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NITI Aayog plays safe on poverty -Sanjeeb Mukherjee & Indivjal Dhasmana
-Business Standard

Not to estimate poverty lines or absolute numbers; will take these from ongoing socio-eco caste census done by states, focus on impact of programmes

Taking note of some hard lessons learnt by its predecessor, the National Institution for Transforming India (NITI) Aayog would not estimate either poverty lines or the number of the poor in the country.

The erstwhile Planning Commission, replaced by the Aayog, had got into a big controversy on these issues, with its calculations on the basis of the National Consumption Expenditure Surveys.

A task force under Aayog Vice-Chairman Arvind Panagariya on poverty alleviation is to not define or compute poverty as an aggregate measure but will look at social indicators to assess the impact of social schemes on the poor.

"We won't determine or decide what is the poverty line as was done by the Rangarajan panel or others before that. The task force would not like to fall into the Rs 33-27 debate, as earlier," a key source said.

He noted states were already undertaking a Socio Economic Caste Census. "What we need to know is whether the programmes launched by the new government are having tangible impact, in terms of tangible outcomes. For this, we need to look at indicators," the source said.

The number of poor as calculated by the socio-caste census would give a rough idea of the poverty line in each state.

It has been decided to include households without shelter, destitutes/living on alms, manual scavengers, primitive tribal groups and legally released bonded labourers in the Below Poverty Line list. These households will have the highest priority for inclusion in the list. Other households will be identified as poor from the angle of deprivation they are subject to.

C Rangarajan, chairman of the former prime minister's economic advisory council, and who headed a panel to come out with a methodology to define poverty and estimate the number of poor after the Planning Commission courted controversy, said: "I think for implementation of programmes, different determinants can be calculated and programmes can, thus, be monitored."

However, if one wants to measure the change in poverty, one needs the poverty line, he said. This could be the official one or one used by different agencies or academicians, depending on the approach.

One can use the World Bank's poverty line of $1 a day or $1.25 a day, he said but cautioned that these are not based on any specific study of a country.

Saumitra Chaudhuri, former member of the Planning Commission, said the NITI Aayog ideally should not do poverty computation. The whole idea should be on how to make the lives of the poor better through short-term and long-term measures.

"If you have an absolute measurement of poverty, say, anyone spending less than $1 dollar a day is poor, you need not change it after every five years. If anyone wants to focus socio-economic policies towards elimination of poverty, they should target the absolute number and not get caught in the debate of who is poor and who is not," he said.

The Rangarajan panel had found 29.5% of India's population was poor in 2011-12 against 21.9% estimated under the previous methodology which had drawn sharp criticism from various quarters. In absolute terms, 363 million people were below the poverty line that year, higher by about 93 million over the 269.8 million estimated earlier.

However, the poverty rate - the number of poor as a proportion of the population - came down swifter in the estimates of the Rangarajan panel than calculated earlier on the Suresh Tendulkar methodology.

A greater number of people were classified under poverty in 2011-12 as the Rangarajan committee raised the poverty line compared to that fixed earlier. The Rangarajan panel had said anyone spending up to Rs 47 a day in urban areas and Rs 32 in villages would be considered poor as of 2011-12. The Tendulkar methodology had pegged these levels at Rs 33 in urban areas and Rs 27 in villages. By either method, poverty was reduced during 2009-10 to 2011-12 (the first three years of the second UPA government).

For 2009-10, the Tendulkar methodology had pegged the poverty line at Rs 22 in villages and Rs 29 in urban areas. These were raised to Rs 27 and Rs 40, respectively, by the Rangarajan committee.

All these numbers had stirred controversies, with political parties and social activists poking fun at the Planning Commission over these numbers.