A govt panel on poverty doesn’t know what it is

NEW DELHI: Just how many people in India are poor? The question remains unanswered with yet another government panel failing to define an official “poverty line”.

NEW DELHI: Just how many people in India are poor? The question remains unanswered with yet another government panel failing to define an official “poverty line”.

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After a year-and-half of work, a 16-member task force headed by Niti Aayog vice-chairman Arvind Panagariya has failed to reach a consensus and suggested to the government that another panel of specialists be asked to do the job.

HT has a copy of the panel’s final report.

Governments set a poverty line to fix a threshold income to get a headcount of poor people in a country. People earning below the threshold, or the poverty line, are considered poor.

But defining poverty has been a controversial exercise in India with successive governments mothballing past recommendations by experts — largely because a lower poverty threshold risks leaving out genuinely needy people and a higher one makes the poverty number look bad for a government and require more subsidy spending.

Experts questioned the Panagariya panel’s indecisiveness.

“The expert group should have taken a view. It can’t just say that there is a lack of consensus. It’s ridiculous,” Abhijit Sen, eminent economist and former Planning Commission member, told HT.

“The problem is no one wants to bell the cat when it comes to giving the figures on total number of people who are poor in the country.” Sen blamed politics behind entitlements for the poor for the Panagariya panel’s indecisiveness.

Panagariya did not respond to calls and mobile text messages from HT.

In 2009, a new methodology suggested by a panel led by Suresh Tendulkar to measure poverty levels estimated the number of poor in India at 21.9% of the population (See box).

The controversy over the low threshold income level forced the then UPA government to set up another expert panel headed by former RBI governor C Rangarajan.

That committee pegged the threshold at levels which showed 29.5% of the population was poor. But the poverty debate was not settled.

Different countries have their own poverty line definitions. The World Bank reckons more than 270 million Indians live on less than $2 a day.

In most of Europe, a family with a net income of less than 60% of the “median net disposable income” – a broad measure of the national average income net of taxes income--is counted as poor.

The United States uses a simpler method. The poverty line represents the basic cost of food for a family multiplied by three. A family is counted as poor if its pretax income is below this threshold.

A part of the reason for the Panagariya panel’s indecisiveness is the lack of consensus among the states too.

Some states such as Odisha and West Bengal batted for the Tendulkar poverty line, while others including Delhi, J hark hand, and Mizoram preferred the Rangarajan line. The Panagariya panel had asked states to set up their own task forces on this issue and submit their suggestions.

In its draft report, the Panagariya panel had reportedly favoured the Tendulkar poverty line. It refrained from suggesting its own threshold in the final report submitted to Prime Minister Narendra Modi last month.

“In view of this lack of consensus ( among states), the Task Force recommends that an expert group consisting of the country’s leading specialists on poverty consider the issue in-depth and recommend the poverty line India must adopt for tracking of poverty,” the panel said.

The only point the states agreed on with the task force was that the poverty line – that is calculated based on household expenditure data -- should be used to track poverty and not to identify who is poor or provide entitlements meant for them.