The expert group headed by Rangarajan dismissed the Suresh Tendulkar Committee methodology on estimating poverty and estimated that the number of poor in India was much higher in 2011-12 at 29.5 per cent of the population.
As per the Rangarajan panel’s estimates, three out of 10 in India would be poor.
Estimates based on Tendulkar committee methodology, had pegged the poverty ratio at 21.9 in 2011-12.
“I dont think that it is conservative (poverty) estimates. In my view it is reasonable estimates. We have derived poverty estimates independently,” Rangarajan told a news channel.
He was responding to the criticism that anyone spending more than Rs 47 per day in cities and Rs 32 in villages would not be poor.
Elaborating further he said, “The World Bank also talks about purchasing power parity terms. The minimum expenditure per day. They are talking about USD 2 per day whereas our estimate comes to USD 2.4. Therefore it (our poverty estimates) is in keeping with the international standards”.
He explained that the benefits are not being provided on the basis of any poverty line as in the case of food security law which would benefit 67 per cent of the population.
The noted economist believes that it is measure of poverty and measure of understanding how economy is moving. But apart from it there is no immediate policy implication.
He urged the people to look at the poverty line in terms of a household’s consumption expenditure per month which is estimated at Rs 4,860 in villages and Rs 7,035 for cities for a family of five people.
Apart from the private consumption expenditure, people also benefit from public expenditure on health, education and other facilities, he said, adding: “poverty line is at appropriate level”.
“All of these spendings have gone up in the recent past. That explains why urban poverty ratio is much higher in our estimation,” he said.
As per the report submitted by Rangarajan to Planning Minister Rao Inderjit Singh earlier, persons spending below Rs 47 a day in cities would be considered poor, much above the Rs 33-per-day mark suggested by the Suresh Tendulkar Committee.
As per Rangarajan panel estimates, a person spending less than Rs 1,407 a month (Rs 47/day) would be considered poor in cities, as against the Tendulkar Committee’s suggestion of Rs 1,000 a month (Rs 33/day).
In villages, those spending less than Rs 972 a month (Rs 32/day) would be considered poor.
This is much higher than Rs 816 a month (Rs 27/day) recommended by Tendulkar Committee.
In absolute terms, the number of poor in India stood at 36.3 crore in 2011-12, down from 45.4 crore in 2009-10, as per the Rangarajan panel.
Tendulkar Committee, however, had suggested that the number of poor was 35.4 crore in 2009-10 and 26.9 crore in 2011-12.
Rangarajan panel report on poverty attacked by parties The Rangarajan Committee, which has suggested a new benchmark for describing poverty, on Monday came under sharp attack from political parties, which said it amounted to “mocking at the poor” and makes neither “common sense” nor “economic sense”.
The ruling BJP said it will deal with the matter at an appropriate forum of the government.
“We think that the BPL criteria figures are misleading and we will take up the issue with an appropriate forum of the government,” senior BJP leader and Union Minister Uma Bharti said.
“As far the new definition of poverty given by the Rangarajan Committee is concerned it is appalling,” said CPI(M) leader Sitaram Yehcury on the recommendations that a person spending above Rs 47 a day in cities and Rs 32 in rural areas should not be considered poor.
“This is a ridiculous figure. It makes neither common sense neither economic sense,” he added.
The Samajwadi Party rubbished the report and took a jibe at Rangarajan, chairman of PM’s Economic Advisory Committee appointed during Manmohan Singh’s tenure.
“We will give Rs 100 to Rangarajan everyday and ask him to spend a day in a village and let him have a full meal. Then we will believe that findings of the report are correct.”
“Those staying and travelling in ACs cars will not understand what poverty is. We condemn the report,” SP leader Naresh Agarwal said.
BSP supremo Mayawati too attacked the report saying it amounted to “mocking at the poor”.
“This is nothing but making a joke of poor people. Whatever figures that have been given and the way it has been calculated, our party does not support it,” she said.
The Congress, whose government had asked the committee to undertake the task of identifying the poverty criteria, said the issue needs to be debated upon.
“We have to look at the reality. Rangarajan is an excellent economist. The report has to be debated upon and a decision has to be taken by the concerned authority,” senior Congress leader and former Union Minister Veerappa Moily said.
As per the panel estimates, poverty stood at 38.2 per cent in 2009-10 and slided to 29.5 per cent in 2011-12.