India could be overstating poverty levels as the private final consumption estimates captured by the National Income Accounts (NIA) is nearly twice as much as the National Sample Survey Organisation (NSSO) estimates for consumption expenditure of households in 2011-12.
At present, poverty ratios are calculated using the NSSO data. The C. Rangarajan Committee on poverty estimation, that will submit its findings by the month-end, is likely to report that it has so far not been able to reconcile the differential between the two sets of data, a Planning Commission source told The Hindu . Dr. Rangarajan could not be reached for comment as he was travelling.
The Planning Commission’s latest estimate of the national poverty line was at consumption expenditure level of Rs. 33.33 in cities and Rs. 27.20 in villages per day per person. Indians below this consumption poverty line fell dramatically from 41 crore in 2004-05 to 27 crore in 2011-12. The irreconcilable differential of the two data sets means even these estimates of poverty levels could be an overstatement.
“The exact extent of overstatement of poverty could not be calculated as there is no way to find out exactly who is under-reporting consumption,” the source said. “However, since it cannot be only the rich who are under-reporting consumption, it can be said that poverty is being overstated.”
The UPA had in May 2012 set up the five-member expert group to revisit the way poverty is estimated following criticism of the Planning Commission's estimates based on the Tendulkar panel norms. The Commission had announced that the number of poor stood reduced from 40.7 crore to 35.5 crore during the period 2004-05 to 2009-10.
A source in the Central Statistics Office explained the weaknesses of the NSS estimates.
