New Expert Panel on Poverty Estimates

The government has set up an expert technical group headed by Prime Minister’s Economic Advisory Council (PMEAC) Chairman C. Rangarajan to review the Tendulkar Committee methodology for estimating poverty and overhaul the norms in keeping with the present-day prices.

The move follows all-round criticism of the Planning Commission’s estimates on poverty released recently. The State-wise poverty lines and poverty ratio for 2009-10 computed by Tendulkar methodology showed that the poverty ratio in the country has come down from 37.2% in 2004-05 to 29.8% in 2009-10. As a result, the number of poor persons in the country has reduced from 40.7 crore in 2004-05 to 35.5 crore in 2009-10.

The Terms of Reference of the Expert Technical Group have been finalized as under:

1. The panel has been asked to comprehensively review the existing methodology of poverty estimation and examine whether the poverty line should be fixed solely in terms of a consumption basket or whether other criteria are also relevant. If so, it should suggest if they can be effectively combined to evolve a basis for estimation of poverty in rural and urban areas and also recommend how its estimates of poverty should be linked to eligibility and entitlements for the Central government’s schemes and programmes.

2. To examine the issue of divergence between consumption estimates based on the NSSO methodology and those emerging from the National Accounts aggregates; and to suggest a methodology for updating consumption poverty lines using the new consumer price indices launched by the CSO for rural and urban areas state-wise.

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3. To review alternative methods of estimation of poverty which may be in use in other countries, including their procedural aspects; and indicate whether on this basis, a particular method can be evolved for empirical estimation of poverty in India, including procedures for updating it over time and across states.

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