Current General Studies Magazine (October 2014)
General Studies - III (Economy Based Article - Rangarajan
Committee Poverty Estimates)
The expert group headed by the former PMEAC Chairman estimated that the
number of poor in India was much higher in 2011-12 at 29.5 % of the population
Defending his calculation that three out of 10 in India are
poor, former PMEAC Chairman C Rangarajan on Monday said poverty numbers provided
by him are not conservative estimates and they are at par with global standards.
The expert group headed by Dr. Rangarajan dismissed the
Suresh Tendulkar Committee methodology on estimating poverty and estimated that
the number of poor in India was much higher in 2011-12 at 29.5 per cent of the
As per the Rangarajan panel’s estimates, three out of 10 in India would be
poor. Estimates based on Tendulkar committee methodology, had pegged the poverty
ratio at 21.9 in 2011—12.
“I dont think that it is conservative (poverty) estimates. In my view it is
reasonable estimates. We have derived poverty estimates independently,” Mr.
Rangarajan told in an interview to a private channel.
He was responding to the criticism that anyone spending more than Rs 47 per
day in cities and Rs 32 in villages would not be poor.
Elaborating further he said, “The World Bank also talks about purchasing
power parity terms. The minimum expenditure per day. They are talking about
about USD 2 per day whereas our estimates comes to USD 2.4.
Therefore it (our poverty estimates) is in keeping with the international
He explained that the benefits are not being provided on the basis of any
poverty line as in the case of food security law which would benefit 67 per cent
of the population.
The noted economist believes that it is measure of poverty and measure of
understanding how economy is moving. But apart from it there is no immediate
He urged the people to look at the poverty line in terms of a household’s
consumption expenditure per month which is estimated at Rs 4,860 in villages and
Rs 7,035 for cities for a family of five people.
Apart from the private consumption expenditure, people also benefit from
public expenditure on health, education and other facilities, he said, adding:
“poverty line is at appropriate level“.
“All of these spendings have gone up in the recent past. That explains why
urban poverty ratio is much higher in our estimation,” he said.
As per the report submitted by Mr. Rangarajan to Planning
Minister Rao Inderjit Singh earlier, persons spending below Rs 47 a day in
cities would be considered poor, much above the Rs 33—per—day mark suggested by
the Suresh Tendulkar Committee.
As per Rangarajan panel estimates, a person spending less than Rs 1,407 a
month (Rs 47/day) would be considered poor in cities, as against the Tendulkar
Committee’s suggestion of Rs 1,000 a month (Rs 33/day).
In villages, those spending less than Rs 972 a month (Rs 32/day) would be
considered poor. This is much higher than Rs 816 a month (Rs 27/day) recommended
by Tendulkar Committee.
In absolute terms, the number of poor in India stood at 36.3
crore in 2011—12, down from 45.4 crore in 2009—10, as per the Mr. Rangarajan
panel. Tendulkar Committee, however, had suggested that the number of poor was
35.4 crore in 2009—10 and 26.9 crore in 2011—12.
(Source- The Hindu)
1Q. Discuss the highlights of the Rangarajan report on poverty and
methodology recommended by the expert group for the estimation of the poverty.