Faced with criticism from opposition parties and civil society on its poverty estimates, the Planning Commission on Tuesday defended its calculations, albeit pointing to “serious” discrepancy in data on consumption expenditure.
It, however, said high economic growth rates were not trickling to the bottom 15 per cent of the population fast enough and inequalities had increased, though “marginally”.
Refuting allegations the Commission has lowered the poverty line to exaggerate the figures of persons over the line, Planning Commission Deputy Chairman Montek Singh Ahluwalia said those analysing the figures have missed the point that poverty line was given for 2009-10 in the latest estimates, while affidavit submitted to the Supreme Court for poverty line was for June 2011. Besides, the affidavit extrapolated 2004-05 consumption expenditure survey to arrive at June 2011 figure on the basis of inflation numbers as 2009-10 survey was not available then.
The Commission’s estimates showed that poverty line was Rs 19.3 a day per person for urban areas and Rs 14.9 a day for rural parts in 2004-05. This was revised to Rs 32.1 for urban areas and Rs 26 for rural areas as on June 2011 in an affidavit to the Supreme Court. However, the latest poverty estimates are based on poverty line of Rs 28.6 a day in urban areas and Rs 22.4 in rural areas for 2009-10.
If the 2009-10 survey is taken into account, poverty line will not be changed drastically. It would be Rs 32.28 per cent urban areas and Rs 25.33 for rural areas as in June 2011.
The Commission had given monthly figures per family and defended them saying, per day figures are not the right way of calculating poverty line.
A release by the Commission later said poverty line is based on Tendulkar committee’s report and would be changed, depending on experts’ views. It said as a matter of fact any poverty line is essentially “arbitrary”.
Ahluwalia asserted the huge discrepancy between the consumption expenditure survey conducted by the National Sample Survey Organisation (NSSO) and the national accounts conducted by the Central Statistics Office would not dramatically change the findings of the Commission, which showed that poverty declined at double the rate per annum between 2004-05 and 2009-10, compared with the previous 10 years.
He said NSSO consumption figures were 50 per cent lower than those given by the national accounts and this discrepancy would be taken up with Chief Statistician T C A Anant. “Our findings will remain more or less the same, whichever method you choose,” Ahluwalia said.
He said inequality had increased marginally and urban areas witnessed more disparity than rural parts over the period, roughly coinciding with the first Manmohan Singh government (2004-09) and the initial period of its second stint. The Gini coefficient rose from 0.35 in 2004-05 to 0.37 in urban areas in 2009-10, while it stood at 0.27 and 0.28 in rural areas in those two years, respectively, said Commission member Saumitra Chaudhuri. Ahluwalia said the number was not as high as some other countries; Brazil’s was 0.5. The coefficent measures inequality, with a measure of one showing perfect inequality and 0 of perfect equality. The higher the figure, the higher the inequality.
Chaudhuri said inequality had risen, particularly between the top 15 per cent and the bottom 15 per cent. As India does not have data on income distribution, consumption expenditure is roughly taken as a proxy for income inequalities.
To a query, Chaudhuri said, “You can say high GDP growth is not trickling to the bottom 15 per cent of population to the extent desired. They are the people who are in a real problem.”
