We called him 'Bapu' and he called us 'Bapu' too! Every time we visited Hanuman Sarange's farm, Bapu would greet us "Ram Ram Bapuuu" with a faint smile on his wrinkled face. A few months passed like this and when we got some time alone, I asked bapu about his life and how he ended up with his brother. He started talking, looking away in void, as if his life story was being projected on the cloudy monsoon sky.

Bapu had 2 acres of farmland in the nearby village Dongargaon. His only son migrated to Adilabad (some 250 km away) after marriage, to work in a textile mill as a worker. Bapu and his wife managed the farm. Some 10 years ago, Bapu fell in a dry well and fractured his hip bone. They took him to a government hospital but there was no doctor in sight. On going to a private hospital, the doctor said he needed surgery which would cost him Rs. 50,000, thrice his annual income. He contacted his son for help but he didn't respond. Bapu did not get any treatment and his left leg became useless. The disability made him unfit for field work and he started giving out his farm for sharecropping, which halved his already meagre income. In 2010, his wife passed away. The son didn't even attend his mother's funeral fearing he would have to take Bapu with him.  "All I am waiting now is death. It would end my sufferings," concluded bapu with moist eyes.

Death finally blessed bapu and relieved him of his pains in January this year. 

While Montek Singh Ahluwalia and Co. were sipping green tea and deliberating on 'Who is Poor?', Bapu was declined any pension meant for elderly handicaps because the maximum daily expense for such benefits is Rs. 11 per person! (in rural areas, Rs. 17 per person for their urban counterparts) So, if a rural elderly widow with cataract in her eyes earns Rs. 12 per day, she is not so poor as to need the pension of Rs. 200 per month. Well Done Mr. Ahluwalia. India has less of those filthy poor now, because you've just broomed a few million under the carpet.

The predicament of poverty is not new. The question of defining poverty has been the favorite pastime of many economists. Here are a few definitions of poverty and the number of 'Poor' Indians according to these definitions (table 1)

According to a World Bank report, "The number of people living below a dollar a day [in India] is down from 296 million in 1981 to 267 million people in 2005. However, the number of poor below $1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This the biggest challenge facing India today." This strengthens my theory that the high-profile policymakers work on the same principle (and gets paid handsomely) that we followed in our college laboratory (and got thrashed):  'Don't do any experiment at all! Just  set the desired results and back-calculate the necessary observations.' I can imagine Mr. Ahluwalia working overtime charged by a cappuchino and Russian salad, to lower the poverty line just enough.

The result? India suddenly has 7.3% (85.6million) less poor 'entities'. India can, without any guilt, continue to Shine and the IPL cheer-girls can carry on their tamasha while the rest of India fights with these shameful facts:

  • On the Hunger and Poverty Index, India ranks 134 out of 182 countries.
  • On the World Hunger Index, India is proudly positioned 62 amongst 81 countries (Nepal ranks 58 while Ethiopia 60).
  • 60% of Indian children are wasted, stunted, underweight or a combination of the three.
  • 9% of children between 6-35 months of age are anaemic.
  • Only 20% of Indian girls complete 10years of education with over 41% with ZERO education.
  • 44% girls and 30% boys are married before the legal age
  • While the global poverty has reduced by 38% between 1990 and 2005, India's poverty decline was only 19% in the same period.
How we define poverty does not matter. What we do with it does. The failure to eliminate it is wonderfully explained by Montaigne when he says, "Poverty of goods is easily cured, poverty of soul, impossible." I think we'll have to enrich our souls before thinking of poverty eradication. Until then, let's continue playing with the poverty line.

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Tags: development, economics, ethics, poverty

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Comment by David Harold Chester on July 1, 2012 at 8:51am

Bapu was the popular name for Mohatma Gandi too, remember.....

The exact definition of poverty is not the most significant thing about it. Poverty is caused by a lack of opportunity for the poor people to earn a decent wage. (One is inclined to be cynical and to claim that it must be that the gods hate the poor, otherwise why else should they be made so wretched?) So we should be examining the working opportunities and how they are managed. Whilst education is important here, the basic lack of opportunities to earn are due to a failure to obtain the sole vital factor in production, namely access to land. Land tenure or management and its use will be discussed below.

You will recall that Adam Smith wrote in 1867 ("The Wealth of Nations") that land, labour and capital are the three factors needed for production to commence. Land is absolutely vital here, since the labour is only waiting for a chance to work and the capital or investment needed to start work (however inefficiently) can be the first kind of product that is made after collecting or constructing a simple few hand tools (even stone-age men needed capital).

But when useful land is held out of use or the only land available is so far away or of such poor quality as to make its use not worthwhile, then the useful land which is available and which is not being used is a wasted opportunity.

Land monopolists and speculators in its value know all about this. They would rather wait for the growth of the population and the expenditure of the tax-payers money on improving the surroundings and thereby raise the productivity and value of their holdings, before it is allowed to be sold or used. By holding land out of use the competition for what is available drives up its price and the amount of ground-rent that land owners can charge tennents. This has the effect of reducing the demand for the goods produced on that land and as a result fewer people need to be employed in production. Thus speculation in land values is a double-edged weapon working against the poor. 

It should be clear that should the government decide to try to relieve poverty by providing better education or public health conditions or better communications etc., all these things will not help the poor in the way that they need. Most of these improvements will simply drive up the productivity of the land and make it even more worthwhile to speculate in! This is an unexpected result. How many do-gooders think that the cause of poverty is due to the poor living conditions? This may be apparent amongst the poorer communities but it is not the cause of their poverty.

Instead of making local improvements to the infrastructure, the way to help the poor is to change the way that land is managed and to allow this gift of nature to be justly shared. The ideal way of doing this is by introducing a tax on land values instead of on incomes, purchases and investments in durable capital, such as in buildings and machinery. This chgange should be introduced gradually so that the present day investment in land values can be transferred into durable capital.

When there is no advantage to be had by speculating in land values, the cost of access to land will fall and more useful land will become available. Then the opportunities for working on the land will grow and poverty will become less. This theory of land values applies to both rural and urban land where speculation in its value is rife. The idea was first proposed by the Americal economist Henry George more than 130 years ago in his seminal book "Progress and Poverty". This book is still in print having sold more than 3 million copies, yet those who would eliminate poverty are not aware of it. I would expect these ideas to be one of the major policy ones of the Carnegie Council because the ethics of the social justice that would be created by Land-Value taxation, should be absolutely vital to making ourselves a better world. 

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