Govt study may raise poverty line

The government is updating the definition of poverty to take into account the changes in the lifestyle and consumption pattern of people over the last 30 years.

A redefinition of poverty may result in an increase in the number of people below the poverty line in the country.

In 1993-94, 36 per cent of the population was below the poverty line. In 2000-01, the figure was down to 27 per cent.

The Planning Commission is setting up a committee to study whether nutritional requirements of the people, especially in urban areas, have gone down over the years.

The committee will comprise BS Minhas, SP Gupta, S Tendulkar, K Sundaram, Abhijit Sen, Surjit Bhalla, P Radhakrishna, Mahindra Ved and C Gopalan.

The committee will also discuss whether the definition of poverty should add greater emphasis on expenditure; on items other than food which have gained significance in the consumption pattern.

The current definition of poverty in the country is in terms of calorific intake. Anyone who has a daily consumption of less than 2,400 in rural areas and less than 2,100 in urban areas is classified as poor.

The minimum income required to buy this intake, along with a basket of other necessary goods, is then taken as the benchmark. Individuals with income below this level are defined as poor.

The expenditure of the poor on food has decreased from around 80 per cent in the 1970s, when the existing definition of poverty was formulated, to less than around 60 per cent now.

The 57th National Sample Survey Organisation study on household consumer expenditure shows that food expenditure is down to 43 per cent of the total consumer expenditure in urban areas, while in rural areas it has decreased to 55.5 per cent.

This pattern could indicate either that with the advent of mechanisation, people need less nutrition, or that other expenditures have come up which take precedence over food expenditure, economists say.

For instance, in urban areas rent has become increasingly important, while in rural areas health expenditure has gone up sharply over the years.

The sample survey also finds that medical expenditure is 6.45 per cent of total consumer expenditure in rural areas and that rent accounts for 4.77 per cent of urban consumer expenditure in 2001-02.

The committee will, therefore, look at whether the expenditure on these items should be included in the consumption basket of the poor.

Modern view

• The Planning Commission is setting up a committee to study people's nutritional requirements
• The current definition of poverty in the country is in terms of calorific intake
• In 1993-94, 36% of the population was below the poverty line, in 2000-01, the figure was down to 27%
• The expenditure of the poor on food has decreased from around 80 per cent in the 1970s to around 60 per cent now