The Planning Commission has recently released the latest poverty estimates for the country showing a decline in the incidence of poverty by 7.3 per cent over the past five years and stating that anyone with a daily consumption expenditure of Rs. 28.35 and Rs. 22.42 in urban and rural areas respectively is above the poverty line.
The new poverty estimates for 2011-12 will only add to the furore triggered by the Commission's affidavit in the Supreme Court in October in which the Below Poverty Line (BPL) cap was pegged at an expenditure of Rs. 32 and Rs. 26 by an individual in the urban and rural areas respectively at the going rate of inflation in 2010-11.
Eventually, Union Minister of Rural Development Jairam Ramesh and Planning Commission Montek Singh Ahluwalia jointly set aside the cap suggested by the Tendulkar Committee and set up a new committee to work out a new methodology for identifying the BPL households.
The present system had to be continued until a new one was worked out and that would be done only after the Socio-economic and Caste Census was completed.
Impact of Government Spending
Similarly, Planning Commission members Abhijit Sen and Mihir Shah separately underlined the need to adopt the same methodology to understand the impact of government spending on the people and across the States over a period of time.
The figure of expenditure in the Supreme Court affidavit had been arrived at by adjusting the figures for 2004-05 with the prevailing inflation rate in 2011-12 and not based on the survey conducted across the country. The survey for 2011-12 is likely to be completed by July and the report would be released in December.
Tendulkar Methodology
Government programs had been delinked from the poverty line estimated on the basis of the Tendulkar methodology which was only being used to understand the impact of government programs over a period of time.
The impact of the new list will be felt on the Rural Development Ministry schemes, particularly those availing various kinds of pension under the National Social Assistance Program.
As per the Household Consumer Expenditure Survey for 2009-10, 29.9 per cent of the population alone were under the BPL from 37.2 per cent in 2004-05.
Rural Poverty
Rural poverty has declined by eight percentage points, from 41.8 per cent to 33.8 per cent, and urban poverty by 4.8 per cent, from 25.7 per cent to 20.9 per cent.
At the national level, anyone earning Rs. 672.8 monthly that is earning Rs. 22.42 per day in the rural area and Rs. 859.6 monthly or Rs. 28.35 per day in the urban area is above the poverty line. Population as on March 1, 2010 has been used for estimating the number of persons below the poverty line.
The total number of people below the poverty line in the country is 35.46 crore as against 40.72 crore in 2004-05. In rural areas, the number has come down from 32.58 crore five years ago to 27.82 crore and the urban BPL number stands at 7.64 crore as against 8.14 crore five years ago.
One of the most astonishing revelations is that poverty has actually gone up in the north-eastern States of Assam, Meghalaya, Manipur, Mizoram and Nagaland.
Even big States such as Bihar, Chhattisgarh and Uttar Pradesh registered only a marginal decline in poverty ratio, particularly in the rural areas, whereas States such as Himachal Pradesh, Madhya Pradesh, Maharashtra, Odisha, Sikkim, Tamil Nadu, Karnataka and Uttarakhand saw about 10 per cent decline in poverty over the past years.
States with high incidence of poverty are Bihar at (53.5 per cent), Chhattisgarh (48.7 per cent), Manipur (47.1 per cent), Jharkhand (39.1), Assam (37.9 per cent) and Uttar Pradesh (37.7 per cent).
However, it is in poverty-ridden Odisha that monthly per head expenditure of just Rs. 567.1 and Rs. 736 in rural and urban areas respectively puts one above the poverty line, while in Nagaland, where the incidence of poverty has gone up, the per capita consumption expenditure of Rs. 1016.8 and Rs. 1147.6 in rural and urban areas puts one above the poverty level.
Among social groups in the rural areas, Scheduled Tribes (47.4 per cent) suffer the highest level of poverty, followed by Scheduled Castes (42.3 per cent), Other Backward Castes (31.9 per cent) as against. 33.8 per cent for all classes.
In rural Bihar and Chhattisgarh, nearly two-third of the SCs and the STs are poor where as in States like Manipur, Orissa and Uttar Pradesh it is more than 50 per cent.
In urban areas, 34.1 per cent of SCs, 30.4 of STs and 24.3 per cent OBCs fall under this category against 20.9 per cent for all classes.
Poverty Estimates
In September 2011, the Planning Commission has told the Supreme Court that the BPL population in the country is 40.74 crore and the poverty line for the urban and rural areas could be provisionally placed at Rs. 965 per capita per month (approximately Rs. 32 per day) and Rs. 781 per capita per month (around Rs. 26 per day), respectively.
The Planning Commission in an affidavit said that the BPL population at present touched by the public distribution services (PDS) was 35.98 crore.
The poverty estimates for year 2009-10 were being worked out and the provisional estimates suggest that the total BPL population as per 2009-10 estimation may be lower than that which would have emerged (on the basis) of Tendulkar ratio on 2004-05 projection.
The Planning Commission filed the affidavit in pursuance of the May 14 order of the apex court bench of Justice Dalveer Bhandari and Justice Deepak Verma, which said that according to the expert group headed by Suresh Tendulkar at the price level of 2011, it was impossible for an individual in urban and rural area to consume 2,100 calories in Rs. 20 and Rs. 15, respectively.
The bench's order asked the Planning Commission to 'revise norms of per capita amount looking at the price index of May 2011 or any subsequent dates'.
The affidavit stated that on applying price increase using the consumer price index for industrial workers in urban areas and the consumer price index for agricultural laborers for rural areas, 'the poverty line at June 2011 price level can be placed provisionally at Rs. 965 per capita per month in urban areas and Rs. 781 per capita per month in rural areas'.
The affidavit further stated: "At June 2011 price level, for a family of five, this provisional poverty line would amount to Rs. 4,824 per month in urban areas and Rs. 3,905 per month in rural areas."
The affidavit said that the final poverty line following the Tendulkar Committee ratio would only be available after completion of the 2011-12 National Sample Survey (NSS) and this would vary from state to state because of price differential.
Moderate Malnourishment
It is no secret that India is doing quite poorly on a number of development counts. According to the Human Development Report, India languishes at around 130th rank among of 177 countries. The International Food Policy Research Institute’s Global Hunger Index ranks India 94th among 118 countries surveyed. The World Food Program (WFP) estimates half of our children suffer from severe or moderate malnourishment.
Sixty-seven out of 1,000 children born in India die before the age of five. Despite a national policy for compulsory primary education, only 50 per cent of children have access to proper education.The World Bank’s own estimate of poverty in 2007 has been radically revised by new cost of living data which draws the new poverty line at $1.25 at 2005 purchasing power parity. On this basis a shocking 41.6 per cent of India’s population — or 456 million people — live below the poverty line, notes Raghav Gaiha, professor of Public Policy, University of Delhi. This is about one-third of the world’s poor population. Even this World Bank data is an underestimate because it does not adequately cover the rural areas where the vast majority of the poor live.
The Planning Commission has accepted the Tendulkar Committee report, which says that 37 per cent of people in India live below the poverty line. This arbitrary method based on an income of `32 per day for urban area and `26 for the rural, has been widely disputed. India wants to be globally respected as a world power but refuses to apply global standards of calculating poverty, which should at least be in line with the World Bank criterion of $1.25 per day.
There is an urgent need to agree on some objective criteria by which to ascertain the number of those in the BPL category. The multidimensional poverty indicators developed by the Oxford Poverty and Human Development Initiative and applied by the Human Development Index (HDI) 2010, are perhaps the most reliable measures developed so far. They include: years of schooling, child enrolment, mortality (any age), nutrition, electricity, sanitation, drinking water, flooring, cooking fuel, and asset ownership. Each of these indicators is given due weight. The new Inequality Index as deployed in the HDI further elaborates the nature of disparities and shocking poorness of the poor in relation to the richness of the rich.According to this calculation the proportion of BPL families in India is 55.4 per cent of the population. Bihar fares poorest, with 61.4 per cent of the people below the poverty line, while Kerala has the lowest fraction of BPL people — 40.9 per cent.
NREGS and Several Other Job-Creation Projects
The Planning Commission’s figures on reduction of poverty to 29.8 per cent in 2009-10 from 37.2 per cent in 2004-05 is welcome as it was expected, considering that it comes on the back of the government’s flagship National Rural Employment Guarantee Scheme (NREGS) and several other job-creation projects like the Pradhan Mantri Gram Sadak Yojna. Welcome as it is that 47 million people have been lifted from poverty, the sorry fact remains that 365 million people — one-third of our population — remain below the poverty line in a country that is growing fast.
These figures only reflect advances made in implementing the government’s “inclusive growth” policy. It clarified that in no way is it going to be a yardstick to cut down employment generation by the government. The Opposition’s fears might not be entirely unfounded: Finance Minister Pranab Mukherjee’s recent Union Budget lowered spending on NREGS from `40,000 crores (in the previous budget) to `33,000 crores as last year only `31,000 crores was spent out of the budgeted amount.Schemes like NREGS continue to be indispensable for creating employment and putting purchasing power in the hands of the rural poor across the country.
The new poverty estimates for 2011-12 will only add to the furore triggered by the Commission's affidavit in the Supreme Court in October in which the Below Poverty Line (BPL) cap was pegged at an expenditure of Rs. 32 and Rs. 26 by an individual in the urban and rural areas respectively at the going rate of inflation in 2010-11.
Eventually, Union Minister of Rural Development Jairam Ramesh and Planning Commission Montek Singh Ahluwalia jointly set aside the cap suggested by the Tendulkar Committee and set up a new committee to work out a new methodology for identifying the BPL households.
The present system had to be continued until a new one was worked out and that would be done only after the Socio-economic and Caste Census was completed.
Impact of Government Spending
Similarly, Planning Commission members Abhijit Sen and Mihir Shah separately underlined the need to adopt the same methodology to understand the impact of government spending on the people and across the States over a period of time.
The figure of expenditure in the Supreme Court affidavit had been arrived at by adjusting the figures for 2004-05 with the prevailing inflation rate in 2011-12 and not based on the survey conducted across the country. The survey for 2011-12 is likely to be completed by July and the report would be released in December.
Tendulkar Methodology
Government programs had been delinked from the poverty line estimated on the basis of the Tendulkar methodology which was only being used to understand the impact of government programs over a period of time.
The impact of the new list will be felt on the Rural Development Ministry schemes, particularly those availing various kinds of pension under the National Social Assistance Program.
As per the Household Consumer Expenditure Survey for 2009-10, 29.9 per cent of the population alone were under the BPL from 37.2 per cent in 2004-05.
Rural Poverty
Rural poverty has declined by eight percentage points, from 41.8 per cent to 33.8 per cent, and urban poverty by 4.8 per cent, from 25.7 per cent to 20.9 per cent.
At the national level, anyone earning Rs. 672.8 monthly that is earning Rs. 22.42 per day in the rural area and Rs. 859.6 monthly or Rs. 28.35 per day in the urban area is above the poverty line. Population as on March 1, 2010 has been used for estimating the number of persons below the poverty line.
The total number of people below the poverty line in the country is 35.46 crore as against 40.72 crore in 2004-05. In rural areas, the number has come down from 32.58 crore five years ago to 27.82 crore and the urban BPL number stands at 7.64 crore as against 8.14 crore five years ago.
One of the most astonishing revelations is that poverty has actually gone up in the north-eastern States of Assam, Meghalaya, Manipur, Mizoram and Nagaland.
Even big States such as Bihar, Chhattisgarh and Uttar Pradesh registered only a marginal decline in poverty ratio, particularly in the rural areas, whereas States such as Himachal Pradesh, Madhya Pradesh, Maharashtra, Odisha, Sikkim, Tamil Nadu, Karnataka and Uttarakhand saw about 10 per cent decline in poverty over the past years.
States with high incidence of poverty are Bihar at (53.5 per cent), Chhattisgarh (48.7 per cent), Manipur (47.1 per cent), Jharkhand (39.1), Assam (37.9 per cent) and Uttar Pradesh (37.7 per cent).
However, it is in poverty-ridden Odisha that monthly per head expenditure of just Rs. 567.1 and Rs. 736 in rural and urban areas respectively puts one above the poverty line, while in Nagaland, where the incidence of poverty has gone up, the per capita consumption expenditure of Rs. 1016.8 and Rs. 1147.6 in rural and urban areas puts one above the poverty level.
Among social groups in the rural areas, Scheduled Tribes (47.4 per cent) suffer the highest level of poverty, followed by Scheduled Castes (42.3 per cent), Other Backward Castes (31.9 per cent) as against. 33.8 per cent for all classes.
In rural Bihar and Chhattisgarh, nearly two-third of the SCs and the STs are poor where as in States like Manipur, Orissa and Uttar Pradesh it is more than 50 per cent.
In urban areas, 34.1 per cent of SCs, 30.4 of STs and 24.3 per cent OBCs fall under this category against 20.9 per cent for all classes.
Poverty Estimates
In September 2011, the Planning Commission has told the Supreme Court that the BPL population in the country is 40.74 crore and the poverty line for the urban and rural areas could be provisionally placed at Rs. 965 per capita per month (approximately Rs. 32 per day) and Rs. 781 per capita per month (around Rs. 26 per day), respectively.
The Planning Commission in an affidavit said that the BPL population at present touched by the public distribution services (PDS) was 35.98 crore.
The poverty estimates for year 2009-10 were being worked out and the provisional estimates suggest that the total BPL population as per 2009-10 estimation may be lower than that which would have emerged (on the basis) of Tendulkar ratio on 2004-05 projection.
The Planning Commission filed the affidavit in pursuance of the May 14 order of the apex court bench of Justice Dalveer Bhandari and Justice Deepak Verma, which said that according to the expert group headed by Suresh Tendulkar at the price level of 2011, it was impossible for an individual in urban and rural area to consume 2,100 calories in Rs. 20 and Rs. 15, respectively.
The bench's order asked the Planning Commission to 'revise norms of per capita amount looking at the price index of May 2011 or any subsequent dates'.
The affidavit stated that on applying price increase using the consumer price index for industrial workers in urban areas and the consumer price index for agricultural laborers for rural areas, 'the poverty line at June 2011 price level can be placed provisionally at Rs. 965 per capita per month in urban areas and Rs. 781 per capita per month in rural areas'.
The affidavit further stated: "At June 2011 price level, for a family of five, this provisional poverty line would amount to Rs. 4,824 per month in urban areas and Rs. 3,905 per month in rural areas."
The affidavit said that the final poverty line following the Tendulkar Committee ratio would only be available after completion of the 2011-12 National Sample Survey (NSS) and this would vary from state to state because of price differential.
Moderate Malnourishment
It is no secret that India is doing quite poorly on a number of development counts. According to the Human Development Report, India languishes at around 130th rank among of 177 countries. The International Food Policy Research Institute’s Global Hunger Index ranks India 94th among 118 countries surveyed. The World Food Program (WFP) estimates half of our children suffer from severe or moderate malnourishment.
Sixty-seven out of 1,000 children born in India die before the age of five. Despite a national policy for compulsory primary education, only 50 per cent of children have access to proper education.The World Bank’s own estimate of poverty in 2007 has been radically revised by new cost of living data which draws the new poverty line at $1.25 at 2005 purchasing power parity. On this basis a shocking 41.6 per cent of India’s population — or 456 million people — live below the poverty line, notes Raghav Gaiha, professor of Public Policy, University of Delhi. This is about one-third of the world’s poor population. Even this World Bank data is an underestimate because it does not adequately cover the rural areas where the vast majority of the poor live.
The Planning Commission has accepted the Tendulkar Committee report, which says that 37 per cent of people in India live below the poverty line. This arbitrary method based on an income of `32 per day for urban area and `26 for the rural, has been widely disputed. India wants to be globally respected as a world power but refuses to apply global standards of calculating poverty, which should at least be in line with the World Bank criterion of $1.25 per day.
There is an urgent need to agree on some objective criteria by which to ascertain the number of those in the BPL category. The multidimensional poverty indicators developed by the Oxford Poverty and Human Development Initiative and applied by the Human Development Index (HDI) 2010, are perhaps the most reliable measures developed so far. They include: years of schooling, child enrolment, mortality (any age), nutrition, electricity, sanitation, drinking water, flooring, cooking fuel, and asset ownership. Each of these indicators is given due weight. The new Inequality Index as deployed in the HDI further elaborates the nature of disparities and shocking poorness of the poor in relation to the richness of the rich.According to this calculation the proportion of BPL families in India is 55.4 per cent of the population. Bihar fares poorest, with 61.4 per cent of the people below the poverty line, while Kerala has the lowest fraction of BPL people — 40.9 per cent.
NREGS and Several Other Job-Creation Projects
The Planning Commission’s figures on reduction of poverty to 29.8 per cent in 2009-10 from 37.2 per cent in 2004-05 is welcome as it was expected, considering that it comes on the back of the government’s flagship National Rural Employment Guarantee Scheme (NREGS) and several other job-creation projects like the Pradhan Mantri Gram Sadak Yojna. Welcome as it is that 47 million people have been lifted from poverty, the sorry fact remains that 365 million people — one-third of our population — remain below the poverty line in a country that is growing fast.
These figures only reflect advances made in implementing the government’s “inclusive growth” policy. It clarified that in no way is it going to be a yardstick to cut down employment generation by the government. The Opposition’s fears might not be entirely unfounded: Finance Minister Pranab Mukherjee’s recent Union Budget lowered spending on NREGS from `40,000 crores (in the previous budget) to `33,000 crores as last year only `31,000 crores was spent out of the budgeted amount.Schemes like NREGS continue to be indispensable for creating employment and putting purchasing power in the hands of the rural poor across the country.
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