On July 3, when Union Finance Minister Arun Jaitley and Minister for Rural Development Birendra Singh released the provisional data on the socio-economic profile of rural households from the census, they indicated that the Centre will use it to identify beneficiaries of its social schemes. “This document will form the basis of helping us to target groups to support in terms of policy planning,” said Jaitley.
The data unambiguously shows extreme levels of poverty in rural India. Only 8.3% of rural households have a member earning Rs 10,000 or more a month, it says. The highest-earning member in about 75% of rural households makes less than Rs 5,000 in a month. Nearly 51% of these members are employed as casual or manual labourers, and more than half own no land.
Despite this extreme poverty, the census says, about 40% of the 17 crore rural households face no “deprivation” because they satisfy at least one of its 14 “parameters of exclusion”.
A committee set up by the previous Congress-led United Progressive Alliance government had recommended a graded look at the parameters to make sure that deserving people don’t fall out of the social safety net. The National Democratic Alliance government has so far not made the committee’s report public and it is unclear if it would adhere to the suggestion. If the government goes by the census’ definition, crores of people will be left out of social schemes.
A new design
The question of who is poor and eligible for government programmes such as old-age pensions, self-employment schemes or subsidised rations has been a fiercely contested one. The central government had conducted three censuses in 1992, 1997 and 2002 to identify households living below the poverty line that would get various entitlements.
The Socio Economic and Caste Census, or SECC, was the fourth such exercise.
The 2002 census, based on a 13-point questionnaire to determine the socio-economic characteristics of households, had come severe under criticism for its low coverage, corruption and poor design. In 2005, three surveys – the National Family Health Survey, the National Sample Survey, and the India Human Development Survey – showed that about half of all poor households still did not have a BPL card and were left out of government benefits.
This was why the SECC, started in 2011, used a new methodology. It aimed to correct the errors of the 2002 census by introducing automatic inclusion criteria to identify deprived households eligible for social schemes. Apart from this, it had exclusion criteria and seven indicators of deprivation which households could easily answer and be scored on.
NC Saxena, a retired IAS officer and a member of the United Progressive Alliance government’s National Advisory Council, headed the expert group set up in 2009 to design the SECC methodology. The government did use the criteria proposed by Saxena, albeit with some modifications.
For instance, Saxena recommended automatically excluding those owning a motorised three- or four-wheeler, but the government also added a two-wheeler as a basis for exclusion. The Saxena committee suggested that all female-headed households be included in the list of deprived households. But the government considered only those female-headed households as deprived which did not have any adult male member between 16 years and 59 years of age.
These were the exclusion criteria identified for households:
* Owning two-/three-/four-wheelers/fishing boats
* Owning mechanised three-/four-wheeler agricultural equipment
* Paying income-tax or professional tax
* Possessing Kisan Credit Card with the credit limit of Rs 50,000
* A member as government employee, working in local bodies
* Households with non-agricultural enterprises registered with the Government
* Any member in the family earning more than Rs 10,000 per month
* Ownership of a refrigerator or landline phone
* Ownership of 3 or 4 rooms pucca house with a pucca roof
* Ownership of more than 2.5 acres of irrigated land with one irrigation equipment
Anomalies in data
Saxena says the provisional data indicates that a large proportion of those surveyed were automatically excluded – nearly 7 crore of the 17 crore (or about 40%). On the other hand, only a miniscule segment got automatically included – only 16 lakh (or 0.9%). Of the remaining nearly 10 crore households, as many as 2 crore households reported no deprivation. “Two crore households did not have sufficient income or assets to fit into the category of the highest earning member earning Rs 10,000, they did not own even a 2-wheeler, or a refrigerator or a phone, yet they show no deprivation” said Saxena. “This shows that the deprivations were very narrowly defined.”
These were the deprivation criteria used in the census:
* Households with only one room with no solid walls and roof
* Households with no adult member aged 16-59
* Female-headed households with no adult male aged 16-59
* Households with differently abled members and no able-bodied member
* Scheduled Caste/Scheduled Tribe households
* Those with no literate member above the age of 25
* Landless households deriving a major portion of their income from manual casual labour
As per the census, in 13 crore households, the highest-earning member makes less than Rs 5,000, but only 8.6 crore of these households have one of the seven deprivations. “Does it mean that the remaining, almost one-third of those whose highest-earning member earns less than Rs 5,000, do not face any deprivation?” asked Saxena.
The census recorded 2.23 crore female-headed households (about 12.8% of the total), but only 69 lakh of these (or 3.8%) satisfied the deprivation criteria of not having an adult male member in the 16-59 age group. And yet, the census recorded 1.81 crore female-headed households where the highest-earning member’s monthly income is less than Rs 5,000.
“At least the definition should have included all female-headed households who do not have any working and earning male member in the family,” said Saxena.
In 2011, economists Himanshu and R Murgai had analysed pilot SECC data from 250 villages and found that compared to 8.3% households automatically excluded under Saxena’s method, 28% rural households got automatically excluded under the extended set of exclusion criteria of the SECC. The summary of SECC data released earlier this month shows this is even higher – 40%.
Some commentators have already begun pointing to the preliminary SECC results to question the coverage under the National Food Security Act, providing subsidised food grains to 75% of all rural households, as too high.
Soon after the SECC exercise began in 2011, the Planning Commission caused uproar when it submitted an affidavit in the Supreme Court, defining the poverty line at Rs 32 per person per day in urban areas and Rs 26 per person per day in rural areas. It led to a public debate over whether even bare subsistence was possible at the low threshold of Rs 26-32. Even then, over 35 crore people were recorded as living below this threshold.
In response, Planning Commission deputy chairperson Montek Singh Ahluwalia and the then Minister for Rural Development, Jairam Ramesh, issued a statement that “the present state-wise poverty estimates using the Planning Commission methodology will not be used to impose any ceilings on the number of households to be included in different government programmes and schemes”. The Congress-led government said it will consult with states, experts and civil society groups to arrive at a consensus on the methodology by the time the 2011 SECC is completed.
In the same spirit, the UPA government passed the National Food Security Act, covering 75% of India’s rural population. This coverage is higher – at over 85% – in poorer states such as Bihar and Jharkhand to minimise instances of poor households being left out due to errors in identification.
As per its commitment on consultation, the UPA government set up a five-member committee under economist Abhijit Sen, which analysed SECC data in 2014 to determine beneficiaries of various rural development schemes.
One of the committee’s main recommendations was to change the way of counting exclusion from government schemes by dividing the exclusion criteria in SECC into two groups, says Sen.
“In the first stage, we recommended considering only how the household fares on five of the 14 exclusion criteria, such as income tax payee, ownership of 3 or 4 rooms pucca house, ownership of four-wheeler,” explained Sen. “If they fulfil any of the five categories, then they would be excluded.”
If a household was not excluded in step one, the second step would apply. This would entail application of the rest of the exclusion criteria. “If on these, the household is found fulfilling two or more criteria on assets, only then to exclude them,” said Sen. “Ninety percent of the data had been collected by then. When we applied this two-step process to it, the number of excluded fell from 40% to 25%.”
Sen said this was based on the logic that some criteria were better indicators of wealth than others. Looking at multiple criteria of exclusion would provide better and more reliable evidence of a household’s assets, says Sen.
Himanshu, an economist at the Jawaharlal Nehru University who was a member of Sen’s committee, said the government had neither made the report public nor had it initiated a wider consultation with the state governments, who were the biggest stakeholders in the process.