Critics say the government is keeping aid levels low to limit spending on social services for the country's impoverished millions.
India puts its poverty line at just Dh2 a day
NEW DELHI // Savita Devi's family earns 1,500 rupees (Dh111) a month sorting through rubbish in the suburbs of Delhi.
According to the Indian government, they are not poor.
In an affidavit to the Supreme Court last week, the government's planning commission stated that each person spending more than 31 rupees per day in urban areas and 26 rupees in rural areas is above the poverty line and no longer automatically eligible for government aid.
A litre of milk and a half a kilogramme of tomatoes costs about 39 rupees in New Delhi - well above the new poverty line.
Because the court case concerns how many people should be provided with welfare services, critics say the levels are being kept artificially low to limit government spending.
Mrs Devi's family could lose their Below the Poverty Line (BPL) card, which gives them access to subsidised food, free health care and other benefits.
Her husband, Sunil Ram, 30, supports her and their six-month-old daughter with his earnings from what is known as rag-picking, near their home in Mehrauli on the outskirts of the city. Although Mrs Devi does not pick rubbish, she helps to sort through the pile to resell plastic and glass bottles to recycling factories.
The family has already been hit by India's rampant inflation - which has been close to 10 per cent for much of the past year.
"It is already very hard to sustain whatever little we eat now because of rising food prices," said Mr Ram.
He estimated that the family spends 70 per cent of their income on food and drinking water every month. The rest goes on rent and other necessities.
"We will cut back on buying meat," said Mrs Devi. They treat themselves to 500 grams of chicken once each week. But Mrs Devi estimated that without the BPL card they would have to cut it out altogether.
"We cannot start skipping meals because it makes us sick and we are unable to earn whatever little we do," she said. "With rising costs, I have started cooking smaller meals but if we do not get rations I am not sure where that will leave us."
The planning commission's new poverty line has caused a storm of controversy over the past week, as questions are raised about how a family can survive on so little.
"This is not a poverty line. This is a starvation line," said Harsh Mander, a member of the National Advisory Council who has been a leading advocate of expanding welfare services.
"The basic motivation is the government wants to limit its expenditure in the social sector on things such as subsidised housing, social security pensions for the aged and public health care."
Even with these low figures, the planning commission said there are still more than 400 million people living in poverty in India - about a third of the population.
Other surveys put the figure much higher. A report by the state-run National Commission for Enterprises in the Unorganised Sector in 2007 said that 77 per cent of the population - an estimated 836 million - lived on less than 20 rupees a day, which was the previous poverty line, based on 2004-05 prices.
Although BPL cards and welfare schemes are managed by state governments, they are reliant on the central government to provide their funding - and this is determined by poverty statistics.
"It could be argued that there is a clear budgetary interest in limiting the number of poor people," said Abhijit Sen, an economist and member of the planning commission.
Those fighting for an expansion of social services say the government's policy of capping the number of people that receive rations and other subsidies is self-defeating.
"If you have millions of people going to sleep hungry every night, then that is morally unacceptable," said Mr Mander. "But even if you only look at the economics, it makes obvious sense to have a well-nourished, well-educated population.
"The government's free-market fundamentalism leads it to believe that simple growth is all you need to reduce poverty."
The controversy over the new poverty lines has obscured their original purpose, which was to measure the rise and fall of poverty in India. Instead, they have been used to justify caps on the number of people receiving government benefits.
"These figures are only meant as benchmarks," said Jean Dreze, a development economist at Delhi University, speaking on the local TV station IBNLive. "They are not meant to be interpreted as actually adequate for a dignified living."
He said the government's decision to base its welfare programmes on these figures amounted to "a system of exclusion in which large numbers of people are left out of social support", leading to "starvation deaths and huge levels of malnourishment".
One ray of light for families struggling near the poverty line is the new Food Security Bill, which is expected to go before parliament later this year. It aims to vastly increase the number of people entitled to subsidised grains - up to 75 per cent of the rural population and half the urban population.
Questions remain over the cost to the Treasury and the capacity of the creaking public distribution system to deliver the extra grain, although these concerns are dismissed by its supporters.
"There is no absolute shortage of resources in India," said Mr Mander. "If the country was built around certain basic rights such as the right to food, housing and health care, then we could find the resources to afford it."