Poverty line redrawn, 3 in 10 Indians are poor: report

The panel, headed by former RBI governor C Rangarajan, estimates there were 363 million people, or 29.5% of India's 1.2 billion population, who lived in poverty in 2011-12.Poll: Have economic reforms really worked?

Updated on: Jul 8, 2014, 02:09:47 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Nearly one in three Indians was poor in 2011-12, according to a new report that was commissioned following widespread criticism two years ago that the government grossly underestimated the number of poor in the country by choosing an unrealistic poverty line for such estimates.

The panel, headed by former RBI governor C Rangarajan who also was the chairman of the prime minister's economic advisory council in the UPA government, estimates there were 363 million people, or 29.5% of India's 1.2 billion population, who lived in poverty in 2011-12. The number is significantly higher that the official estimate of 269 million and the difference – of about 94 million – is attributed primarily to a change in the definition of the poverty line.

Read:Mayawati slams NDA govt over Rangarajan report

The Rangarajan panel considers people living on less than Rs 32 a day in rural areas and Rs 47 a day in urban areas as poor. In contrast, the official estimate- based on recommendations made by late economist Suresh Tendulkar -- defines people living on less than Rs 27 a day rural areas and Rs 33 a day in urban areas as poor. These figures, ever since they were adopted by the UPA government during its first term, have been criticised for being unrealistic and artificially seeking to lower the poverty numbers. The official estimates in use put the poverty ratio in 2011-12 at 21.9%, almost 8 percentage points lower than Rangarajan's estimates.

The new estimates were submitted to the NDA government last week. It is not clear whether these would be adopted as new official estimates on poverty.

The sharp revision in the poverty line is partly a result of a change in methodology. For sustenance, the new methodology includes all such expenses on account of basic amenities that are often covered by public expenditure. The new numbers mean that 363 million Indians would have struggled to survive if there was no public spending," said a member of Rangarajan panel, who did not want to be named.

Although the new estimates push up the poverty numbers compared to the earlier methodology, what may come as a relief for the UPA is that the number of poor steadily declined during its rule, no matter which methodology is chosen. According to Rangarajan, the number of poor declined from 454.6 million in 2009-10 to 363 million in 2011-12 and the poverty ratio from 38.2% to 29.5% in the same period.

India's poverty estimates are based on consumption expenditure surveys done by the National Sample Survey Office.

Read:Girls are essential agents of change in breaking poverty and deprivation cycle

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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