Rich or poor - Let merit decide
It is time the demarcation of rich and poor became nuansed. Let India begin the cause of demarcating the deserving rich and the undeserving poor. Let us bridge the gap between these two. That will be true progress.
THE RICH and poor are defined by a demarcating line, called the poverty line or poverty threshold, which, in general terms, refers to the level of income deemed necessary to achieve an adequate standard of living in a given country. A measure of absolute poverty quantifies the number of people below a poverty threshold. For the measure to be absolute, the line must be the same in different countries, cultures, and technological levels. Such an absolute measure should look only at the individual's power to consume and it should be independent of any changes in income distribution.
Such a measure is possible only when all consumed goods and services are counted and when Purchasing Power Parity-exchange rates are used. The intuition behind an absolute measure is that mere survival takes essentially the same amount of resources across the world and that everybody should be subject to the same standards if meaningful comparisons of policies and progress are to be made. Notice that if everyone's real income in an economy increases, and the income distribution does not change, absolute poverty will decline.
In the context of India, it is expected that as against 28.5 per cent of the Indians falling below the Poverty Line in the present time, the number will soon go up to 38 percent. At present, as per standards laid down in 1998 for the determination of poverty, an urban family (of five) earning Rs.2200 per month or less and a rural family (of five) earning Rs.1650 or less is poor. But according to the new standards, these monthly incomes, both of the urban and rural areas, will be raised respectively to Rs. 3000 and Rs.2250. This would raise the number of people below the poverty line. While urban poverty will increase slightly from 26 percent to 28 percent, rural poverty would jump from 30 percent to 46 percent. The new standards of the Planning Commission would consider more parameters for assessing poverty. Earlier a family was called poor if did not have the required income to buy sufficient food containing a minimum number of calories (2100 for urban areas and 2400 for rural areas) per day. Now, the minimum income required to rise above poverty, apart from food, would also depend on expenditure on education, health and sanitation. There will be no distinction between urban and rural households as far as the calorie intake is concerned.
This revised measurement of poverty will surely increase the number of people below the poverty line, but there is a silver lining too in terms of the provision of education, health, and sanitation facilities to the poor to ameliorate their lot. In case the measurement also accounts for many other socio-economic facilities, then the poverty line will further move up, and may be the number of poor people (in the new sense) will reach say up to 70 or even 80 percent. The Government has, therefore, to work out an optimal trade-off between the various parameters to estimate the poverty line, and its level. More are the parameters, more upwards would is the poverty line, and vice versa. The Government should follow the international standard for determining the level of the poverty line.
It is also clear that, once the number of people below the poverty line becomes more, the number of people above the poverty line becomes less, and once the number of people below the poverty line becomes less, the number of people above the poverty line becomes more. In other words, there is an inverse relationship between the number of poor people and the number of the rich people in any country.
The rich people can be categorized into poorest rich (just above the poverty line), plain rich (much above the poverty line), and super rich (a lot above the poverty line), and the remaining people are the poorer lot, some of whom are down below the poverty line, and others are closer to the poverty line.
There is another categorization: rich people (of all categories as mentioned above) are either deserving or non-deserving. Deserving rich people are those who have worked hard to accumulate wealth and income, and undeserving rich people are those who amass huge wealth and income through nefarious, illegal, and even immoral means and also through their involvement in “rent-seeking” activities. Likewise, poor people can also be classified as deserving poor and undeserving poor. Deserving poor people are those who value their self-esteem and honour and work hard to make their living, and undeserving poor people are those who depend on others in various ways like begging and so on. Such people will always be designated as poor no matter how mush support is given to them. In developing countries and also in India, there is no dearth of undeserving rich and undeserving poor people. It is quite true that all the people of any country can never be rich in the true sense of the term, but some attempts can be made so that none of the countries have either undeserving rich, or undeserving poor people. Let the beginning for this social cause be initiated in India!
In the context of India, it is expected that as against 28.5 per cent of the Indians falling below the Poverty Line in the present time, the number will soon go up to 38 percent. At present, as per standards laid down in 1998 for the determination of poverty, an urban family (of five) earning Rs.2200 per month or less and a rural family (of five) earning Rs.1650 or less is poor. But according to the new standards, these monthly incomes, both of the urban and rural areas, will be raised respectively to Rs. 3000 and Rs.2250. This would raise the number of people below the poverty line. While urban poverty will increase slightly from 26 percent to 28 percent, rural poverty would jump from 30 percent to 46 percent. The new standards of the Planning Commission would consider more parameters for assessing poverty. Earlier a family was called poor if did not have the required income to buy sufficient food containing a minimum number of calories (2100 for urban areas and 2400 for rural areas) per day. Now, the minimum income required to rise above poverty, apart from food, would also depend on expenditure on education, health and sanitation. There will be no distinction between urban and rural households as far as the calorie intake is concerned.
This revised measurement of poverty will surely increase the number of people below the poverty line, but there is a silver lining too in terms of the provision of education, health, and sanitation facilities to the poor to ameliorate their lot. In case the measurement also accounts for many other socio-economic facilities, then the poverty line will further move up, and may be the number of poor people (in the new sense) will reach say up to 70 or even 80 percent. The Government has, therefore, to work out an optimal trade-off between the various parameters to estimate the poverty line, and its level. More are the parameters, more upwards would is the poverty line, and vice versa. The Government should follow the international standard for determining the level of the poverty line.
It is also clear that, once the number of people below the poverty line becomes more, the number of people above the poverty line becomes less, and once the number of people below the poverty line becomes less, the number of people above the poverty line becomes more. In other words, there is an inverse relationship between the number of poor people and the number of the rich people in any country.
The rich people can be categorized into poorest rich (just above the poverty line), plain rich (much above the poverty line), and super rich (a lot above the poverty line), and the remaining people are the poorer lot, some of whom are down below the poverty line, and others are closer to the poverty line.
There is another categorization: rich people (of all categories as mentioned above) are either deserving or non-deserving. Deserving rich people are those who have worked hard to accumulate wealth and income, and undeserving rich people are those who amass huge wealth and income through nefarious, illegal, and even immoral means and also through their involvement in “rent-seeking” activities. Likewise, poor people can also be classified as deserving poor and undeserving poor. Deserving poor people are those who value their self-esteem and honour and work hard to make their living, and undeserving poor people are those who depend on others in various ways like begging and so on. Such people will always be designated as poor no matter how mush support is given to them. In developing countries and also in India, there is no dearth of undeserving rich and undeserving poor people. It is quite true that all the people of any country can never be rich in the true sense of the term, but some attempts can be made so that none of the countries have either undeserving rich, or undeserving poor people. Let the beginning for this social cause be initiated in India!
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