CHENNAI: Directionless neo-liberal reforms, flawed theories of Western economic models and a false notion of the country’s poverty reduction should be checked so as to stem a corrosion of integrity and militancy of the Left and other progressive movements, according to a Delhi-based expert.
Prof Utsa Patnaik (Retd) of Jawahar Lal Nehru University, while questioning the claims of poverty reduction by economists, said, changing its definition in a way that lowered the standard against which poverty was measured amounted to “intellectual dishonesty”.
“A nation in which substantial number of intellectuals peddle false poverty estimates to ingratiate themselves with the government or with international institutions like the World Bank is a nation whose people can’t progress,” she lamented, delivering the V P Chintan Memorial Lecture here on “Capitalist Trajectories of Global Interdependence and Welfare Outcomes: Lessons of History for the Present”.
Interestingly, the non-poor as per earlier definition were those who could obtain 2,400 kilocalories energy per day in rural areas and 2100 calories in urban areas. “But the standards were simultaneously lowered and the new definition was that the poverty line was simply the original poverty line adjusted upwards by a price index without ever asking the question whether this poverty line allowed people to obtain the same level of nutrition before,” she said.
“Linking income with price index is gross under-estimation of standard of living. How would a poor man eke out a living with `12 a day in rural area and `18 a day in urban area,” Patnaik wondered. “If we use the correct procedure, the percentage of rural persons unable to reach the initial official 2,400 calories daily nutrition will rise to 87 per cent, while the urban populace who did not reach the urban figures of 2100 calories will have risen to 64.5 per cent.”
She also slammed the neo-liberal reforms and said the thrust was always towards retrenchment of labour and ‘downsizing’, thus ignoring the impact of this on aggregate demand and hence on the inducement to invest.
“The combination of these two factors have has led to near-zero impact on manufacturing growth on employment while for organised industry there is absolute job loss,” Patnaik said.