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Planning Commission's criteria for fixing poverty line has been questioned by ruling and opposition parties. In an interview with Sanjay Jog, Planning Commission's former member and present Rajya Sabha member Bhalchandra Mungekar explains the nitty gritties of the method followed to arrive at these estimates. Edited excerpts:
Do you agree with the poverty estimates issued by the Planning Commission?
This is the routine exercise carried out by the Planning Commission based on the National Sample Survey Organization (NSSO) data. These have been prepared on the basis of Tendulkar committee's recommendations. The committee had added expenditure on health and education in addition to per capita calorie expenditure. For estimating poverty for 2011--12 on the basis of NSSO data, the Planning Commission took Rs 4,080 per month expenditure for a family of five in rural areas and Rs 5,000 per month in urban area.
This gives Rs 27.2 per capita per day expenditure in rural areas and Rs 33.33 in urban areas. In view of the present inflation rate showing overall increase in commodity prices, these cut off points are now questioned in various quarters.
Taking into the account the present rate of inflation this minimum expenditure to define poverty appear to be unrealistic and therefore questionable. But what the Planning Commission has done is, it wanted to see the rate of reduction in poverty between 2004-5 and 2011-12. On this basis, the Planning Commission found that 137 million people crossed the poverty line during the seven year period.
I must mention here that the Planning Commission in its note itself has mentioned that a new committed headed by the Prime Minister's Economic Advisory Council chairman C Rangarajan will re-look into the issue. The committee may expand the scope of expenditure and revise the poverty line upwards and probably may give higher estimates of poverty. However, I must say here that the rate of reduction in poverty during these seven years is an undisputed fact.
What according to you have led to fall in poverty?
During 2004-05 and 11-12, the rate of growth was on an average 8.5% per annum. It must have benefitted the people at large. Second, the inclusive policies of the Congress led UPA government particularly Mahatma Gandhi National Rural Employment Guarantee Act has provided around 400 to 450 person years jobs per annum at the wage rate ranging from Rs 130 to Rs 160 per day. This has provided additional income to the poor. Third, due to relative scarcity of labour in rural areas due to Mahatma Gandhi National Rural Employment Guarantee Act, overall rural wage rates have increased that is the reason that the rural poverty has reduced faster than the urban poverty. For instance, between 2004-05 and 2011-12, rural poverty per annum declined at the 2.30% and urban at 1.69% per annum. These rates of reduction are three times higher than rates at which poverty declined during 1993-94 and 2004-05.
Do you agree with statements by some Congress members that one could have meals at Rs 5 and Rs 12?
I totally disagree with them. As I mentioned here at the present rate of inflation Rs 27 for rural and Rs 33 for urban areas for defining poverty appear to be unrealistic. Under these conditions the statements made by some of the members of Congress party were uncalled for. However, later on they have tendered apology. It is quite possible that Rangarajan committee may expand the scope of expenditure and revise the poverty line upwards and probably may give higher estimates of poverty. But nevertheless whatever methods and the level of per capita expenditure Rangarajan coommittee may follow during last seven years poverty has declined at a faster rate compared to the earlier period 1993-94 and 2004-05. This will remain unquestioned.
If the poverty is reduced at such a fast rate, why food security is extended to 67% of the population?
There should not be any confusion between estimates of poverty and the food security. Food security will be guaranteed legally to 67% of the population to begin with. It has nothing to do with poverty. For the first time any where in the world the government has accepted as its moral responsibility to guarantee to citizens legal entitlement of 5 kg of grains per person per month. The left parties were demanding universalization of food security and I wish the government would have done that. But the present economic situation would not allow that. Therefore, the food security in terms of legal entitlement is on par with any other legal or constitutional right such as right to vote. It is justiceable in the court of law and if the legal entitlement is not fulfilled the concerned people may approach the court for seeking grievance redressal.
