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Rangarajan To Head Panel For Reviewing Poverty Line

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After facing flak for fixing poverty line at Rs 28.65 per capita daily consumption in cities, the Planning Commission today constituted an expert group headed by noted economist C Rangarajan to review the Tendulkar Committee methodology for estimating poverty.

"Government has decided to set up an expert technical group chaired by Chairman of Prime Minister's Economy Advisory Council C Rangarajan to revisit the methodology for estimation of the poverty and identification of the poor," Minister of State for Planning Ashwani Kumar said here.

He said that the expert group is expected to give its report in 7-9 months.

Outlining the need for revisiting the methodology for estimating poverty, Kumar said, "People's perspective about poverty has changed.

Therefore, we need to take a fresh look into the methodology for estimation of poverty in the country."

"We don't send a letter through 20 paisa post card these days rather we call from our mobile phones to communicate.

Everybody wears Reebok shoe and people ride scooter instead of cycles," he said, explaining about the changing lifestyle of people and their perspective about poverty.

The Commission's estimates, based on Tendulkar Committee methodology, that people consuming more than Rs 28.65 per daily in cities and Rs 22.42 in rural areas are not poor, had triggered a controversy which even rocked Parliament.

The members of expert group which would suggest alternative methods of estimating poverty are Mahendra Dev, Director, Indira Gandhi Institute of Development Research, K Sundaram, Mahesh Vyas from Centre for Monitoring Indian Economy and former Advisor (Perspective Planning) Planning Commission K L Datta. 

Kumar said that the poverty, based on Tendulkar Committee methodology has come down from 37.2 per cent in 2004-05 to 29.8 per cent in 2009-10 and the number of poor persons in the country has reduced from 40.7 crore in 2004-05 to 35.5 crore in 2009-10.

The Commission has unveiled these estimates in March this year based on the Tendulkar Committee's methodology which factors in the spent on health and education, besides calorie intake.

The Tendulkar Committee, which submitted its Report in 2009, has incorporated adequacy of expenditure from the normative and nutritional viewpoint.

It said, "While moving away from the calorie norms, the proposed poverty lines have been validated by checking the adequacy of actual private expenditure per capita near the poverty lines on food, education and health by comparing them with normative expenditures consistent with nutritional, educational and health outcomes".

The minister said that the expert group will also recommend how the estimates of poverty should be linked to eligibility and entitlements for government's social sector schemes and programmes.