Beyond
the debate, govt. accepts 65% Indians are poor
RUKMINI S NEW DELHI, July 24, 2013
M.K. VENU
Notional poverty line
will stand at a per capita expenditure of around Rs. 50 per day in rural areas
and Rs. 62 in urban areas
While the Opposition pillories the Planning
Commission for using a formal definition of poverty that ensures the percentage
of people below the poverty line is lower than what it ought to be, the
government has begun moving to a broader and more realistic de facto definition
that will include roughly 65 per cent of the population. This notional poverty
line will stand at a per capita expenditure of around Rs. 50 per day in rural
areas and Rs 62 in urban areas.
As first reported by The Hindu, the Planning Commission has
revised the official poverty headcount ratio down from 37 per cent of the total
population in 2004-5 to 22 per cent of the population in 2011-12.
These poverty rates come from applying the
Suresh Tendulkar committee’s methodology for estimating poverty to draw a
poverty line, and using the National Sample Survey Organisation’s consumption
expenditure data for 2011-12 to see what proportion of the population falls
below these lines.
While Planning Commission-derived poverty lines
and estimates have been all-important in the past because they are used to draw
up BPL lists and allot entitlements, their inappropriateness today is
demonstrated by the fact that the government itself is now moving away from
using these numbers altogether. Following the Union Cabinet’s clearing of the
National Food Security Ordinance, the Planning Commission has estimated that
subsidised foodgrain entitlements will cover 67 per cent of the population.
Simultaneously, economists advising the Ministry of Rural Development have told
The Hindu that the exclusion criteria to be derived from the ongoing
Socio-Economic and Caste Census are likely to leave out the top 35 per cent of
the population while the bottom 65 per cent will be considered BPL.
“This is a step away from the narrow
definition of poverty we have been using, where the line is really what I call
a ‘kutta-billi’ line; only cats and dogs can survive on it,” said N.C. Saxena,
member of the National Advisory Council, who headed a Planning Commission panel
on poverty that recommended automatic inclusion and exclusion criteria. Rural
Development Minister Jairam Ramesh said last year that the government was
moving towards universalising its social protection schemes, and the Public
Distribution System and pensions remained the only schemes that still relied on
BPL criteria, Mr. Saxena added. A World Bank study of India’s social protection
schemes had shown that universal schemes were far better at actually reaching
the poor than those targeted at the poor.
By covering 67 per cent of the population, the
government is in effect drawing the poverty line 85 per cent higher than what
it is currently drawn at, Planning Commission member Saumitra Chaudhuri told
The Hindu. By 2011-12 consumption expenditures, this works out to roughly
Rs.1,506 monthly per capita expenditure — or Rs. 50 per day — for rural areas,
and Rs. 1,850 per month — or Rs. 62 per day — for urban areas. While India’s
poverty line has usually corresponded with the World Bank’s definition of extreme
poverty, which is $1.25 (in Purchasing Power Parity terms) per person per day,
the new notional poverty line would correspond more closely with the Bank’s
definition of moderate poverty. The $2 line corresponded with Rs. 45 per day in
rural India and Rs. 57 per day in urban India in 2011-12, Bank representatives
said on Wednesday.
“It’s important to remember that those who
aren’t poor in our country can still be very disadvantaged,” Mr. Saxena said.
The Hindu’s analysis of the new NSSO consumption expenditure data shows that 90
per cent of rural Indians spend less than Rs. 70 per day, while 90 per cent of
urban Indians spend less than Rs. 154 per day.
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