Finally, a panel to count the number of poor people in the country

Two years into the 11th Five Year Plan, the rural development ministry has finally set up an expert panel to conduct a survey across Indian states and ascertain the number of poor people in the country. The ministry is supposed to start work on a survey of the population below the poverty line (BPL) in the first year of every Five Year Plan.

Former rural development secretary MShankar will head the committee that should have been set up by 2007 in order to effectively identify beneficiaries for the Centre?s new programmes aimed at poverty alleviation. The committee would first need to lay down the modalities and parameters to be included in the questionnaires before beginning the ground-level survey. This would mean that the results may not be out before the end of 2009, at best.

The committee would first look at revising the 14 parameters laid out by the earlier Sajeeva Reddy committee to calculate the BPL figures in the states.

?The 14-point eligibility criteria that formed the basis for concluding the number of BPL households in the states, has been found to be flawed. So the Shankar committee would first revise the criteria and then do the survey,? Rita Sharma, secretary, rural development ministry told FE.

Incidentally, an expert group headed by Prime Minister’s Economic Advisory Council chairman Suresh Tendulkar set up by the Planning Commission almost two years back to look into acceptable measures of poverty and evolve a new definition for poverty, is yet to submit its report.

The current poverty line?Rs 356 monthly per capita expenditure for rural areas and Rs 458 for urban areas (2004-05)?is said to be much too low and states like Andhra Pradesh have argued that it is hiding poverty incidence. States like Punjab, Bihar and Gujarat have also had serious concerns about the process of poverty estimation.

Poverty is currently defined on the basis of the Lakdawala Committee?s recommendations in 1993, which linked poverty to calorie consumption levels in 1973-74. Those consuming less than 2400 calories in rural India , and 2100 calories in urban areas, are considered poor.

This varies from state to state due to price variations in the consumer basket. The calorie intake too has seen over 15-20% decline over the years in both rural and urban areas.

?The issue is if the present definition is valid today. Is the Consumer Price Index (CPI) appropriate to bump up poverty line year on year?” Sen had asked rhetorically.

In the last three Five Year Plans, different criteria have been used to identify the poor?income was used as the basis in 1992, consumption was used in 1997. The 10th Plan used a door-to-door census with a 13 point questionnaire that graded households on a scale. This method ran into trouble as the Supreme Court raised queries about the methodology and pointed to several flaws in it.

For instance, if the daughter of a household went to school, it was considered a sign of ‘not being poor’, presenting a ‘developmentally backward’ picture, according to India’s chief statistician and secretary ministry of statistics and programme implementation Pronab Sen.

Due to the faulty questionnaire, only some states like Gujarat and Kerala implemented variations of it. According to the present criteria, the ratio of poor in the country has almost halved from 54.8% of the population in 1973 to 27.5% in 2004.

Tendulkar had earlier expressed the view that India should have only one measurement of poverty based on 365 days consumption expenditure data.

At present, the government uses two measurement methods?one based on consumption expenditure data for 365 days and another based on data for 30 days?which leads to confusion about the country’s poverty level.

The National Statistical Survey Organisation (NSSO) had been collecting consumption expenditure data from households based on both 30 days (called Uniform Recall Period) as well as 365 days (called Mixed Recall Period) consumption pattern till the 50th round (1993-94) survey. Data are collected both for frequently consumed and infrequently purchased items like clothing, footwear, durables and institutional health expenditure.

However, for the 55th round (1999-2000), data were collected only for 365 days consumption pattern. In the latest 61st round (2004-05), the NSSO went back to the old system of using both methods. While the country’s poverty level based on 30 days data is 27.5 per cent, it is 21.8 per cent based on 365 days data.

The UPA government has recently launched a medical insurance scheme for the poor, Rashtriya Swathya Bima Yojana and had rechristened the existing social security scheme for senior citizens below the poverty line as the Indira Gandhi National Old Age Pension scheme. The National Rural Employment Guarantee Act is the UPA?s main flagship programme for alleviating rural poverty.

However, there is no co-ordination between different departments implementing these schemes in order to identify the beneficiaries effectively.