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 (â¹20 and â¹25 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.
Recommendations
• 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:
• â¹446.68 per capita per month in rural areas
• â¹578.80 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.
6. RANGARAJAN COMMITTEE 2014:
• The committee was set up in the backdrop of national outrage over the Planning Commission’s suggested poverty line of â¹22 a day for rural areas.
Recommendations:
• 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 â¹47 a day in cities and â¹32 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).