Poverty, footwear and anecdotal evidence

By Alex Singleton | 9 May 2005

Yazad Jal writes:

Rediff has published a piece by me on how poverty has decreased in India. It started as a response to Dilip D'Souza, but I make one important point. Anecdotes don't matter. Dilip talks about the overwhelming poverty he saw while on a train trip. I write about how I see more poor Indians wearing shoes, acquiring consumer durables and cellphones. While our observations might be diametrically opposite, both of us are right. How do we then know whether India is poorer or richer (or unchanged) in terms of material prosperity?

The only way is to use some measurement tool (or a combination of them). I'd look at per capita income, the UN's Human Development Index, and the Economic Freedom Index. By all three measures, India is better off in 2005 than it was in 1990. We're not doing as well as we should, we're nowhere near. But we're doing better than fifteen years ago. That itself should be an indicator that the reforms in 1991 were in the right direction.