Recent Estimates of Poverty India

K.Rajendran, Research Scholar, Department of Management Studies, Pondicherry University.. kraj1962@gmail.com

The Planning Commission defined poverty line as a minimum consumption expenditure requirement for an average food energy norm of 2400 and 2100 calories per capita per day for rural and urban areas respectively. Since 1972, poverty in India is

measured on the basis of calorie intake, 2100 calories in urban area and 2400 calories in rural area. So far Planning Commission, the nodal agency to decide poverty in India, followed the norm of per-capita expenditure of Rs.356.30 /- per month in rural areas and Rs.538.60/- per month in urban areas which meets the daily calorie requirement 2400 in rural areas and 2100 in urban areas respectively. Planning Commission during 2004-05 estimated 27.5% of Indian population lives below poverty line and during 2006 it estimated 28.5% of population are poor. In other words it has estimated that 27.5% of the population was living below poverty in 20042005, down from 51.3% in 19771978, and 36% in 1993-1994. Table 1 below highlight the poverty level in India for the period 1973 to 2004. Table 1 Estimate of poverty from 1973 to 2004 Year Percentage of people below poverty No. of persons below poverty line (in line Rural Urban Combined 56.44 49.01 54.88 45.65 40.79 44.48 37.27 32.36 35.97 28.30 25.70 27.50 Source: Planning Commission, GoI. Crores) Rural 26.13 25.20 24.40 22.09 Urban 6.00 7.09 7.63 8.08 Combined 32.13 32.29 32.04 30.17

1973 1983 1993 2004

Tamil Nadu Journal of Cooperation, Vol. 10 No 7,pp3639.

Recently new estimates in poverty came into picture and it is a clear indication that there is no poverty to arrive poverty statistics in India. Estimates in poverty ranges from 28 percent to 77 percent, different estimates by different agencies or economists gave different and confusing statistics about poverty, which indicates; there are doubts among social scientists and economists to decide who is poor and who is not poor. . Table 2 Recent Estimates of Poverty India Estimate by Arjun Sengupta Committee (2007) N.C.Saxena Committee (2009) Suresh D.Tendulkar Committee (2009) World Bank (2009) Asian Development Bank (2009) Arjun Sengupta Percentage of population below poverty line 77 50 37.2 41.6 54.8

Arjun Sengupta of National Commission for Enterprises in Unorganised Sector adopted Rs.20/- per capita per day for deciding poverty, without giving any basis for the norm of adopting Rs 20/day, and estimated that 77 percent of Indians are poor. The main criticism is how to live with Rs.20/- per day and the report was not accepted by the GoI or any state Govt. Saxena Committee Saxena Committee constituted by the Rural Development Department of the GoI submitted its report in June 2009, reported 50% population below poor (10.87 crore families). The Committee adopted 5 scores instead of 13 indicators. The Saxena the planning commission norm that with Rs.356/- or Rs.539/-

Committee criticized

cannot buy more than 1800 calories and Rs.700 and Rs.1000 is required The Committee fixed Rs.700/- per month for rural and Rs.1000/- per month for urban. (The Planning

3 Commission already informed that FAO fixed 1800 calorie per day)Without specifying the justification for poverty line the Committee considered calorie intake and concluded there is a decline in calorie intake of poor people. Tendulkar Committee Suresh D. Tendulkar, former Chief of Economic Advisory Council to Prime Minister, in his report (2009), stated that 37.2% of population in India is poor (8.32 crore families) and it reported an increase of 10 per cent from 27.5%(6.52 crore families) of the estimate of the Planning Commission report. Tendulkar Committee was not in favour of calorie norms and report included expenditure as health and education. The Committee fixed monthly expenditure of Rs.578.80 per month from urban and Rs.446.68 per month for the rural poor. The combined expenditure for poverty line is Rs.483.60 and the Committee adjusted various prices in the States and rural and poor. The report of the committee is widely accepted by the economists, planners and social scientists in addition to the Administrators and it is expected that Government of India will accept the report of the committee. World Bank During August 2009 itself two international organisations viz. World Bank and Asian Development Bank released reports for India. World Bank adopts $1.25 (Rs.56.13 per day) and World Bank says 456 million of Indian population is poor i.e. 41.6% of population. It estimated that 456 million Indians (42% of the total Indian population) now live under the global poverty line of $1.25 per day, a third of the global poor now reside in India. During the same month, The Asian Development Bank released its report, adopting $1.35 per day, and it reported 622 million in India (54.8 %) as poor. It

4 concluded that among all Asian countries, India has the second highest poverty, after Nepal. It is very important to point out the conclusion of thee World Bank , in China, during 1990, 60% population was identified as poor whereas it was only 16% in 2005, whereas in India 51% population were poor in 1990, but it was 41.6% in 2005. Millennium Development Goal (MDG) fixes a target for reducing poverty between 1990 and 2015.It stipulated that the percentage of poor in 1990 was 36% and this has to be reduced to 18% in 2015.As per our Planning Commissions report poverty reduced to 27.50 percent (8.32 crore families)after implementing several poverty

alleviation and development programmes. But the report submitted by Tendulkar to the planning commission which may be accepted indicated 37.2 %( 6.52 crore families) as poor. But the question is how to achieve the MDG? Since the current poverty level is higher than what was estimated during 1990 for the purpose of deciding target for the MDG, the question is whether it is possible to achieve MDG? It is the right time to evaluate the effectiveness of the anti poverty programmes since in absolute terms number of poor households has increased in our country.