Rangarajan defends '3 of 10 poor' report; says poverty estimates meet global norms

Defending his calculation thatthree out of 10 in India are poor, former PMEAC Chairman CRangarajan has said poverty numbers provided by him are notconservative estimates and they are at par with globalstandards.

The expert group headed by Rangarajan dismissed the SureshTendulkar Committee methodology on estimating poverty andestimated that the number of poor in India was much higher in2011-12 at 29.5 percent of the population.As per the Rangarajan panel’s estimates, three out of 10in India would be poor. Estimates based on Tendulkar committeemethodology, 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 povertyestimates independently,” Rangarajan told CNBC-TV18.He was responding to the criticism that anyone spendingmore than Rs 47 per day in cities and Rs 32 in villages wouldnot be poor.

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Elaborating further he said, “The World Bank also talksabout purchasing power parity terms. The minimum expenditureper day. They are talking about about $2 per day whereasour estimates comes to $2.4. Therefore it (our povertyestimates) is in keeping with the international standards”.He explained that the benefits are not being provided onthe basis of any poverty line as in the case of food securitylaw which would benefit 67 percent of the population.

The noted economist believes that it is measure of povertyand measure of understanding how economy is moving. But apartfrom 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 isestimated at Rs 4,860 in villages and Rs 7,035 for cities fora family of five people.Apart from the private consumption expenditure, peoplealso benefit from public expenditure on health, education andother facilities, he said, adding: “poverty line is atappropriate level”.

“All of these spendings have gone up in the recent past.That explains why urban poverty ratio is much higher in ourestimation,” he said.

As per the report submitted by Rangarajan to PlanningMinister Rao Inderjit Singh earlier, persons spending below Rs47 a day in cities would be considered poor, much above the Rs33-per-day mark suggested by the Suresh Tendulkar Committee.As per Rangarajan panel estimates, a person spendingless than Rs 1,407 a month (Rs 47/day) would be consideredpoor in cities, as against the Tendulkar Committee’ssuggestion of Rs 1,000 a month (Rs 33/day).

In villages, those spending less than Rs 972 a month (Rs32/day) would be considered poor. This is much higher than Rs816 a month (Rs 27/day) recommended by Tendulkar Committee.In absolute terms, the number of poor in India stood at36.3 crore in 2011-12, down from 45.4 crore in 2009-10, as perthe Rangarajan panel. Tendulkar Committee, however, hadsuggested that the number of poor was 35.4 crore in 2009-10and 26.9 crore in 2011-12.

PTI