While the Opposition pillories the Planning Commission for using a formal definition of poverty that ensures the percentage of people below the poverty line is lower than what it ought to be, the government has begun moving to a broader and more realistic de facto definition that will include roughly 65 per cent of the population. This notional poverty line will stand at a per capita expenditure of around Rs 50 per day in rural areas and Rs 62 in urban areas.
As first reported by The Hindu , the Planning Commission has revised the official poverty headcount ratio down from 37 per cent of the total population in 2004-5 to 22 per cent of the population in 2011-12. These poverty rates come from applying the Suresh Tendulkar committee’s methodology for estimating poverty to draw a poverty line, and using the National Sample Survey Organisation’s consumption expenditure data for 2011-12 to see what proportion of the population falls below these lines.
While Planning Commission-derived poverty lines and estimates have been all-important in the past because they are used to draw up BPL lists and allot entitlements, their inappropriateness today is demonstrated by the fact that the government itself is now moving away from using these numbers altogether. Following the Union cabinet’s clearing of the National Food Security Ordinance, the Planning…
