How much does a poor man’s meal cost?

How much does a poor man\’s meal cost? One politician said Rs 5. Another said Rs 12. TV channels had a field day going around dhabas in cities, looking for cheap meals. Unsurprisingly, they found that even cheap dhaba meals cost Rs 20-25, and castigated insensitive politicians ignorant of Indian realities. The expose was most entertaining. Alas, it also ignored many facts, and made simple but major mathematical errors.

Earlier, the Planning Commission\’s latest data had shown the poverty ratio falling spectacularly from 37% in 2004-05 to 22% in 2011-12. This raised 138 million people above extreme poverty, one of the greatest poverty-reducing feats in history.

\”Statistical fudge,\” screamed TV anchors and opposition politicians. The poverty line set by the Tendulkar Committee was Rs 5,000 for a family of five in urban areas, and Rs 4,000 per family in rural areas. \”Ridiculously low and unreal,\” said the anchors.

The media translated the Tendulkar monthly rate into daily consumption of Rs 33 per day per person in urban areas. TV cameras went around dhabas to see if two meals a day could be found for Rs 33. The answer was overwhelmingly \”no\”.

So, TV anchors castigated the Planning Commission for heartlessness, ignorance and fudging. Most said the Tendulkar line was rubbish.

Now, the Tendulkar line is roughly equal to the World Bank\’s poverty line, used by the UN and over 180 countries. They can\’t all be ignorant of the cost of a meal. Clearly something is wrong in the calculations of Indian TV anchors. Some readers may have spotted the errors already.

First, typical dhabha eaters are single migrant workers, without family. The Delhi minimum wage for unskilled labour is Rs 297/day, and market wages are usually higher than the minimum wage. A migrant working for 25 days a month earns around Rs 7,500.

His costs? Monthly room rent – Rs 2,500. Two meals a day at Rs 30-40 /meal – Rs 1,800-2400 /month. Minor luxuries like jalebis, films, liquor and beedi – Rs 1000. This leaves surplus cash of Rs 1,000-2,000, which he remits home (caveat : high transport costs sometimes wipe out the surplus). Rates differ from city to city – this calculation uses Delhi rates cited by a man renting rooms to migrants.

Why does this picture so contradict \”reality TV\” exposes showing the poor unable to eat? Because TV channels forget that dhaba-eaters are typically single. A single person earning the Tendulkar rate of Rs 5,000/month averages Rs 167/day, five times as much as the Rs 33 that TV anchors focus on!

Many poor people live with their entire families in cities. But such families typically cook and eat at home, not at dhabas. The Tendulkar line provides for a very basic calorie intake of around 2,000 calories/day/person. This requires 400 grams of wheat/rice and 100 grams of dal. At an open market rate of Rs 22/kg for wheat and Rs 40/kg for chana dal, the cost comes to Rs 12.80 per day – well within Rs 33, even allowing for costs of fuel and vegetables. Now, a family of five living on Rs 5,000 definitely lacks a decent living standard. It has only just crossed the World Bank\’s \”extreme poverty\” line. But it is no longer unable to eat.

A dhaba is a commercial business. It buys all inputs at unsubsidised prices, has costs like rent, staff, municipal dues and hafta for cops, and makes a profit. That\’s why a dhaba meal costs 4-5 times more than home cooking. I didn\’t see TV exposes make this elementary point.

My calculations for home meals are based on open market prices. But the poor are supposed to get highly subsidised food. In Delhi, Antyodaya families (the poorest) get wheat at Rs 2/kg, and other BPL families at Rs 4.50/kg. At the BPL price, the daily wheat need of 400 gm costs just Rs 1.80, and, at the Antyodaya rate, only 80 paise.

Many states today give rice at Re 1/kg. So, the daily need of 400 gm of rice costs just 40 paise. Even if cheap food covers only half monthly consumption, it makes Rs 33/day go a long way compared with dhaba food.

TV anchors could argue that the public distribution system does not work, so the poor don\’t get subsidised food. If so, they should strongly oppose the Food Security Bill. But most hail the Bill as a saviour that will more or less work. If that\’s what they believe, they should change their tune and say that the Bill will definitely allow urban families of five to live on Rs 5,000/month (high-cost Mumbai may be the only exception). That will be elementary, honest maths.

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