 "NITI Aayog cautious on poverty lines")
The NITI Aayog, the government's successor body to the erstwhile Planning Commission, is treading with caution on estimation of poverty cut-off lines.
The issue had triggered a big controversy in the previous United Progressive Alliance administration.
An Aayog task force, headed by Vice-Chairman Arvind Panagariya, will issue a poverty line based on the Suresh Tendulkar committee recommendations or those of the C Rangarajan panel or an entirely new methodology in the next six months, sources said, after extensive discussions with states and other stakeholders.
As of now, there is no unanimity within the task force on the methodology, they added.
"The task force on poverty elimination has prepared a discussion paper and will invite comments from stakeholders and states next week before firming up its recommendations," a source said.
Meanwhile, it has suggested a number of steps. These include making anti-poverty programmes such as the Public Distribution System (PDS), Mid-day Meal Scheme, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Housing for All more effective, the sources said. It feels poverty could only be reduced if job-intensive economic growth accelerates on a sustained basis.
The panel has decided there are four ways that could be considered for tracking the poor. One could continue with the Tendulkar poverty line, switch to the Rangarajan or other higher rural and urban poverty lines, track progress of the bottom 30 per cent of the population over time, or track progress along specific components of poverty, such as nutrition, housing, drinking water, sanitation, electricity and connectivity.
While the last two could complement the measurement of poverty, using a poverty line, these cannot substitute for it, the task force decided.
Earlier
Earlier, the Planning Commission had come out with poverty lines at Rs 33 in urban areas and Rs 27 in villages for 2011-12, on the basis of the Tendulkar recommendations. This had stirred a controversy, as it was taken to mean anyone spending more than these levels would no longer be poor.
For 2009-10, the poverty line was taken as Rs 28.65 in urban areas and Rs 22.42 in villages. Using these, the poverty rate declined by 7.8 percentage points in two years, to 22 per cent of the population in 2011-12 from 29.8 per cent in 2009-10.
Following an uproar, the government had appointed a panel under C Rangarajan (then the head of the Prime Minister's Economic Advisory Council to revisit the measurements. This panel recommended raising the poverty lines for 2011-12 to Rs 47 a day in urban areas and Rs 32 in villages, and for 2009-10 to Rs 40 and 27, respectively, compared to the Tendulkar methodology.
As such, poverty fell to 29.5 per cent in 2011-12 from 38.2 per cent in 2009-10 but the rate was much higher than in the Tendulkar method. This, too, evoked sharp criticism.
Now
The task force deliberated on pros and cons of both. It noted the main criticism of the Tendulkar method was that the poverty line was too low. The counter-argument is that if the aim is to assess whether we are making progress in bringing households out of extreme poverty, it makes sense to set the line at a level that allows two square meals a day and other basic necessities.
Put differently, if the poverty line is set too high, we would be tracking how many people who'd already achieved a certain level of 'comfort' have been made more so. It will tell us little about what is happening to households in abject poverty, sources said.
The task force says the poor predominantly reside in rural areas, where incomes critically depend on agricultural growth. As such, it lays focus on raising productivity in agriculture, giving remunerative prices to farmers, the need for a second 'green revolution' in rain-fed areas in general and eastern India in particular, helping small and marginal farmers by reforming tenancy laws, and bringing relief to farmers in natural disasters.
However, it conceded that, historically, agriculture has not grown in India at rates exceeding five per cent a year on a sustained basis, unlike in industry and services. As such, the benefits of growth can be shared more equally only by creating gainful employment in the latter two sectors.
And, it has said, anti-poverty programmes need to be made more effective. For instance, poor households lag the most in consumption of protein-rich items such as milk and eggs. So, it could make sense to offer them an option between cash and in-kind transfers under the PDS. This might be complemented with an information drive on the importance of a protein-rich diet.
Similarly, MGNREGS can be made more effective by allowing it to impart skills. During the peak season, farmers may be permitted to hire MGNREGS workers by paying only 75 per cent of the set wages, with the balance paid from the scheme funds. This would lead to more productive use of labour, while also spreading MGNREGS wages over more workdays, sources said.
