CSIP: PRELIMS BOOSTER SERIES -579 ECONOMICS
POVERTY ESTIMATION IN INDIA
Why in news?
Niti Aayog CEO says poverty reduced to 5% based on latest Household Consumption Expenditure Survey.
Who estimates poverty in India?
The Planning Commission (now Niti Aayog )estimates levels of poverty in the country on the basis of consumer expenditure surveys conducted by the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation.
HISTORY OF POVERTY ESTIMATION IN INDIA
The earliest effort to estimate the poor was made by Ddabhai Naroji who estimated a subsistence-based (diet ‘rice or flour, dhal, mutton, vegetables, ghee, vegetable oil and salt’.)poverty line at 1867-68 prices in his book “Poverty and Un-British Rule in India”.
He formulated a poverty line ranging from Rs 16 to Rs 35 per capita per year, based on 1867-68 prices.
WORKING GROUP 1962
In 1962, the Planning Commission constituted a working group to estimate poverty nationally, and it formulated separate poverty lines for rural and urban areas – of Rs 20 and Rs 25 per capita per year respectively.
VM Dandekar and N Rath made the first systematic assessment of poverty in India in 1971, based on National Sample Survey (NSS) data from 1960-61.
They argued that the poverty line must be derived from the expenditure that was adequate to provide 2250 calories per day in both rural and urban areas.
ALAGH COMMITTEE (1979)
YK Alagh, constructed a poverty line for rural and urban areas on the basis of nutritional requirements.
| Area | Calories | Minimum consumption expenditure (Rs per capita per month) 1973-74 price levels |
| Rural | 2400 | 49.1 |
| Urban | 2100 | 56.7 |
LAKDAWALA COMMITTEE (1993)
Estimated poverty on the basis of money required to buy food having minimum nutritional requirement of
2100kcal/day/person: Urban
2400kcal/day/person: Rural
Method: Uniform Reference Period
Other recommendations:
state specific poverty lines should be constructed
and these should be updated using the Consumer Price Index of Industrial Workers (CPI-IW) in urban areas and Consumer Price Index of Agricultural Labour (CPI-AL) in rural areas
SURESH TENDULKAR COMMITTEE(2009)
Defined poverty line on the basis of expenditure on a basket of commodities (food and non food items like clothing, footware, education, health electricity)
Poverty line
Urban: 33Rs/person/day
Rural: 27Rs/person/day
Method: Mixed Reference period
the committee recommended a uniform all India urban Poverty line Basket across rural and urban India instead of two separate PLBs for rural and urban poverty lines. Based on this poverty rate was estimated to be 22% of the population
C RANGARAJAN COMMITTEE
Defined poverty line on the basis of expenditure on basket of commodities (food items: to purchase food having minimum nutritional requirement of calorie, proteins and fats(2100kcal: Rural, 1900kcal: Urban), Non food: transport, education, clothing etc. )
Poverty line (@ 2011-12 prices)
Urban: 47Rs/person/day
Rural: 33Rs/person/day
Method: Modified mixed reference period.
It recommended separate consumption baskets (poverty line basket) for rural and urban areas and deriving state-level rural and urban estimates from these.
Based on this poverty was estimated to be 30%.
