Data and Dogma: The Great Indian Poverty Debate

Abstract:     
What happened to poverty in India in the 1990s has been fiercely debated, politically and statistically. The Indian debate has run parallel to, and is itself a large part of, the wider debate about globalization and poverty in the 1990s. The economic reforms of the early 1990s were followed by rates of economic growth that were high by Indian historical standards. The effects on poverty remain controversial, and the official numbers published by the Government of India, showing a reduction of poverty from 36 percent of the population in 1993-94 to 26 percent of the population in 1999-00, have been challenged both for showing too little and too much poverty reduction. The various claims have often been frankly political, but there are also many important statistical issues, and the Indian debate, of which this paper is a review, provides an excellent example of how politics and statistics interact in an important, largely domestic debate. Although there is no full consensus on what happened to Indian poverty in the 1990s, there is good evidence that the official estimates of poverty reduction are too optimistic, particularly for rural India. This overoptimism was amplified by statistical uncertainty that created space for some commentators to argue that poverty had been virtually eliminated in India in the wake of the economic reforms. Although this paper is concerned with the measurement of poverty in India, all of the issues - discrepancies between surveys and national accounts, the effects of questionnaire design, reporting periods, survey non-response, repairing imperfect data, the choice of poverty lines, and the interplay between statistics and politics - have wide resonance elsewhere.

Keywords: India, poverty, measurement, liberalization, growth

JEL Classifications: I32, O11, O47, O53

Working Paper Series