into policy-making and warning that distributing free food to the estimated 37% of the population living below the poverty line destroyed any incentives for farmers to produce. The court stood firm. It was an order, not a suggestion, the judges said.
The poker is glowing red hot in the flames of the burning wood. Suklal Hembrom holds a leaf against his stomach and warily eyes the older man sitting on the other side of the fire. Suddenly Thakur Das takes hold of the poker and lunges towards the boy's stomach.

Everyone in the village knows what should happen next. The child will scream loudly as the flesh begins to blister. Held down, he will writhe in agony. Again and again, the poker will jab at his belly. The more the child screams, the happier everyone will be, because the villagers of Mirgitand in India's Jharkhand state believe the only way they can "cure" the distended stomachs of their famished children is by branding them with pokers.

Das sees nothing wrong with the procedure. Nor does anyone in the village – most have scars of their own. Even though some children have died, the villagers continue because the alternative – providing enough nutritious food to sustain their children or paying for medical treatment – is simply not an option. In common with millions of others in the world's 11th largest economy, they face a daily battle to put even the most basic meal on the table.

Riaz Haq said...

India fares worst in terms of low birth weight and underweight children, and under-five infant mortality compared to Brazil, Russia and all South Asian neighbors, says BBC's Soutik Biswas:

Will the proposed law to provide cheap food to more than half of India's people eliminate hunger, the most shameful scourge of an aspiring superpower?

The jury is still out on how the $19bn (£12bn) scheme will work, as is the case with similar big-ticket welfare schemes launched by what many believe is an endemically weak and corrupt state.

But there is little doubt that India needs to fight malnutrition on a war footing, and the food security scheme may well be its last chance to redeem itself.

Many believe that it does not behove a country which never tires of gloating about its red hot economic growth to have millions of malnourished and starving people.

The facts on the ground are startling. India has the largest number of malnourished children in the world, a rate worse than the average in Africa.

Nearly half of India's children under three are malnourished. More than half of the tribes' children are underweight and stunted.

India fares worst in terms of low birth weight and underweight children, and under-five infant mortality compared to Brazil, Russia and all South Asian neighbours.

India also has the highest number of Vitamin A deficient children in the world: nearly 6% of the children suffer from eye problems related to the deficiency. Of the 37m people in the world who are blind, about 15m are from India. More than 320,000 children suffer from avoidable blindness.
Then there are India's notoriously fickle public distribution system shops aimed at providing food security to people. Over 500m people are supposed to benefit through a gigantic distribution network of half a million fair-price shops supplying cheap food grains.

Here too, the results are mixed and contested. In many states, it has failed to make cheap food grains available to the poor. Theft of supplies, fraudulent beneficiaries and hoarding by the shop-owners is not uncommon.
Cart before horse?

So will the latest food security scheme aimed at providing subsidised food grains to 75% of the rural population and half of the urban households work?

There are many economists who wonder how India will cough up the funds to finance the scheme which will see the country's food subsidy bill climb to $19bn from $13bn. The government insists money will not be a problem.

There are also questions about how beneficiaries will be identified and targeted in a transparent manner in a country where there are different official estimates of the poorest of the poor - from 37% to 77% of the people, depending on whom you believe.

India's state-run cold storage system is shambolic, so where is the guarantee that some 65m tonnes of food grains procured from farmers for distribution for the scheme - up from 55m tonnes presently - will not rot before reaching the beneficiary? How can the food grains be distributed through the leaky public distribution system shops without reforming them?

So is India again putting the cart before the horse? Without reforming its laws and public institutions, welfare schemes with the best intentions run the risk of floundering.

For the scheme to work, the government will need to target beneficiaries properly and revamp the distribution system. The public distribution system, for example, could be made accountable by issuing smart cards to beneficiaries to eliminate bogus cards and fraudulent withdrawal.

If the food security scheme does not work, economists believe, India is doomed to remain a hungry republic. It is already one of the fast-growing economies with the hungriest people in the world. And it can get worse.

Riaz Haq said...

Here's Russian analyst Anatol Karlin on India's prospects and its comparison with China:

It is not a secret to longtime readers of this blog that I rate India’s prospects far more pessimistically than I do China’s. My main reason is I do not share the delusion that democracy is a panacea and that whatever advantage in this sphere India has is more than outweighed by China’s lead in any number of other areas ranging from infrastructure and fiscal sustainability to child malnutrition and corruption. However, one of the biggest and certainly most critical gaps is in educational attainment, which is the most important component of human capital – the key factor underlying all productivity increases and longterm economic growth. China’s literacy rate is 96%, whereas Indian literacy is still far from universal at just 74%.
The big problem, until recently, was that there was no internationalized student testing data for either China or India. (There was data for cities like Hong Kong and Shanghai, but it was not very useful because they are hardly representative of China). An alternative approach was to compare national IQ’s, in which China usually scored 100-105 and India scored in the low 80′s. But this method has methodological flaws because the IQ tests aren’t consistent across countries. (This, incidentally, also makes this approach a punching bag for PC enforcers who can’t bear to entertain the possibility of differing IQ’s across national and ethnic groups).
Many Indians like to see themselves as equal competitors to China, and are encouraged in their endeavour by gushing Western editorials and Tom Friedman drones who praise their few islands of programming prowess – in reality, much of which is actually pretty low-level stuff – and widespread knowledge of the English language (which makes India a good destination for call centers but not much else), while ignoring the various aspects of Indian life – the caste system, malnutrition, stupendously bad schools – that are holding them back. The low quality of Indians human capital reveals the “demographic dividend” that India is supposed to enjoy in the coming decades as the wild fantasies of what Sailer rightly calls ”Davos Man craziness at its craziest.” A large cohort of young people is worse than useless when most of them are functionally illiterate and innumerate; instead of fostering well-compensated jobs that drive productivity forwards, they will form reservoirs of poverty and potential instability.

Instead of buying into their own rhetoric of a “India shining”, Indians would be better served by focusing on the nitty gritty of bringing childhood malnutrition DOWN to Sub-Saharan African levels, achieving the life expectancy of late Maoist China, and moving up at least to the level of a Mexico or Moldova in numeracy and science skills. Because as long as India’s human capital remains at the bottom of the global league tables so will the prosperity of its citizens....

Anonymous said...

my riaz haq instead of thinking and writing so about india why dont you concentrate on pakistan only.

Riaz Haq said...

Here's an AP report on Benazir Income Support program in Pakistan:

Clutching photocopied ID cards in bony fingers, a roomful of Pakistan's poorest women sit on gray plastic chairs and wait in silence for something many have never experienced: a little bit of help from the government.

It comes in the form of a debit card that is topped up with the equivalent of $30 every three months, enough to put an extra daily meal on the table, buy a school uniform or pay for medical treatment in a country where soaring food and fuel costs are hurting millions who already live hand-to-mouth.

The program is something of a success story for a government widely seen as corrupt and inefficient, as well as for international donors that help implement and fund it. But the very need for the scheme highlights the poverty stalking a country whose stability is seen as key to the fight against Islamist extremism.

Other cash-transfer programs in Pakistan have been plagued by graft and allegations that only supporters of the party in power received the funds. Many feared this program, named after Benazir Bhutto, the late wife of President Asif Ali Zardari, would go the same way.

But that hasn't happened, at least not significantly. The Benazir Income Support Programme is modeled on similar efforts in Africa and South America, part of a quiet revolution in the way countries and development agencies are helping the poor. Initial concerns that recipients would fritter away the money have proven unfounded, and giving cash is now accepted as a vital and cost-effective aid tool.

"I spend the money on my kids, what else would I do?" said Rifat Parveen, a mother of five who sometimes has to serve only bread and boiled chili peppers for the evening meal. "Even if a poor person gets 10 rupees (5 cents), he or she will be grateful."

When a woman is called, she goes to a room where her identity is checked against an electronic database and her thumb print taken electronically. A bank employee then gives her the card — and a crash course in how to use it — before she returns to her village.

As they do elsewhere in the world, women in Pakistan must receive the money on behalf of their families because research shows they spend it more responsibly than men do. They must also first obtain a valid identity card to be eligible. Both requirements have been credited with pushing women, discriminated against in Pakistan, a little into the mainstream.

Riaz Haq said...

Here's The Economist on ending poverty:

IN HIS inaugural address in 1949 Harry Truman said that “more than half the people in the world are living in conditions approaching misery. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of those people.” It has taken much longer than Truman hoped, but the world has lately been making extraordinary progress in lifting people out of extreme poverty. Between 1990 and 2010, their number fell by half as a share of the total population in developing countries, from 43% to 21%—a reduction of almost 1 billion people.
Starting this week and continuing over the next year or so, the UN’s usual Who’s Who of politicians and officials from governments and international agencies will meet to draw up a new list of targets to replace the Millennium Development Goals (MDGs), which were set in September 2000 and expire in 2015. Governments should adopt as their main new goal the aim of reducing by another billion the number of people in extreme poverty by 2030.

Nobody in the developed world comes remotely close to the poverty level that $1.25 a day represents. America’s poverty line is $63 a day for a family of four. In the richer parts of the emerging world $4 a day is the poverty barrier. But poverty’s scourge is fiercest below $1.25 (the average of the 15 poorest countries’ own poverty lines, measured in 2005 dollars and adjusted for differences in purchasing power): people below that level live lives that are poor, nasty, brutish and short. They lack not just education, health care, proper clothing and shelter—which most people in most of the world take for granted—but even enough food for physical and mental health. Raising people above that level of wretchedness is not a sufficient ambition for a prosperous planet, but it is a necessary one.

The world’s achievement in the field of poverty reduction is, by almost any measure, impressive. Although many of the original MDGs—such as cutting maternal mortality by three-quarters and child mortality by two-thirds—will not be met, the aim of halving global poverty between 1990 and 2015 was achieved five years early.

The MDGs may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution.

Poverty rates started to collapse towards the end of the 20th century largely because developing-country growth accelerated, from an average annual rate of 4.3% in 1960-2000 to 6% in 2000-10. Around two-thirds of poverty reduction within a country comes from growth. Greater equality also helps, contributing the other third. A 1% increase in incomes in the most unequal countries produces a mere 0.6% reduction in poverty; in the most equal countries, it yields a 4.3% cut.

China (which has never shown any interest in MDGs) is responsible for three-quarters of the achievement. Its economy has been growing so fast that, even though inequality is rising fast, extreme poverty is disappearing. China pulled 680m people out of misery in 1981-2010, and reduced its extreme-poverty rate from 84% in 1980 to 10% now.

That is one reason why (as the briefing explains) it will be harder to take a billion more people out of extreme poverty in the next 20 years than it was to take almost a billion out in the past 20. Poorer governance in India and Africa, the next two targets, means that China’s experience is unlikely to be swiftly replicated there......

Hopewins said...

"New Index Finds Indians Poorer Than Africans and Pakistanis"

"New" Index? What is "new" here? India has ALWAYS been poorer than sub-Saharan Africa and our country for the whole period that the World Bank has been keeping records (i.e. Post-colonial period). This should be obvious. This is not even news.

The interesting part, however, is something else about how the economies of SSA, India & Pakistan are STRUCTURED......

This is the REAL difference. If you don't understand this, you have not understood the basics of macroeconomics. Nothing is more fundamental to the future than this.

Suppression, censorship, evasion, obfuscation, fudging, promotion and data-juggling are all very well on the margins, but they do not change the essential facts on the ground. Regardless of whether we like it or not, the reality remains the same. The sooner we accept it and deal with it, the better it will be.

Riaz Haq said...

Eradicating poverty in India requires every person having access to safe drinking water, sanitation, housing, nutrition, health and education. According to the MPI, out of its 1.2 billion-plus population, India is home to over 340 million destitute people and is the second poorest country in South Asia after war-torn Afghanistan. Some 640 million poor people live in India(40% of the world’s poor), mostly in rural areas, meaning an individual is deprived in one-third or more of the ten indicators mentioned above (malnutrition, child deaths, defecating in the open).

In South Asia, Afghanistan has the highest level of destitution at 38%. This is followed by India at 28.5%. Bangladesh and Pakistan have much lower levels. The study placed Afghanistan as the poorest country in South Asia, followed by India, Bangladesh, Pakistan and Nepal.

A total of 1.6 billion people are living in multidimensional poverty; more than 30% of the people living in the 108 countries analysed (compare that with a global figure of 1.2 billion in income poverty)
Of these 1.6 billion people, 52% live in South Asia, and 29% in Sub-Saharan Africa. Most MPI poor people – 71% – live in Middle Income Countries (I won’t try and compare this with regional income breakdowns, as the MPI doesn’t cover all countries yet)

Riaz Haq said...

Interpreting India's low HDI rank

HDI essentially is a composite index that integrates three basic dimensions of human development: ability to lead a long and healthy life; ability to acquire knowledge and ability to achieve a decent standard of living. The first dimension is captured by life expectancy at birth. Mean years of schooling and expected years of schooling combined capture the second, while Gross National Income (GNI) per capita (PPP in US$) captures the last dimension. Each dimension is then quantified as an index, calculated as the ratio between (Actual Value – Minimum Value)/(Maximum Value – Minimum Value). Note that the minimum and maximum values are fixed values (boundary limits), same for all the countries. These three indices are then aggregated and their geometric mean is taken as the HDI score for a particular country.

Let us take an example. For the year 2016, the Minimum Life Expectancy was fixed as 20 years and Maximum 85 years. India’s life expectancy was 68.3 years. Therefore, the Health Index for India would be computed as (68.3 – 20) / (85 - 20) = 0.743. Using a similar approach, the other two indices – education and income would be computed. Finally, the HDI score for India would be the geometric mean of all three indices. And this score would determine India’s relative rank across several countries. A higher HDI rank should ideally reflect better human development opportunities. Similarly, a year on year increase in HDI rank, would reflect an increase in a country’s relative performance.

However, there are several issues that complicate this. First, the HDI computation methodology itself keeps changing. As can be seen in the table (inset), earlier, Health index was measured by life expectancy at birth; Education index by a combination of adult literacy rate and gross school enrolment rates; and Income index by GDP per capita adjusted for PPP (in US$). Except the health index, methodology for computing the other two indices has now changed significantly. Second, simple arithmetic mean was used to compute HDI scores earlier. Now, geometric mean of each index provides the HDI score. Third, the number of countries for which data is collated also changes year on year. In 2010, there were 169 countries. This number increased to 188 in 2016. Fourth, there have been issues related to timelines of input data. For example, Life expectancy at birth for HDR 2013 corresponded to data for the year 2011. The HDR 2016, on the other hand, used the data for 2015. Especially for the social sectors, there are significant time-lags in data. Finally, and possibly the most serious concerns have been raised over the usage of only three dimensions and giving them equal weights while computing HDI. Experts argue that crucial variables such as political voice, democratic freedom, social connections and relationships, environmental sustainability, and economic/physical security are completely left out. On the other hand, equal weightage to all three indices pulls HDI score of countries like India down. Given the huge population base, India gets consistently low scores on GNI per capita. In fact, on this particular index, India’s score was very similar to that of Pakistan and Congo, but less than that of Iraq.

Riaz Haq said...

Global Multidimensional Poverty Index 2017

The 2017 global Multidimensional Poverty Index (MPI) provides a headline estimation of poverty and its composition for 103 countries
across the world. The global MPI measures the nature and intensity of poverty, based on the profile of overlapping deprivations each poor
person experiences. It aggregates these into meaningful indexes that can be used to inform targeting and resource allocation and to design
policies that tackle the interlinked dimensions of poverty together.
Sabina Alkire and Gisela Robles

• Half of the MPI poor people live in destitution.
• In six countries and 117 subnational regions, 50% or
more of people are destitute.
• Most of the highest levels of destitution are found in SubSaharan
• Pakistan has more destitute people – 37 million – than
East Asia and the Pacific (26 million) or the Arab States
(26 million).
• India has more destitute people (295 million) than SubSaharan
Africa (282 million).