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Desai Op-Ed cites need to rethink social safety nets

A society in transition must change its approach to poverty from one established decades back

Faculty Associate Sonalde Desai, a Senior Fellow at India's National Council of Applied Economic Research (NCAER), and Amit Thorat, Assistant Professor of Economics at Jawaharlal Nehru University write that the grand narratives of the Indian Right and Left often miss the changing face of poverty in India. They point out, in an opinion piece in The Hindu, that anti-poverty policies have used data from Below Poverty Line (BPL) censuses taken every 10 years. India Human Development Survey panel data showed a picture of poverty which is dynamic - including those who become poor.

"Results from the survey show that if BPL cards had been handed out in 2004-05 on the basis of the household’s average consumption expenditure, 25 of the 38 Indians who would have received these cards in 2004-05 would have been out of poverty by 2011-12. On the other hand, of the 62 Indians who were not eligible to receive BPL cards in 2004-05, nine became newly poor in 2011-12. Thus in 2011-12, 66 per cent of the BPL card-holders would have already moved out of poverty, while 40 per cent of the poor would not have had a BPL card," they write.

After a discussion of the challenges, the authors suggest an ideology-free approach in three categories: "First, provision of back-up manual work at below market wages to those who are able to work; second, provision of insurance against catastrophic events such as health-care emergencies or crop failure that push people into poverty; third, provision of cash support, say in the form of old age pension, to people who are no longer able to work."

See the complete article in The Hindu.