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A Poverty Of Ideas

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Suresh Tendulkar died in June last year. But even when he was alive, he was rarely attacked by politicians for his work on calculating poverty. Strangely, the person who ends up getting all the flak for the late economist's methodology for calculating the poverty line is Montek Singh Ahluwalia, deputy chairman of the Planning Commission.
In fact, whenever the Planning Commission issues a report about the population below poverty line based on the Tendulkar Committee's methodology, Ahluwalia becomes the subject of attack. Last week, the Planning Commission estimated that India's below-poverty-line population had fallen from 37.2 per cent in 2004-05 to 29.8 per cent in 2009-10.

The opposition immediately termed the decline as "ridiculous" and questioned the very definition of the poverty line saying no one could live on Rs 28.65 in urban areas and Rs 22.42 in rural areas.

Samajwadi Party supremo Mulayam Singh Yadav said that "people sitting in air conditioned offices were trotting out figures", while 65 per cent of India's population was actually poor. Sushma Swaraj argued that "judging by the government's efforts, it wants to end the poor, not poverty".

Janata Dal's Sharad Yadav went a step further, associating a jinx with the deputy chairman of the Planning Commission. "Every time he opens his mouth, things go wrong."

Now the government has decided to set up a new technical committee that will recalculate the poverty line. "We have been aware that the Tendulkar Committee poverty line was proving controversial in some circles on the grounds that it excluded too many otherwise deserving people from food subsidy benefits. We had earlier indicated that it was not the intention to limit food subsidy benefits to those below the Tendulkar poverty line and the food subsidy Bill envisaged a much larger priority group," said Ahluwalia. "The new committee will now be an occasion to revisit the Tendulkar poverty line and possibly set a new line for monitoring trends in poverty over time."

Meanwhile, some economists point out that regardless of where the poverty line is finally set, the trend will show a decline. NSSO data points to that. Planning Commission's principal advisor Pronab Sen, who has been handling the poverty estimates since 1995, said that this was never an issue until last year when suddenly it seemed to become one. "You can argue with the numbers but the trend shows a decline and that cannot be argued with," he added.

(This story was published in Businessworld Issue Dated 02-04-2012)