2.

Explain, in brief, the methodology used officially by the Government of India to

measure poverty. In what ways does the existing way of measuring poverty differ
from the recommendations of the Suresh Tendulkar Committee and the C.
Rangarajan Committee? You may supplement your answer with comments.

Poverty in India is measured on absolute terms by Planning commission based on

the data provided by National Sample Survey Organization. Under absolute
poverty certain minimum basic standards of living are defined and people living
below these standards are termed in policy as poor or below poverty line. This is
done by determining a poverty line basket and calculating monetary figure of
that basket.
Historically focus of Indias poverty like basket policy has been on consumption
of calories which was first adopted in 1970s on recommendation Algah
committee 1977 and Lakdawalla Committee 1989. It was believed that 2400 kcal
in rural areas and 2100 Kcal in urban areas was sufficient to give good nutritious
health to citizens.
Lakdawala committee retained the mechanism defined by Alagh expert
committee, however disaggregated All India poverty line to State specific
Poverty Line.
Subsequently, it was discovered that the poverty lines, based on declared
nutritional norms (and hence was accepted as an appropriate tool for targeting
food subsidies), have since long under estimated poverty in India. This
methodological slip proved tragic for millions who were in need for subsidized
food from the Public Distribution System but were excluded on the basis of the
under-estimated poverty lines.
An expert group was constituted by the government to review the poverty
estimation methodology, popularly known as the Tendulkar Committee. The new
methodology proposed by the Tendulkar Committee in 2009 has now been
accepted by the government and the 2009-10 poverty estimates recently
published (33.2% for rural and 20.9% for urban India) are based on this changed
methodology.
Largely it adopted same poverty line (Lakdawala) and major departures were
1. It adopted Mixed Reference Period in place of Uniform reference
period.During previous methodologies, a uniform reference period was
used that included 30 days just before the survey for all food and nonfood
items. But Tendulkar group changed reference period to past one year for
5 nonfood items viz., clothing, footwear, durable goods, education and
institutional medical expenses. For other items 30 days reference period
was retained. This is called Mixed reference period
2. Further, it recommended a shift away from basing the Poverty Line basket
(PLB) in caloric intake and towards target nutritional outcomes.
3. It called for an explicit provision in the Poverty Line Basket to account for
private expenditure in health and education
4. Algah committee mentions that it adopted separate PLB for Urban and
rural areas. But Tendulkar committee ended this practice by using a

uniform basket (for both rural and urban) based on previous urban poverty
line basket.
5. Poverty line was in form of Rs per capita per month

These expenditure as per expert group was sufficient to cover food and nonfood
expenditure, including that on health and education. This created furore in public
and government was forced to appoint a new expert group under Dr. Rangarajan.
Expert group submitted its report in 2014 giving per capita monthly
expenditure as Rs. 972 in rural areas and Rs. 1407 in urban areas as poverty
line. It preferred to use Monthly expenditure of Household of five for the poverty
line purpose which came out to be Rs 4860 in rural areas and Rs. 7035 in urban
areas. It argued that considering expenditure of household is more appropriate
than that of individuals. Living together brings down expenditure and as
expenses such as house rent, electricity etc. gets divided into 5 members.
1. It reverted to old system of separate poverty line baskets for Rural and
urban areas, which was unified by Tendulkar group.
2. Instead of Mixed reference Period it recommended Modified Mixed
reference period in which reference periods for different items were taken
as
a. 365-days for clothing, footwear, education, institutional medical
care, and durable goods,
b. 7-days for edible oil, egg, fish and meat, vegetables, fruits, spices,
beverages, refreshments, processed food, pan, tobacco and
intoxicants, and
c. 30-days for the remaining food items, fuel and light, miscellaneous
goods and services including non-institutional medical; rents and
taxes.
3. Again National Urban and Rural poverty lines were converted to State
specific poverty lines
4. Poverty line by the group is also based on Independent survey conducted
by Center for monitoring Indian Economy (CMIE)
5. For normative levels of adequate nutrition average requirements of
calories, proteins and fats based on ICMR norms, differentiated by age,
gender and activity for all-India rural and urban regions is considered.