Number of poor to rise under Rangarajan formula

The Rangarajan Committee is likely to recommend a formula for identifying the poor that places a significantly higher number of Indians below the poverty line than the methodology adopted by the Tendulkar Committee. If the Modi Government accepts this recommendation, it will mean more than 370 million Indians were below the poverty line (BPL) in 2011-12 as against the Tendulkar panel’s estimate of 270 million.

The Rangarajan Committee’s approach is to delink the estimation of poverty from a fixed level of consumption. The Committee’s recommendation is that the bottom 35 per cent of rural Indians at any given time (based on monthly consumption) be defined as poor, a high-level source told The Hindu.

In the case of urban Indians, the cut off will be at 25 per cent, the source added. “We have recommended a relative poverty line as against an absolute one,” a member of the Rangarajan Committee said. The Tendulkar formula is for an absolute Poverty Line. The Committee is to submit its report on Tuesday.

The Rangarajan panel’s Poverty Line formula is not for use for inter-temporal poverty comparisons; rather it is only for identifying the poor at any point in time for the purpose of policy-making and targeting,” sources told The Hindu.

The earlier Tendulkar Committee’s poverty line faced sharp criticism after the Planning Commission, based on its norms, announced that the number of poor stood effectively reduced from 40.7 crore to 27 crore during the seven-year period 2004-05 to 2011-12.

Following the criticism, the UPA government had in May 2012 set up a five-member expert group headed by Chairman of the then Prime Minister Manmohan Singh’s Economic Advisory Council (EAC), C. Rangarajan to review and even revise it.

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Printable version | May 6, 2021 3:16:28 AM |

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