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Now, Planning Commission lowers the poverty line-K Balchand

The Planning Commission on Monday released the latest poverty estimates for the country showing a decline in the incidence of poverty by 7.3 per cent over the past five years and stating that anyone with a daily consumption expenditure of Rs. 28.35 and Rs. 22.42 in urban and rural areas respectively is above the poverty line.

The new poverty estimates for 2011-12 will only add to the furore triggered by the Commission's affidavit in the Supreme Court in October in which the BPL cap was pegged at an expenditure of Rs. 32 and Rs. 26 by an individual in the urban and rural areas respectively at the going rate of inflation in 2010-11.

Eventually, Union Minister of Rural Development Jairam Ramesh and Planning Commission Montek Singh Ahluwalia jointly set aside the cap suggested by the Tendulkar Committee and set up a new committee to work out a new methodology for identifying the BPL households.

Mr. Ramesh told The Hindu that the present system had to be continued till a new one was worked out and that would be done only after the Socio-economic and Caste Census was completed.

Similarly, Planning Commission members Abhijit Sen and Mihir Shah separately underlined the need to adopt the same methodology to understand the impact of government spending on the people and across the States over a period of time.

Mr. Sen clarified that the figure of expenditure in the Supreme Court affidavit had been arrived at by adjusting the figures for 2004-05 with the prevailing inflation rate in 2011-12 and not based on the survey conducted across the country.

He said the survey for 2011-12 is likely to be completed by July and the report would be released in December.

Dr. Shah told The Hindu that government programmes had been delinked from the poverty line estimated on the basis of the Tendulkar methodology which was only being used to understand the impact of government programmes over a period of time.

Accepting that the poverty line was linked to the PDS system, Mr. Sen said the Food Security Bill had defined poverty in such a way that it would have a bearing on the beneficiary.

He said Parliament, the government and the Supreme Court would together decide the people who should be brought under the food security entitlement net.

The impact of the new list will be felt on the Rural Development Ministry schemes, particularly those availing various kinds of pension under the National Social Assistance Programme.

As per the Household Consumer Expenditure Survey for 2009-10, 29.9 per cent of the population alone were under the Below Poverty Line (BPL) from 37.2 per cent in 2004-05.

Rural poverty

Rural poverty has declined by eight percentage points, from 41.8 per cent to 33.8 per cent, and urban poverty by 4.8 per cent, from 25.7 per cent to 20.9 per cent.

At the national level, anyone earning Rs. 672.8 monthly that is earning Rs. 22.42 per day in the rural area and Rs. 859.6 monthly or Rs. 28.35 per day in the urban area is above the poverty line. Population as on March 1, 2010 has been used for estimating the number of persons below the poverty line.

The total number of people below the poverty line in the country is 35.46 crore as against 40.72 crore in 2004-05. In rural areas, the number has come down from 32.58 crore five years ago to 27.82 crore and the urban BPL number stands at 7.64 crore as against 8.14 crore five years ago.

One of the most astonishing revelations is that poverty has actually gone up in the north-eastern States of Assam, Meghalaya, Manipur, Mizoram and Nagaland.

Even big States such as Bihar, Chhattisgarh and Uttar Pradesh registered only a marginal decline in poverty ratio, particularly in the rural areas, whereas States such as Himachal Pradesh, Madhya Pradesh, Maharashtra, Odisha, Sikkim, Tamil Nadu, Karnataka and Uttarakhand saw about 10 per cent decline in poverty over the past years.

States with high incidence of poverty are Bihar at (53.5 per cent), Chhattisgarh (48.7 per cent), Manipur (47.1 per cent), Jharkhand (39.1), Assam (37.9 per cent) and Uttar Pradesh (37.7 per cent).

However, it is in poverty-ridden Odisha that monthly per head expenditure of just Rs. 567.1 and Rs. 736 in rural and urban areas respectively puts one above the poverty line, while in Nagaland, where the incidence of poverty has gone up, the per capita consumption expenditure of Rs. 1016.8 and Rs. 1147.6 in rural and urban areas puts one above the poverty level.

Among social groups in the rural areas, Scheduled Tribes (47.4 per cent) suffer the highest level of poverty, followed by Scheduled Castes (42.3 per cent), Other Backward Castes (31.9 per cent) as against. 33.8 per cent for all classes.

In rural Bihar and Chhattisgarh, nearly two-third of the SCs and the STs are poor where as in States like Manipur, Orissa and Uttar Pradesh it is more than 50 per cent.

In urban areas, 34.1 per cent of SCs, 30.4 of STs and 24.3 per cent OBCs fall under this category against 20.9 per cent for all classes.