Rural India poorer than estimated: Tendulkar Panel


It is official now that the poverty in India is much more than earlier estimated. The Suresh Tendulkar Committee report submitted this month (December 09) estimates poverty in India at over 37 per cent (2004-5) and not at 28 per cent as calculated earlier. With recent price rise in food items factored, the current level could be even higher (See the link of the report below).

The Government of India had set up the Tendulkar Committee after facing criticism about under-reporting its official estimates of rural poverty. According to the committee’s estimates, the overall poverty rate came to be 37.2 percent and not 27.5 per cent as was estimated in 2004-05. Similarly, poverty in rural India stood at 41.8 percent and not 28.3 percent. Urban poverty rate in 2004-05 came to be 25.7% according to the new estimates. States like Orissa, Bihar, Madhya Pradesh, Chhattisgarh and Jharkhand are found to be living under abject poverty.

But the new poverty estimates may come as a shock as well as embarrassment to the Planning Commission since the poverty rate of 27.5 per cent during 2004-05 was based on its own conservative estimates, and as it turns out now, which is much lower than the figures provided by the Tendulkar Committee Report.

The Prime Minister and his group of advisors were at loggerheads with the states earlier as the latter were demanding a higher number of BPL (Below the Poverty Line) cards to be distributed. In a way, the Centre was pushing for official figures of poverty prepared by the Planning Commission to underestimate poverty levels. The concept note on National Food Security Act held the view that the number of BPL households would be fixed by the Central Government based on the recent poverty estimates of the Planning Commission (presently of 2004-05). As against the accepted number of 6.52 crore BPL cards, the states had distributed 10.68 crore cards by end of March, 2009.

However, with the Tendulkar Committee Report being tabled at a higher figure for poverty during 2004-05, it seems that the states have won the first round of the battle. This means that if the Centre decides to enact the National Food Security Act now, it will have to distribute more number of BPL cards. This also proves as a turning point for the civil society activists and NGOs who were demanding for right to food for all poor people.

But there are thorns on the road to poverty reduction. The Tendulkar Committee has steered away from the calorie norm set in 1973-74, which is the money required to access 2100 calories in urban areas, and 2400 calories in rural areas. Rather the new poverty line has been defined on a wider access to commodity and services like health, sanitation and education. The new all-India average rural poverty line is set at a monthly expenditure of Rs 446.68; the national urban poverty line at Rs 578.8 a month. Poverty line is now a per capita expenditure of Rs 12 per day.

In short, the Tendulkar Committee replaces the calorie measurement (proposed by Dandekar and Rath in 1971) by a cost-of-living index i.e. how much money a person spends. This is because calorie intake that used to be taken as a criterion since 1970s is irrelevant today since people in rural areas consume far less calories for the same income today compared with what they did in the early 1970s. This deviation in methodology to estimate poverty may generate heat among economists, policy-makers and the civil society.

The Report also taunts the much hailed theory that 'trickling-down' of growth can reduce poverty over time. This is because despite witnessing annual growth rates of 6-7 percent, there has been little progress in poverty reduction in the recent years.

Earlier Prof. Arjun Sengupta (www.nceus.gov.in) claimed that about 77% of Indian population was stuck below the average per capita expenditure of Rs. 20/- per day. The NC Saxena Committee (constituted by the Rural Development ministry) was asked to recommend criteria for identification of BPL families in rural India. It held the view that 50% of India should be brought under the ambit of the poverty line. The Government rejected both these reports and their recommendations.

As per the revised estimates by the World Bank, the percentage of people living below the $1.25 a day decreased from 60 percent in 1981 to 42 percent in 2005.


Further readings

Tendulkar panel claims every third Indian is poor by Rupashree Nanda, 11 December, 2009
http://ibnlive.in.com/news/poverty-in-india-increased-by-1
0-per-cent-report/106886-3.html?from=tn

Every third Indian under poverty line, says report, 14 December 2009
http://southasia.oneworld.net/todaysheadlines/every-third-
indian-under-poverty-line-says-report

An honest measure of poverty by Josy Joseph, DNA, 14 December, 2009
http://www.dnaindia.com/india/report_an-honest-measure-of-
poverty_1323446

Tendulkar panel report on poverty by month-end: Montek, 4 November, 2009
http://in.news.yahoo.com/20/20091104/372/tbs-tendulkar-pan
el-report-on-poverty-by.html

37.2% of India is in poverty by criterion of consumption by P Vaidyanathan Iyer and Priyadarshi Siddhanta, 9 December, 2009
http://www.expressindia.com/latest-news/37-2-of-India-is-i
n-poverty-by-criterion-of-consumption/551849/

Number of poor in India rises by 10%, Rediff.com, 11 December, 2009
http://business.rediff.com/report/2009/dec/11/number-of-po
or-in-india-rises-by-10-percent.htm

Food Security Bill: No consensus yet on how to measure poverty, Infochange
http://infochangeindia.org/200907147831/Poverty/News/Food-
Security-Bill-No-consensus-yet-on-how-to-measure-poverty.h
tml

Poverty line set to rise, number of poor to swell by Chetan Chauhan, The Hindustan Times, 12 October, 2009
http://www.hindustantimes.com/News-Feed/newdelhi/Poverty-l
ine-set-to-rise-number-of-poor-to-swell/461409/Article1-46
4024.aspx

Poverty up, social schemes to get boost by Pradeep Thakur, The Times of India
http://epaper.timesofindia.com/Default/Scripting/ArticleWi
n.asp?From=Archive&Source=Page&Skin=TOI&BaseHr
ef=CAP/2009/12/15&PageLabel=1&EntityId=Ar00108&
;ViewMode=HTML&GZ=T

The Great Poverty Debate by Mansukh Kaur, World Sikh News
http://worldsikhnews.com/15%20July%202009/The%20Great%20Po
verty%20Debate.htm

More Indians in 'extreme poverty', BBC, 21 August, 2009
http://news.bbc.co.uk/2/hi/south_asia/8214061.stm

Political Sociology of Poverty In India: Between Politics of Poverty and Poverty of Politics by Anand Kumar
http://www.esocialsciences.com/data/articles/Document11011
200996.388491E-02.pdf

http://planningcommission.gov.in/eg_poverty.htm
http://rural.nic.in/latest/rpt_bpl_census2009.pdf
http://planningcommission.gov.in/news/prmar07.pdf

The Challenge of Employment in India: An Informal Economy Perspective, Volume-I, Main Report, National Commission for Enterprises in the Unorganised Sector (NCEUS), April, 2009, http://nceus.gov.in/:

Data and dogma: the great Indian poverty debate by Angus Deaton and Valerie Kozel, September 2004, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=593864

Poverty Estimates for 2004-05, Government of India Press Release, New Delhi, March, 2007, http://planningcommission.gov.in/news/prmar07.pdf

Poverty and Hunger in India: What is needed to eliminate them by Arvind Virmani, Working Paper No. 1/2006-PC, Planning Commission, February 2006,
http://planningcommission.gov.in/reports/wrkpapers/wk_pov106.pdf

New data show 1.4 billion live on less than $1.25 a day, but progress against poverty remains strong,
http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUT
HASIAEXT/INDIAEXTN/0,,contentMDK:21880805~pagePK:141137~pi
PK:141127~theSitePK:295584,00.html




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