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Poverty lines in India.Estimation and Committees

POVERTY ESTIMATION IN INDIA

In 1993, The Planning Commission constituted a task force for the calculation of poverty lines in India, chaired by Lakdawala.

The committee made the following suggestions:

  1. Consumption expenditure to be calculated based on calorie consumption, i.e. 2400 in rural areas of poverty lines in India and 2100 in urban areas.
  2. State-specific poverty lines in India should be constructed and updated using the Consumer Price Index of industrial workers in urban areas and Consumer Price Index of agricultural labourers in rural areas.

Tendulkar Committee, 2005 (Headed by Suresh Tendulkar)

The Tendulkar Committee was constituted by the Planning Commission to address three shortcomings in the previous methods of calculating poverty:

  1. Consumption expenditure was linked to the consumption patterns of 1973-74. However, there have been significant changes in consumption patterns since 1973-74. Therefore, the Tendulkar Committee used the recent patterns of consumption to determine consumption expenditure.
  2. Earlier, the expenditure on health and education was ignored. The Tendulkar Committee considers expenditure on education as incurred by the state , but it considers health expenditure of ₹30 per annum to seek health cover of ₹30,000.
  3. Earlier, poverty lines in India estimates were based on uniform reference period, i.e. respondents were asked to detail the consumption made by them over the past 30 days. Whereas under the mixed reference period method, five low-frequency items such as clothing, footwear, durables, education expenditure, and health expenditure under poverty lines in India are surveyed over 365 days and all other items for previous 30 days.

The below poverty lines in India population on the basis of the Tendulkar Committee report for 2011-12 was 25.7% rural population, 13.7% urban population, and 21.9% overall population.

Rangarajan Committee

In 2012, the Rangarajan Committee was established by the Planning Commission to review the Tendulkar Committee report. The new committee suggested further improvements in the poverty estimation methodology.

Tendulkar Rangarajan
Only counts expenditure on food, health, education, 1 clothing Food + non-food items such as education, healthcare, clothing, transport (conveyance), rent
·  Urban poverty increased at a faster rate (40%) than rural poverty (19%).

·  This is obvious, because Rangarajan included non­food items like rent, education, etc.

·  These items/services are more expensive in cities than in villages.

Rangarajan recommended that at any given point of time, the bottom 35% rural people and the bottom 25% urban people would always be considered poor.
·  Poverty ratios should be disengaged from
entitlements under government schemes.·  For example, cheap foodgrain quota under the Food Security Act should not be based on BPL-criteria, but social-caste census.

Read more:https://www.brainyias.com/poverty-lines-in-india/

Indian Economy

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