Question

Tendulkar committee report on poverty upsc

Answer 1

The report of the NitiAayog’s Task Force on Eliminating Poverty panel has backed the controversial `Tendulkar poverty line’, which categorised people earning less than Rs. 33 a day as poor, on the ground that the line is primarily meant to be an indicator for tracking progress in combating extreme poverty.

Argument of task force:

Report argues that the poverty line is not the basis of identification of the poor in India. Instead, it is the BPL Census on the basis of which state governments identify the poor. The latest of these is the Socio-Economic Caste Census 2011.

Since what represents a basic necessity would vary from person-to-person, the final decision will have to give adequate attention to the fact that the objective behind a poverty line is to track progress in combating extreme poverty and not identification of the poor for the purposes of distributing government benefits.

Important recommendation made by the Task force:

Task force recommended sweeping changes to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for allowing use of the programme’s funds to pay for labour on private farms.

Another of its suggestion for eliminating poverty within 5-7 years is modest cash transfers to the poorest five families in every village to be identified by Gram Panchayats: “During peak season, farmers may be permitted to hire MGNREGA workers by paying 75% of the wages with the balance paid by MGNREGA funds”

Report also observes Aadhaar accounts will give government an “excellent” database to assess the total volume of benefits accruing to each household, “which can pave the way for replacing myriad schemes with consolidated cash transfers, except where there are compelling reasons to continue with in-kind transfers.”

Report has underlined the need for a poverty line that will help the government track the progress in combating extreme poverty rather than identifying the poor.

Task force has proposed four options to arrive at a poverty line in the country while calling for further deliberations with all stakeholders on the issue

Tendulkar committee

The current official measures of poverty in India are based on the Tendulkar Poverty Line which has pegged the number of poor in the country at 269.8 million or 21.9% of the population based on the National Sample Survey Organisation data for 2011-12

Tendulkar committee computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to one U.S. dollar per person per day, which was the internationally accepted poverty line at that time.

The Tendulkar committee had pegged the daily per capita expenditure at Rs 27 for rural and Rs 40 for urban poor, which turned out to be the average monthly per capita expenditure Rs 816 in rural India and Rs 1,000 in urban areas. This had come in for severe criticism for being too low, forcing the then Congress-led UPA government to set up a committee under former Reserve Bank of India governor C Rangarajan to review the threshold 

PPP refers to a method used to work out the money that would be needed to purchase the same goods and services in two places. Across countries, this is used to calculate an implicit foreign exchange rate, the PPP rate, at which a given amount of money has the same purchasing power in different countries. The 2004-05 Tendulkar poverty line was Rs.16, which in PPP terms, is equivalent to one U.S. dollar per person per day.

The Rangarajan committee, set up during the UPA-II government, pegged the total number of poor in the country at 363 million or 29.6% of the country's population raising the daily per capita expenditure to Rs 32 for rural and Rs 47 for urban poor from the level set by the Tendulkar committee. The task force has suggested four options for tracking the poor.