Who decides Poverty line?
Planning commission
How does it decide poverty line?
Monthly per capita
Expenditure
Suresh Tendulkar designed its
Formula.
Who provides the data of monthly Expenditure?
NSSO- National sample survey
organization
Under Ministry of Statistics
and Programme Implementation
Tendulkar’s Poverty Line
|
|
Area
|
Monthly Expenditure per person (in Rs.)
|
Rural
|
816
|
Urban
|
1000
|
According to Tendulkar
formula, poverty has declined, as seen in following graph:
No of poors in
|
||
2004
|
2011
|
|
Poor
(in %)
|
37.2
|
21.9
|
Poor
(in cr)
|
41
|
27
|
Economic Survey 2013
|
|
Highest
Rural Poverty
|
Lowest
Poverty
|
1.
Odisha and Madhya Pradesh
|
1.
Kerala (7.1%)
|
2.
|
2.
Himachal Pradesh (8.1%)
|
3.
|
3.
|
Highest
Rural Unemployment
|
Highest
Urban Unemployment
|
1.
Kerala
|
1.
|
2.
|
2.
|
3.
|
3.
Andhra Pradesh
|
4.
|
4.
Haryana
|
Lowest
in
|
Lowest
in
|
Committees
|
Tendulkar
|
C.
Rangarajan
|
Set
up by
|
Planning
Commission
|
Planning
Commission
|
Set
up in
|
2005
|
May
2012
|
Submitted
report in
|
2009
|
July
2014
|
Poverty
Estimation Method
|
Monthly
per capita expenditure
|
Monthly
expenditure of family of 5
|
Urban
Poverty Line:
Urban
Poverty Line (in Rs.)
|
Tendulkar
|
C.
Rangarajan
|
Per
day per person
|
33
|
46.90
(47)
|
Per
person per month
|
1000
|
1407
|
Per
family of 5, per month
|
5000
|
7035
|
Rural
Poverty Line:
Urban
Poverty Line (in Rs.)
|
Tendulkar
|
C.
Rangarajan
|
Per
day per person
|
27
|
32
|
Per
person per month
|
816
|
972
|
Per
family of 5, per month
|
4080
|
4860
|
Rangarajan
Estimation and controversies:
Ø
C.
Rangarajan has received lot of negative publicity because:
o
He
kept poverty line to be ridiculously low – Rs.32 for rural and Rs.47 for Urban.
o
Therefore
He is insensitive towards the poor.
Ø But Rangarajan never gave
those daily numbers. He had given combined poverty line for a family of five
members- Rs.7035, which is a plausible number. After all, if you live in a family
of five, then some costs will get reduced per head (e.g. rent, light bill, LPG
etc.)
Ø Besides, if a family spending
>7000 per month = their income would be definitely above 7000. So in
reality, Rangarajan has not “insulted” the poor. Infact, He has tried to cover
more poor under BPL & government schemes.
Ø Media has derived those
“insensitive” daily Expenditure figures (Rs.33, Rs.47) by dividing the monthly
Expenditure of five people, then further dividing that number by 30.
Ø If you objectively convert
Rangarajan’s poverty line into purchasing power parity (PPP), it’s $2.44 per
person, per day. And that figure even higher than World Bank estimate! Thus,
Rangarajan included more poor in BPL, than even World Bank would!
Ø Thus, journalists and
politicians have misinterpreted the poverty line issue- just like they
misinterpreted Anti-CSAT movement to be against those 8 easy English MCQs above
Decision Making section!
How 100 million poors increased?
Since Rangarajan raised
poverty line, obviously more people would become “below poverty line”.
Poverty in
|
|
Formula
|
BPL
in
|
Tendulkar
|
27
|
Rangarajan
|
37
|
Difference
|
10
crore = 100 million BPL increased
|
Calorie Expenditure:
Tendulkar
|
Rangarajan
|
Only calorific value in Expenditure
|
Calorie + Protein + Fat
|
Calories
|
Lakdawalla
|
Rangarajan
|
Rural
|
2400
|
2155
|
Urban
|
2100
|
2090
|
Observe that Ranga reduced the calorie requirement-
why?
Because ICMR study report
said so. Besides, over the years use of machinery and vehicles has increased,
so today’s generation doesn’t require that much “calorie”.
Rangarajan also included Expenditure on Protein and
Fats
Gms/day
|
Rural
|
Urban
|
Protein
|
48
|
50
|
Fats
|
28
|
26
|
Tendulkar
|
C. Rangarajan
|
Only counts Expenditure on food.
|
food + nonfood items such as education,
healthcare, clothing, transport, rent
|
----------------
|
§
Urban poverty increased on faster rate (40%) than
rural poverty (19%)
§
This is obvious, because Rangarajan included
non-food items like rent, education etc.
§
These items/services are more expensive in cities
than in villages.
|
Static, fixed line- only calorie
Expenditure.
|
Rangarajan recommends that at any given
point of time,
§
Bottom 35% rural junta always be considered poor
§
Bottom 25% urban junta always be considered poor.
|
-----------------
|
§
Poverty ratios should be disengaged from
entitlements under Government schemes.
§
e.g. cheap food grain quota under Food Security Act
should not be based on BPL-ness, but social-caste census.
|
Monthly Per Capita Expenditure (MPCE): NSSO 68th
Round (2011 – 12)
|
|||
Area
|
Average
MPCE
|
Highest
In
|
% of
Food Expenditure
|
Urban
|
Rs. 2399
|
Haryana
|
38.5%
|
Rural
|
Rs. 1278
|
Kerala
|
48.6%
|
·
This
indicates rural-urban disparity. City folks have more money to spend than
Villagers.
·
Engel’s
law says: when income rises, % of overall income spent on food item decreases.
·
We
can see this happening in urban areas. City folks spending ~39% while villagers
spending ~49% of their income on food.
·
Among
states: Kerala spends the least money
Changing
faces of poverty:
Year
|
Poverty Ratio
|
Number of Poor (in million)
|
||||
Rural
|
Urban
|
Total
|
Rural
|
Urban
|
Total
|
|
Lakdawala
Method
|
||||||
1973-74
|
56.4
|
49.0
|
54.9
|
261.3
|
60.0
|
321.3
|
1977-78
|
53.1
|
45.2
|
51.3
|
264.3
|
64.6
|
328.9
|
1983
|
45.7
|
40.8
|
44.5
|
252.0
|
70.9
|
322.9
|
1987-88
|
39.1
|
38.2
|
38.9
|
231.9
|
75.2
|
307.1
|
1993-94
|
37.3
|
32.4
|
36.0
|
244.0
|
76.3
|
320.3
|
2004-05
|
28.3
|
25.7
|
27.5
|
220.9
|
80.8
|
301.7
|
Tendulkar
Method
|
||||||
2004-05
|
41.8
|
25.7
|
37.2
|
326.3
|
80.8
|
407.1
|
2009-10
|
33.8
|
20.9
|
29.8
|
278.2
|
76.5
|
354.7
|
2010-11
|
25.7
|
13.7
|
21.9
|
216.7
|
53.1
|
269.8
|
Rangarajan
Method
|
||||||
2009-10
|
39.6
|
35.1
|
38.2
|
325.9
|
128.7
|
454.6
|
2011-12
|
30.9
|
26.4
|
29.5
|
260.5
|
102.5
|
363.0
|
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