Is It Essential to deifine Poverty line ?

When India ceded from British Empire the economic condition of India was in Doldrums .Majority of the population in India were poor, who could were not even afford two square meal a day.  Government of India adopted a mixed economy, to prevent greedy capitalist exploiting the poor.  Further the preamble of constitution was amended and the word “socialist” was added to reflect the approach of nation towards the poor. So as a socialistic Nation government launched poverty alleviation schemes to safeguard the poor of nation. Government of India used Poverty Line as an economic benchmark to identify individuals and households in need of government assistance and aid. People who are below this threshold are considered as people living Below Poverty Line.

            Over years governments introduced populist schemes to fortify their vote banks. As a result of excessive subsidy India almost went to verge of collapse in 1991. IMF and World Bank assisted India on a commitment that India would limit all its subsidies and non productive spending.  Government started to curtail target population for all its schemes. For example Public Distribution System (PDS) was revamped to Target public Distribution system (TDPS) the earlier catered to all Indians where as latter catered only to people whose economic status is low. This change in approach of government reinforced the importance of poverty line,

            Recent statistics show that more than 30% of people in India live on less than a dollar a day. How can these people afford sky rocketing food inflation and health care service prices. Some studies also state that poor are being pushed into poverty traps to repay the loans they take to meet their day to day necessities. To fight back and improve their economic status government role is indispensable.

With LPG reforms brought in the role of government is now more a welfare state. Government cannot cover all its citizens under its schemes as its resources are limited. Subsidies have become an over burden for government once again. In current scenario with growing fiscal deficit Government is rethinking on subsidy schemes. But subsidizing basic necessities for BPL people is indispensable for government. For example to ease government subsidy burden deregulated subsidy on petrol but diesel and LPG are still in subsidy basket as any hike in these prices will have direct impact on 30% population.

 Rajeev Gandhi stated that only 15 paisa of every 1 rupee spent by government is reaching people. It is known that subsides are being misused by the people who are not entitled for it .If government can plug all these leaks it can use the funds to provide more assistance to poor people of this nation. Government has come up with ambitious AADHAAR project to eliminate leaks by direct cash transfer beneficiaries.

As Jeffrey D. Sachs said “The key to ending extreme poverty is to enable the poorest of the poor to get their foot on the ladder of development”. This can be achieved only by identifying poor and assisting them to climb up the ladder.