HPAS/Allied Mains 2022 Answer Writing Challenge Day 178: Model Answer

QUESTION: Discuss the Poverty Measurement efforts undertaken in India. (8 marks/120 words)

Answer:

Poverty can be defined as a condition in which an individual or household lacks the financial resources to afford a basic minimum standard of living. However, the perception regarding what constitutes poverty may vary over time and across countries. The first step in estimating poverty is to define and quantify a poverty line.

Pre-Independence Poverty Estimation

1.  Poverty and Unbritish Rule in India (1901): Dadabhai Naoroji’ in his book ‘Poverty and Un-British Rule in India,’ made the earliest estimate of poverty line at 1867-68 prices (₹16 to ₹35 per capita per year) based on the cost of a subsistence diet for the emigrant coolies during their voyage living in a state of quietude.
2.  National Planning Committee’s (1938): In 1938, the National Planning Committee set up under the chairmanship of Jawaharlal Nehru suggested a poverty line (ranging from ₹15 to ₹20 per capita per month) based on a minimum standard of living.
3.  The Bombay Plan (1944): Bombay Plan proponents suggested a poverty line of ₹75 per capita per year, which was much more modest than that of the NPC.

Post- Independence Poverty Estimation

1. Working Group (1962): The poverty line in India was quantified for the first time in 1962 by this Group in terms of a minimum requirement (food and non-food) of individuals for healthy living. The Group formulated the separate poverty lines for rural and urban areas (₹20 and ₹25 per capita per month respectively in terms of 1960-61 prices) without any regional variation.
2. Study by VM Dandekar and N Rath (1971): established the consumption levels required to meet a minimum calorie norm of an average calorie norm of 2,250 calories per capita per day.
3. Task Force on “Projections of Minimum Needs and Effective Consumption Demand” headed by Dr. Y. K. Alagh (1979): Poverty line was defined as the per capita consumption expenditure level to meet average per capita daily calorie requirement of 2400 kcal per capita per day in rural areas and 2100 kcal per capita per day in urban areas.
4. Lakdawala Expert Group (1993): It did not redefine the poverty line and retained the separate rural and urban poverty lines recommended by the Alagh Committee at the national level based on minimum nutritional requirements. However, it disaggregated them into state-specific poverty lines in order to reflect the inter-state price differentials. It suggested their updating using the Consumer Price Index of Industrial Workers (CPI-IW) in urban areas and Consumer Price Index of Agricultural Labour (CPI-AL) in rural areas rather than using National Accounts Statistics.
5. Tendulkar Expert Group (2009): Instead of monthly household consumption, consumption expenditure was broken up into per person per day consumption, resulting in the figure of Rs 32 and Rs 26 a day for urban and rural areas. The national poverty line for 2011-12 was estimated at Rs. 816 per capita per month for rural areas and Rs. 1,000 per capita per month for urban areas.
6. Rangrajan Committee (2014): This committee raised the daily per capita expenditure to Rs 47 for urban and Rs 32 for rural from Rs 32 and Rs 26 respectively3 at 2011-12 prices. Monthly per capita consumption expenditure of Rs. 972 in rural areas and Rs. 1407 in urban areas is recommended as the poverty line at the all-India level.