Have poverty levels fallen or has the rise in billionaires skewed the figures? The answer is being hotly debated and will determine India's development policy in years to come

A pledge to eliminate poverty has figured prominently in the election campaigns of all of India's political parties since the country gained independence in 1947. Yet the ruling Congress party – and particularly prime minister Manmohan Singh, labelled as 'Mr Silent' for failing to answer questions on the landmark food security bill – is accused of exploiting poverty rather than putting in place effective measures to tackle it.

And while the political wrangling continues, Indian civil society is trying to make sense of the recently published figures that suggest poverty has fallen by a third. The latest poverty estimates, 2011-2012, from India's planning commission suggest that anyone with a daily consumption expenditure of £0.31 ($0.47) in urban and £0.25 ($0.38) in rural areas is above the poverty line. This has resulted in nearly 140 million people all of a sudden climbing out of poverty. But economists, policymakers and NGOs argue that the figures are inaccurate, starting a debate around the question: how should poverty be measured?

Organisations engaged in poverty eradication say it should be measured by segregating India's poor into two groups. One in 'abject poverty', where families struggle to provide for themselves on a daily basis. The second comprises of those who are vulnerable to poverty. People from this group do not struggle to live, but are sensitive to expenditure shocks. A further band of people also need to be identified as those that are neither struggling to sustain themselves nor are vulnerable, but whom are unlikely to prosper without welfare programmes . "These seekers of prosperity are just below the economic threshold line," said Nityanand Dhal, team leader of Pradan, an NGO which works with India's rural poor.

If one is to believe these estimates, such startling drop in poverty indicate that in another four years, when the 2014-15 survey results will be available, urban poverty in India will be near zero, and rural poverty only around 12%. Development practitioners say any decline in poverty looks unlikely to reflect reality. The judgment that poverty will fade away is unrealistic. In reality, it is worsening over time.

The new liberal economic policies have caused impoverishment on one end, and accumulation of wealth on the other, hugely benefiting the country's rich, and producing close to 122 billion dollar billionaires as of 2013. The UK cut aid to India recently for much the same reason – it is now middle income. The areas in which India's middle and upper classes make their living have seen the highest degree of liberalisation, while the areas in which the poor earn their livelihood have seen the fewest of reforms.

ActionAid India executive director, Sandeep Chachra, said India is still a "long way from even the minimum targets when looking at the numbers of people living in poverty." The gains from neoliberal policies are accrued to the relatively better off section of the society, while the costs are to be paid by the poor.

However, Centre for Civil Society president Parth Shah, said the urban and rural poor are unenthusiastic about liberalisation, not because it is making them poorer as some claim, but because they have not seen much liberalisation in how they earn their livelihoods. A poverty line proportionate to the national average gives an idea about the state of a widespread economic disparity. A distinct jump in the income of the richest is setting the poverty line higher by pulling up the national average income. This is making the poor appear even poorer even though their incomes may have risen.

Still, the Global Wage Report 2012-13 observes that real wages in India declined in a majority of recent years, shrinking the purchasing power of wage earners, leading to concerns about rapidly increasing prices, particularly food. International Development Enterprises' CEO Amitabha Sadangi said that there are millions in India who are still under poverty.

"The way forward is to create sustainable employment opportunities, income generating opportunities, make them self-reliant and totally independent," said Sadangi. Many NGOs feel that universal access to basic public services, improving land rights and local economies are essential policies. Prioritising the most vulnerable sections of society– disabled populations, single women, vulnerable tribal groups – are some steps where more needs to be done, said Chachra.

India's poverty needs redefining, making it comprehensive enough to take into account social inclusion and factors such as access to and control over resources. In most of the rural areas, people have free access to many public resources like forests, water-bodies, grazing land to support their livelihoods. But in urban areas, without communal resources and collective ownership, goods and services are acquired at a cost, worsening poverty.

The issue is not of the absence of social security programmes. The challenge is that schemes such as the public distribution system and Rashtriya Swasthya Bima Yojna (national health insurance) should reach people of both abject poverty groups as well as vulnerable groups, if their benefits are to be universal.

For now, though, it seems that while one India is prospering, the other seems to be getting pushed deeper into extreme poverty – and petty politics around a critical issue that affects the country's millions may render even the good bits of the policy ineffective.

Read the original article in The Guardian