Do poverty estimates actually cover the poor?

By ZRG | Last Updated: Tuesday, July 8, 2014 - 10:16

Trithesh Nandan/ZRG

Chandu pedals his rickshaw from the Sector 16 Metro station to Film City in Noida earning roughly Rs. 400 per day. A migrant from Bihar, Chandu is the sole breadwinner for his family. Now in his late 20s, he looks older than his age. Even though C. Rangarajan has come out with new estimates on poverty line, it doesn’t bother people like Chandu who have faced poverty without officially being part of it.

Is this yet another statistical exercise or just a poverty guessing game? Last week, Raghuram Rajan the Reserve Bank of India (RBI) Governor, said that it did not matter whether there was a precise definition on poverty figures.

According to Rangarajan’s estimates, the number of India’s poor may rise by 10 crore at 363 million (36.3 crore) or 29.6 percent of the population against 269.8 million (21.9 percent) by the Suresh Tendulkar committee. The committee also raised the daily per capita expenditure from Rs 27 to Rs 32 for rural poor and to Rs 47 from the existing Rs 33 for those in urban areas in calculating the total number in the country.

If the Rangarajan committee report is accepted, will Chandu benefit? He spends more than Rs. 47 per day which beats the committee’s benchmark for poverty. If that is the case, he cannot be classified as poor. Chandu doesn’t have a bank account, neither Rashtriya Swasthya Bima Yojana (RSBY) nor other such benefit cards. He is still dependant on his village mahajan for loans.

Harsh Mander, a former member of National Advisory Council (NAC), said that problems arise because such estimates only marginally touch subsistence level while calculating poverty estimates. “The Rangarajan Committee report is a marginal improvement from the earlier estimates. As most of the people work in unorganised sectors where there is hardly wage protection, social security and barriers prevail, benefits don’t reach the bottom level,” he said.

According to Mander, the Arjun Sengupta Committee report is a much better estimate in calculating poverty. The Sengupta committee put number of poor at 77 percent, the N.C. Saxena committee report put it at 50 percent and Suresh Tendulkar committee revised estimate of poverty in India for 2004-05 to 37.2 percent from 27.5 percent. The World Bank has its own estimate of poverty at 41.6 percent. “There should be transparent indicators to calculate the number of poor,” Mander said.

“The Rangarajan committee has gone back to the Lakdawala Committee, which calculated poverty on the calorie intake. If you base it on calorie intake, poverty estimates have their own problem,” said Himanshu, Assistant Professor at JNU. According to him, if you see poor states like Bihar and Uttar Pradesh, the calorie intake is better than Kerala and Tamil Nadu, the more developed states.

For long the poverty estimates in India has been a touchy issue and that’s why the Rangarajan committee has received flak from leaders of different political parties. Saugata Roy, Trinamool Congress Party (TMC) leader, told media, “Economists have always varied in their opinion on what should be the poverty line. There are many studies done in this matter. It should not be taken as sacred.” Sitaram Yechury, leader of CPI (M) similarly said, “What mockery are you unleashing on the poor of this country?”

In India, counting the number of poor is a century old exercise. Dadabhai Naoroji, the doyen of Indian nationalism, had done first estimation in his book ‘Poverty and the Un-British Rule in India’ where he formulated a poverty line ranging from Rs 16 to Rs 35 per capita per year, based on 1867-68 prices. A decade before independence, the National Planning Committee (NPC) estimated a poverty line ranging from Rs 15 to Rs 20 per capita per month.

Since Independence, the government has constituted several committees on poverty estimation: VM Dandekar and N Rath (1961), Alagh Committee (1979), Lakdawala Committee (1993), Tendulkar Committee (2009).

“It is a shame that we are still discussing poverty after seven decades of independence,” MJ Akbar, BJP spokesman told media.



First Published: Tuesday, July 8, 2014 - 10:16

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