Still at the bottom

They have divided the world’s poor into three groups, working on the premise that the severity of poverty is not the same for people at the lowest rung of a dollar a day: subjacent poor ($0.75-1 per day), median poor ($0.5- 0.75) and ultra poor (less than $0.50).

In India, those who live under 50 cents a day (roughly Rs 20 a day), are 17.5 million. Their numbers did fall from 34 million in 1990 to 17.5 million now. But these falling figures do not tell the whole story.

The economists put forward a scenario: what would have happened if everyone’s income went up by the same amount with the underlying income distribution remaining the same. The results showed that the ultra poor performed worse than the other two categories of poor. “They are the hardest hit,” said Akhter Ahmed, lead author and senior researcher at IFPRI.

Those living between 75 to 50 cents a day, did the best. The report says that this is not the case in the rest of Asia, specially East Asia. “In East Asia, all groups moved up equally. It is not that difficult,” said Ahmed. This clearly points to a need for a rethink on the way policies for the poor are designed and implemented on the ground.

So what is the problem in India? “It is a question of coverage and targetting. The most vulnerable are the SC/STs but also pockets in the general population where developmental efforts are not reaching,” he explained.

Social exclusion perpetuates poverty in India, and may be one of the main reasons behind this unique trend. In Uttar Pradesh, a recent study of Indian castes showed how a history of social disabilities may have persistent effects on an individual’s earnings. When caste was hidden, low-caste and high-caste students performed equally well on tests, but when caste was announced, low-caste groups performed less well by 23 percentage points. This was not because of lower self-confidence on the part of lower-caste students, but because low-caste children anticipated that when their caste was known, they would be treated prejudicially.

In Bangladesh, the situation is different. They are doing badly on reducing poverty: it has fallen only by one percentage point in the last decade or so. The report finds that natural disasters like floods take a heavy toll on Bangladesh’s poor. But out of the three groups, their ultra poor fared better, suggesting that the severity of poverty declined in the country. Herein lies a lesson for India’s policymakers.

“In Bangladesh, the initial reductions in poverty at the beginning of the 1990s were offset by increases in all three types of poverty during the middle of the 1990s. However, all poverty rates have fallen since the end of the 1990s. In India, the medial poor fared better than the subjacent poor and the ultra poor (marginally),” says the report.

The report also goes to explore the connection between poverty and hunger. Because undernourished people are less productive and child malnutrition has severe and permanent consequences for physical and intellectual development, poverty and hunger can become entwined in a vicious cycle.

Previous work by economists has shown that India’s malnutrition has a lot to do with the status of women in society. Despite the remarkable improvement in child malnutrition in South Asia, the region still has the highest prevalence of underweight in children in the world.

“The need of the hour was to look at community-based interventions rather than individual ones. Working with men, community programmes could be a way out to deal with this logjam,” said Ahmed.

It is not just welfare schemes but interventions like those that aim to address exclusion of groups, child malnutrition, lack of education and low assets are essential to help the poorest find an exit route from poverty.