Recent Poverty Debate in India

Are we underestimating the poor?

In an affidavit filed with the Supreme Court, the Planning Commission has said anyone with daily per capita expenditure of Rs 26 in rural areas and Rs 32 in urban areas should be considered to be below poverty line.The limits have been slammed as unrealistically low.

What is poverty line?

Poverty line is used to count the poor nationally & in each state. It is based on expenditure (Monthly Per Capita Consumption Expenditure) and not income.

The earliest poverty estimates were largely based on food needs — 2400 kcal in rural areas & 2100 kcal in urban areas.

How is the number of poor estimated?

Any one below the expenditure identified by the Tendulkar Committee will be considered poor. Planning Commission is the nodal agency for estimating the number of poor in the country.It estimates BPL population separately for national and state level based on the predefined poverty line. The data is source is the large sample survey by the National Sample Survey Office every five year.

Percentage of poor in 2004-05

Urban: Original estimate 27.5; Tendulkar estimate 25.7

Rural: Original estimate 28.3; Tendulkar estimate 41.8

Total: Original estimate 27.5; Tendulkar estimate 37.2

Poverty line and identification of poor not related

The poor population is identified through a below poverty line (BPL) Census that digs into various socio-economic state of people.

It is conducted every five year, just before a 5-year plan is to begin.

Rural count

The current census will be done on the basis of recommendations of an expert group headed by NC Saxena.

It will identify those automatically excluded from BPL and count those automatically included.

The remaining will be judged on the basis of 7-parameter index to identify the poor among them.

Urban count

Urban poor being counted for the first time.

Headcount will be based on suggestions of Hasim panel.

There will be an automatically excluded category.

Urban poor being counted for the first time.

Headcount will be based on suggestions of Hasim panel.

There will be an automatically excluded category.

Very few benefits linked to poverty line

9% of about Rs 1 lakh crore spend of rural ministry linked to poverty line.

Rs 40,000 cr NREGA is a universal scheme available to all.

The mid-day meal scheme and rural health schemes are universal.

Only subsidized food was linked to poverty line, but even that will change under the new food bill.

What is the current poverty line?

The latest poverty estimates are based on December 2009 recommendations of a committee headed by Prof Suresh Tendulkar.

The Tendulkar methodology goes beyond food to captures a wider set of deprivations.

Poverty line at ’04-’05 prices

Urban: Rs 579 monthly per capita expenditure

Rural: Rs 447 monthly per capita expenditure

Poverty line updated to current prices (Jun ’11)

Urban: Rs 965 monthly per capita expenditure or Rs 32 a day

Rural: Rs 781 monthly per capita expenditure or Rs 26 a day

What is the significance of the poverty line?

Poverty line is a broad measure of level of development.

It’s about bare needs of a person Social benefits to focus on well identified beneficiaries.

Poverty numbers will show development & intra-state changes.

It is a macro construct that has increasingly lower policy impact.

Links and Sources:

Indiatimes

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About Rashid Faridi

I am Rashid Aziz Faridi ,Writer, Teacher and a Voracious Reader.
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