Poverty figure uproar: Montek admits flaws in assessing method

In the wake of a major uproar over poverty estimates, Planning Commission Deputy Chairman Montek Singh Ahluwalia today admitted that the method of tabulating the number of poor is "abstract" and said it is being reworked.
Ahluwalia sought to distance himself from the controversial data released last week according to which poverty figures declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05, saying the figures were based on the assessment of an expert committee.
The current figures are based on the methodology suggested by a committee headed by renowned economist Suresh Tendulkar which factors in spent on health and education besides calorie intake, he said.

"The Tendulkar (committee methodology) numbers show about 22 per cent as poor (in the country). I am perfectly willing to agree that, that (poverty) line is a bit low," he told reporters.
About the questions raised over these figures, even within the Congress party, Ahluwalia said, "Kapil (Sibal) has said that the present system is abstract and even we should improve it. Even we agree to that."
The Planning Commission deputy chief said the new methodology being worked upon will be based on the Rangarajan Committee which is expected to submit its report by the middle of next year.

His statement assumes significance as these poverty figures have led to a major uproar and slammed by all political parties, including UPA constituent NCP.

The Commission used the Suresh Tendulkar Committee's methodology, which factors in spending on health and education besides calorie intake to arrive at a poverty line for cities and villages. Accordingly, the people whose daily consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 in villages are not poor.
Ahluwalia said, "This is not the Planning Commission's (poverty) line. Poverty line is not drawn by the Planning Commission. It is actually drawn by an expert group. The line you are talking about is a line recommended by the Suresh Tendulkar expert committee.