India and Poverty – Conjoined Twins

This blogpost is inspired by this article by Tavleen Singh.

The provocation for the article by Tavleen Singh and this blog is the affidavit filed by the Planning Commission at the Supreme Court claiming that the Poverty Line would be defined as Rs. 965 in cities and Rs. 781 in rural areas.

At another level there is a Rule of Thumb called as “Big Mac Index“. The Index tracks the price of McDonald’s Hamburgers across the World and finds the real conversion rate of currencies keeping the Big Mac as the Parity. As a strict vegetarian, I have never tasted an Hamburger and so will not be able to comment on the nutritional value of the Burger or its ability to satiate hunger. But I understand that a Big Mac would be equivalent to a meal.

From the Table I understand a Big Mac costs Rs. 84. This converts to roughly USD 1.66 (as on date of this blog, which would change dynamically as the link would be automatically updated). The Big Mac costs USD 4.07 in the US and therefore the Indian Currency is under valued by roughly 59%. Even the much abused (in this context) Chinese Yuan is under valued only by 44%. But that is not my point.

If the Big Mac Costs Rs. 84 in India and the poverty line is defined as Rs. 31 a day, the Big Mac would be equivalent to slightly less than 3 days earnings of a man on poverty line. If suppose the poverty line is based on 3 meals a day, the Big Mac Would set a man back by at least 8 meals. But this is not as simple as that. McDonalds would not let that man in, if he is not dressed properly. I leave it to you to calculate how many meals that man would have to forgo to buy a single set of dress that would pass muster at McDonalds. Suffice to say that anybody who tries to do that would die of hunger before he saves enough to buy that dress.

This is the definition that this Government sets on “Poverty Line”. We are also told that roughly 40% of India lies below this poverty line. This definition of poverty line keeps the poor man alive (barely at that). He has no hope of improving his situation. I don’t think he can even think of clothing himself (at least in decent clothes).  Education? Improving his life status? You must be joking.

More cruel is this fact. The Per Capita Income (based on Purchase Power Parity) is USD 3,500 (as calculated by CIA), USD 3,408 as calculated by IMF or USD 3,586 as calculated by World Bank. The difference between the highest and lowest of these figures is a mere USD 178. The poverty line as defined by the Planning Commission is around USD 230 Per Annum (Rs.961 a month for an Urban Citizen for 12 months and at USD 50 per Rupee). And 40% live below that. And we are told that the most qualified Economist heads the Government. Would like to know who this man is.

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4 thoughts on “India and Poverty – Conjoined Twins

  1. The burger index may work for other nations where it is somewhat of a everyday man’s meal but the same comparison does not hold true in India. That said, I assume that your statement that “McDonalds would not let that man in, if he is not dressed properly.” would mean that you do agree that McDonalds would not even be considered as an average man’s meal but one with money (and even better choice in clothes). I am missing the point you are trying to make with the Burger Index argument…What is it?

    • The Blogpost is not about the burger or McDonalds or the Big Mac Index. It is about the limit set by the Planning Commission which defines poverty line as a limit where the concerned man just gets food enough to keep him live. What about other necessities in life?

  2. You see…when we have a planning commission which says a person can survive on say Rs.30 per day and that too by none other
    than an economist who is considered very knowledgable, the chances of even existence is bleak for the citizens of this country.
    And this is God’s own nation!!!

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