Poverty Estimation

In 2005, the Suresh Tendulkar committee was constituted by the Planning Commission. The current estimations of poverty are based upon the recommendations of this committee. This committee recommended to shift away from the calorie based model and made the poverty line somewhat broad based by considering monthly spending on education, health, electricity, and transport also.
Poverty Estimation
  • It strongly recommended target nutritional outcomes i.e. instead of calories; intake nutrition support should be counted.
  • It suggested that a Uniform Poverty Basket Line should be used for the rural and urban region.
  • It recommended a change in the way prices are adjusted and demanded an explicit provision in the Poverty Basket Line to account for private expenditure in health and education.
Tendulkar adopted the cost of living as the basis for identifying poverty:
  • The Tendulkar panel stipulated a benchmark daily per capita expenditure of Rs. 27 and Rs. 33 in rural and urban areas, respectively, and arrived at a cutoff of about 22% of the population below the poverty line. However, this amount was such low that it immediately faced a backlash from all section of media and society.
  • Rangarajan committee raised these limits to Rs. 32 and Rs. 47, respectively, and worked out the poverty line at close to 30%. With estimates of Rangarajan committee, Poverty stood at around 30% in 2011-12. The number of poor in India was estimated at 36.3 crores in 2011-12.
  • C. Rangarajan committee was appointed to review the poverty estimation methodology of the Tendulkar Committee.
  • The Rangarajan group took the view that the consumption basket should contain a food component that satisfied certain minimum nutrition requirements, as well as consumption expenditure on essential non-food item groups (education, clothing, conveyance and house rent) besides a residual set of behaviorally determined non-food expenditure.

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