The Need For Comprehensive Poverty Estimation


During 2004-05, when the Suresh Tendulkar committee was formulated under the aegis of the Planning Commission, a shift in methods of measuring poverty was suggested. The Committee submitted its report in 2009.The Direct Method for Poverty estimation was suggested.

The Tendulkar Committee Report made two key observations:

First being, “the Poverty line cannot be anchored in the calorific norm alone.”

Second., “The consumption basket of 1973-74 has to be modified today to include expenses on education, healthcare, clothes, footwear and fuel.”

However, the Tendulkar Committee report adopts the P.V. Sukhatme suggested estimate of 1800 kilocalories per capita per day. “Also, it converts the URP consumption-based poverty line to MRP consumption-based poverty line.” According to this report an income of Rupees 579 in urban areas and Rupees 447 in rural areas per month should suffice. It further goes on to suggest that Poverty in rural areas of India stands at 41.8 unlike the planning commission estimate of 28.3%.  Urban poverty as reported by the Tendulkar report stood at 25.7%.

Another calculation discussed by Professor V. Atreya tells us that a direct estimate of the poverty line which accounts for 2400 calories per day in rural areas would require a monthly income of Rupees 795. By this estimate 87 percent of India’s rural population would be below the poverty line.

Usha Pattanaik in her critique of the Poverty line mentions “the question of nutrition has been rendered irrelevant in the official method. There is not even any lower bound which is set to the fall in the energy intake corresponding to official poverty lines.”

The Ranrangrajan Committeewas formulated in 2011-12 to probe into the findings of the Tendulkar Committee report and established a new mode of Poverty line estimate where it included protein, fat along with calorie for the necessities of a balanced diet. It established that the monthly expenditure on the new consumption basket stands at Rupees 554 in rural households and Rupees 656 in urban households.

It also accounted for non-food components of education, rent clothing and mobility. Once adjusted on these counts Monthly per Capita Expenditure rises to Rs 972 in rural areas and Rupees 1407 in urban areas per individual. But this count of a consumption basket in addition with the non-food component can only be made if the planning commission accepts the Direct Method of Poverty Line estimation.

The Rangrajan Committee states that 29.5 percentage of Indian population are still below the poverty line when poverty is calculated through the indirect method after making provisions for calorie, fat and protein in the consumption basket.

The Rangrajan committee makes earth shattering revelations as it states that the level of rural poverty in India is 19% more than the Tendulkar committee estimate. Similarly, it also states that urban poverty is 41% more than the previous estimate. The first step to addressing the poverty issue is identifying the identifying a country’s “poor and huddled masses.” Central Government allocates budgets after studying the level of poverty of a particular state; hence, it affects fiscal measures. The number of poor people in a state determines the fiscal allocation given to the particular state. Similarly, identifying the poor enables them to get food subsidies, avail various anti-poverty schemes as well as utilise subsidised government healthcare and education. Identifying the poor allows for targeted positive intervention to alleviate poverty.

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