Syllabus Section:  Economy

1. Planning Commission Expert Group (1962):

• Planning Commission Expert Group (1962), working group constituted by the Planning Commission formulated the separate poverty lines for rural and urban areas (₹20 and ₹25 per capita per year respectively).

2. VM Dandekar and N Rath committee (1971) :

• The committee made the first systematic assessment of poverty in India, based on National Sample Survey (NSS) data.

• Unlike previous committees VM Dandekar and N Rath were of the view that poverty line must be derived from the expenditure that was adequate to provide 2250 calories per day in both rural and urban areas.

• The Expenditure based Poverty line estimation, generated a debate on minimum calorie consumption norms.

3. Y.K. Alagh Committee (1979):

• The Task force constituted by the Planning Commission under the chairmanship of YK Alagh, constructed a poverty line for rural and urban areas on the basis of nutritional requirements and related consumption expenditure.

• Poverty estimates for subsequent years were to be calculated by adjusting the price level for inflation.

4. Lakdawala Committee (1993):

• The Task Force chaired by DT Lakdawala, based on the assumption that the basket of goods and services used to calculate Consumer Price Index-Industrial Workers (CPI-IW) and Consumer Price Index- Agricultural Laborers (CPI-AL) reflect the consumption patterns of the poor.

• The committee made the following suggestions:

1. Consumption expenditure should be calculated based on calorie consumption as earlier.

2. State specific poverty lines should be constructed and these should be updated using the CPI-IW in urban areas and CPI-AL in rural areas.

3. Discontinuation of scaling of poverty estimates based on National Accounts Statistics.

5. Suresh Tendulkar Committee (2009):

• Expert group constituted by the Planning Commission and, chaired by Suresh Tendulkar, was constituted to review methodology for poverty estimation and to address the various shortcomings of the previous methods.


• Shift from Calorie Consumption based Poverty Estimation: It based its calculations on the consumption of the items like cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods.

• Uniform Poverty line Basket: The Tendulkar Committee computed new poverty lines for rural and urban areas of each state based on the uniform poverty line basket and found that all India poverty line (2004-05) was:

• ₹446.68 per capita per month in rural areas

• ₹578.80 per capita per month in urban areas

• Mixed Reference Period: The Committee recommended using Mixed Reference Period based estimates, as opposed to Uniform Reference Period based estimates that were used in earlier methods for estimating poverty.

• Tendulkar committee computed poverty lines for 2004-05 at a level that was equivalent, in Purchasing Power Parity (PPP) terms to Rs 33 per day.


• The committee was set up in the backdrop of national outrage over the Planning Commission’s suggested poverty line of ₹22 a day for rural areas.


• Methodology Used: The Rangarajan committee estimation is based on an independent large survey of households by Center for Monitoring Indian Economy (CMIE).

• It has also used different methodology wherein a household is considered poor if it is unable to save.

• Normative and Behavioural level: Poverty line should be based on:

• Normative level of adequate nutrition: Ideal and desirable level of nutrition.

• Behavioral determination of non-food expenses: What people use or consume as per general behavior.

• Nutritional Requirement: For normative levels of adequate nutrition – average requirements of calories, proteins and fats based on Indian Council of Medical Research (ICMR) norms, differentiated by age, gender and activity for all-India rural and urban regions is considered:

1. Calories: 2090 kcal in urban areas and 2155 Kcal in rural areas.

2. Protein: For rural areas 48 gm and for urban areas 50 gm.

3. Fat: For urban areas 28 gm and for rural areas 26 gm.

• Poverty Threshold: Persons spending below ₹47 a day in cities and ₹32 in villages be considered poor.

• Based on this methodology, Rangarajan committee estimated that the number of poor were 19% higher in rural areas and 41% more in urban areas than what was estimated using Tendulkar committee formula.

• Modified Mixed reference period: Instead of Mixed reference Period (MRP) it recommended Modified Mixed Reference Period (MMRP).