Poverty line panel chief for 365-day method

Leading economist and chairman of the National Statistical Commission, Suresh Tendulkar, has said that India should use only one measurement of poverty "" 365 days consumption expenditure data.

At present, one measure is based on consumption expenditure data for 365 days while another is based on data for 30 days. This leads to confusion about the country's poverty level.

Tendulkar's views are significant as he heads a committee set up by the Planning Commission to come out with a new poverty line that is comparable over time and across states. Policy-makers and bureaucrats use poverty data to ensure more efficient public expenditure.

The National Statistical Survey Organisation (NSSO) had been collecting consumption expenditure data from households based on both 30 days (called Uniform Recall Period) as well as 365 days (called Mixed Recall Period) consumption pattern till the 50th round (1993-94) survey.

Data are collected both for frequently consumed and infrequently purchased items like clothing, footwear, durables and institutional health expenditure.

However, for the 55th round (1999-2000), data were collected only for 365 days consumption pattern. In the latest 61st round (2004-05), the NSSO went back to the old system of using both methods. While the country's poverty level based on 30 days data is 27.5 per cent, it is 21.8 per cent based on 365 days data.

"States at the lower end of per capita expenditure have nothing to report for the infrequent items in case of the 30 days Uniform Recall Period. However, using 365 days, you get a higher per capita expenditure at the lower end," Tendulkar said.

The distribution becomes relatively more equal. That is why I think that 365 days recall period data are a better measurement of poverty than the 30 days data. But this is being discussed at the committee," Tendulkar said.

When asked to comment on an alternative to the present nutrition or expenditure-based poverty line measurement, Tendulkar said any other method, such as an income-based poverty measurement, would also have some arbitrariness.

"I will still go for the expenditure method because it is known to be more stable over time and essentially incorporates a living standard, which the income method does not. Income fluctuation is much wider than consumption fluctuation. My personal preference will still be living standard in terms of per capita consumption", he added.

Although Tendulkar did not give a timeline for submitting the report, Planning Commission sources said it would to submitted next month.