The government has constituted one more expert group to re-examine the methodology for fixing a poverty line and estimating the incidence of poverty in the country. Changes in average incomes and consumption patterns over time may require review and revision of the approach currently in use. However, the last such review of the methodology originally recommended by the Lakdawala committee (1993) was undertaken after more than a decade by the Suresh Tendulkar Committee. The Tendulkar committee was constituted in December 2005, submitted its report in November 2009 and its recommendations were formally accepted only in 2011. The decision to revisit the matter again so soon suggests the government is finding it difficult to offer a credible estimate of what can be considered a consumption basket and level of expenditure that would provide a definition of poverty. This lack of credibility stems from multiple sources. The first is the absolute value of the poverty line. Few are willing to accept the official position that a measly Rs. 32 a day in urban areas or Rs. 26 a day in rural areas in 2010-11 was adequate to lift a person out of poverty. The second is evidence that while the Lakdawala committee had anchored the poverty estimate on a minimum calorific intake, the current poverty line excludes from the poor those whose calorific intake falls far short of the Lakdawala minimum. Third are the estimates of the incidence of poverty at the level of the nation and the States yielded by the official poverty lines, which are seen as too low to be acceptable. This is also a material issue since these estimates are being used to identify those who should be given the benefit of state support as part of the misplaced “targeting” of welfare programmes.

These controversies demarcate the task of the new committee headed by C. Rangarajan. Rather than seek a number that sets a cap on access to state programmes, it should define what in the current historical and social context could be considered a minimally acceptable level of consumption expenditure. To do so it should identify a defensible anchor (like calorific intake) or set of anchors to which poverty line estimates would be tethered for a reasonable period into the future. And, finally, it should find a robust methodology that would generate estimates that allow inter-temporal comparisons of poverty incidence so as to assess the impact that the path of development being pursued has had on poverty levels. These are objectives that must be met if the exercise is not to be seen as one more attempt to obfuscate uncomfortable truths.


Poverty and electoral prioritiesJanuary 29, 2015

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