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Montek defends Rs 32/day limit

business Updated: Sep 27, 2011 00:06 IST

Defending Plan panel's criteria under which those who consume items worth more than Rs 32 in urban areas in a day are not poor, its deputy chairman Montek Singh Ahluwalia on Monday said the limit will not be the basis for extending benefits to the poor.

"We have not made any new policy decision. The Supreme Court asked us how we calculate the poverty line, we gave the factual explanation. I believe the explanation we have given is factually correct," Ahluwalia, who is here to attend the first India-China Strategic Economic Dialogue, told the Indian media.

"That it how the poverty lines are set up and that is how poverty lines are updated," he said commenting for the first time after the controversy broke following an affidavit filed by the Planning Commission in the Supreme Court.

In its affidavit, the Planning Commission has stated that a person with consumption of up to Rs 32 per day would be considered poor in urban areas. The per capita consumption limit in rural area has been fixed at Rs 26 a day.

Asserting that the data forwarded to the apex court was set by the Tendulkar Committee which was appointed to define the poverty line, he said the amount fixed were per each person not per family.

"This is the number the Tendulkar Committee recommended which is an expert group. We accepted that which mean that the poverty numbers went up", he said.

"Many in the media misread the affidavit. I have heard the people say how a family of five can live on Rs 32. This number is a per capita number, between the rural and urban. For a family of five it has to be multiplied by five," Ahluwalia said.

About the poverty criteria fixed using the Tendulkar Committee methodology, Ahluwalia said, "I am not sure, what we can do about this as it is a recommendation. may be we can appoint another committee that is all", Ahluwalia said.

He also countered the perception that the poverty line of 32 per cent as per the Tendulkar panel will be applied for the purpose of the proposed food security bill and other such schemes for the Below Poverty Line (BPL) families.

The latest data of the Planning Commission indicates that poverty in India has declined to 32 per cent in 2009-10 from 37.2 percent of the population five years ago.

The preliminary estimates are based on the formula suggested by the Tendulkar Committee for computing the number of poor in the country.

"Question is what is it that you are upset about. If you are upset about 32 per cent means that Planning Commission wants to restrict it to 32%, it is factually incorrect. In all the internal discussion, I have been supportive saying we can manage 41 per cent," he said.

"There is no unique logic to what should be poverty line. The Planning Commission believes that poverty is multi-dimensional concept. It is not going to be just looking at consumption but the availability of important elements like clean drinking water, health and education," he said.

"The Planning Commission’s motives are being wrongly understood. It is not our objective to deny anybody benefits. That is a separate issue to be decided by government. It is for government to decide," he said.

He said he is travelling to Paris from here to attend G-20 meeting. He will explain his stand more clearly to after his return to New Delhi on October 3.