Poverty Estimates

The Expert Group (Lakdawala Committee, 1993) An Expert Group on 'Estimation of Proportion and Number of Poor' was constituted under the Chairmanship of Professor D.T. Lakdawala, former Deputy Chairman of Planning Commission, which submitted its report in 1993. The Expert Group recommended that the poverty line approach based on a calorie norm and linked with a fixed consumption basket might be continued. However, it recommended that the state 'specific poverty lines be worked out. #e Expert Group observed that it was better to rely exclusively on the NSS for estimating the poverty ratios. #e Government of India accepted the recommendations of the Expert Group with minor Economic and Social Development'35 modifications in 1997. #e poverty estimates from 1973-74 to 2004-05 based on the methodology recommended by the Expert Group are given in the table below:

Percentage and Number of Poor based on the methodology recommended by Lakdawala Committee

Poverty Ratio (%) Number of Poor
(in million)
Year Rural Urban Total Rural Urban Total
1973-74 56.4 49.0 54.9 261.3 60.0 321.3
1977-78 53.1 45.2 51.3 264.3 64.6 328.9
1983 45.7 40.8 44.5 252.0 70.9 322.9
1987-88 39.1 38.2 38.9 231.9 75.2 307.1
1993-94 37.3 32.4 36.0 244.0 76.3 320.3
2004-05 28.3 25.7 27.5 220.9 80.8 301.7

Tendulkar Committee (2009)

An Expert Group headed by Professor Suresh D. Tendulkar was constituted in 2005 to review the methodology for official estimation of poverty and recommend changes in the existing procedures. The Committee submitted its report in 2009. In comparison with the procedure suggested by the 1993 Expert Group and used in the official poverty estimates, Tendulkar Committee's approach made four major departures:

(i) consciously moving away from calorie anchor;

(ii) recommending to provide a uniform 'poverty line basket' (PLB) to both the rural and urban population;

(iii) recommending a price adjustment procedure that is predominantly based in the same data set that underlies the poverty estimation, and

(iv) incorporating an explicit provision in price indices for private expenditure on health and education.

Tendulkar has computed the poverty lines at all India level as MPCE of Rs. 447 for rural areas and Rs. 579 for urban areas in 2004-5 and Rs. 673 for rural areas and Rs. 860 for urban areas in 2009-10. Tendulkar's estimates are given in the following table.

Number and Percentage of Poor based on the methodology recommended by Tendulkar Committee

Number of poor Poverty Ratio (%)
Year Rural Urban Total Rural Urban Total
1993-94'' 328.6 74.5 403.7 50.1 31.8 45.3
2004-05'' 326.3 80.8 407.1 41.8 25.7 37.2
2009-10'' 278.2 76.5 354.7 33.8 20.9 29.8
Annual Average
Decline: 1993-4 to 2004-5
(% point per annum) 0.75 0.55 0.74
Annual Average
Decline: 2004-5 to
2009-10 (% point per
annum) 1.60 0.96 1.48

Based on Tendulkar's cut-offs, the percentage of people living below the poverty line in the country has declined from 37.2 per cent in 2004-5 to 29.8 per cent in 2009-10. Even in absolute terms, the number of poor people has fallen by 52.4 million during this period. Of this, 48.1 million are rural poor and 4.3 million are urban poor. #us poverty has declined on an average by 1.5 percentage points per year between 2004-5 and 2009-10. #e annual average rate of decline during the period 2004-5 to 2009-10 is twice the rate of decline during the period 1993-4 to 2004-5. The poverty estimates indicate that the highest poverty headcount ratio (HCR) exists in Bihar at 53.5 per cent as against the national average of 29.8 per cent. In 2009-10 compared to 2004- 5, Bihar has displaced Odisha as the poorest state, with Odisha's situation improving considerably in 2009-10. Lowest poverty is in Himachal Pradesh (9.5 per cent) followed by Kerala (12 per cent).

No comments yet.

Leave a Reply