ICP data validate Tendulkar poverty line

The Tendulkar panel had estimated the national poverty line at Rs. 902 per capita per month or Rs 30 per day.

The recently released International Comparison Program (ICP) data have provided an independent, international validation of the poverty line fixed by the Suresh Tendulkar committee, which is being reviewed by the C. Rangarajan committee for a likely revision.

Since the ICP’s purchasing power parities (PPPs) estimate pegs $1 at Rs. 15.1 in 2011, the World Bank poverty line of $2 per capita per day works out to Rs. 30.2 or Rs. 906 per capita per month. The Tendulkar methodology had estimated the national poverty line for 2011-12 at Rs. 902 per capita per month.

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>Tendulkar poverty line faced sharp criticism after the Planning Commission, using it as the basis, announced that the number of poor fell from 40.7 crore to 27 crore from 2004-05 to 2011-12. Following the criticism, the UPA government set up a five-member expert group headed by Dr. Rangarajan, who chaired the Economic Advisory Council of the then Prime Minister Manmohan Singh, in May 2012 to review and if necessary, revise it. The group is expected to submit its report to Prime Minister Narendra Modi soon.

“That it has turned out to be consistent with the independent evaluation of the ICP reaffirms that, given the database we have, the Tendulkar poverty line works very well for the economic objective of identification of the poor and for making comparisons across time,” said National Institute of Public Finance and Policy Professor N.R. Bhanumurthy. “Where the Tendulkar Poverty Line fails is in the political and the emotional quotient.”

The ICP is a worldwide statistical operation involving 199 countries and agencies such as the World Bank. It produces internationally comparable price and volume measures for the Gross Domestic Product (GDP) of countries. It had ranked India’s GDP behind only that of the U.S. and China. But in terms of per capita GDP, India was ranked 129th.