No consensus yet on the poverty line: Panagariya

“Suggestions on where to set the poverty line have been mixed…. some States have suggested a preference for a higher poverty line. Some participants also pitched for multi-dimensional definition,” says NITI Aayog Vice-Chairman Arvind Panagariya. . He and his team have been holding consultations with the States before taking a final call on the issue.

Panagariya shared with BusinessLine the progress on deriving poverty numbers, the Model Act for legalising farmland leases, status on strategic sale of public sector undertakingsand other tasks before his team as it works on a 15-year vision document. Excerpts:

NITI Aayog is now holding consultations with States to derive a poverty number. How have the States responded? Have they expressed any concerns? The draft NITI Aayog report at present deals with rural poverty, are you also going to consider urban poverty?

All States have welcomed the recommendations of the taskforce that poverty line be used only to track the poor and not to either identify poor for disbursement of benefits or for the allocation of expenditures on various social programmes. 

Suggestions on where to set the poverty line have been mixed.  Some States have found the Tendulkar line satisfactory for tracking the poor since the purpose is to track whether or not progress is being made in reducing extreme poverty.  But other States have suggested a preference for a higher poverty line. Some participants also pitched for a multi-dimensional definition.

You have proposed a Model Act for legalising farmland leases. The definition of ‘farmland’ is proposed to be broadened to include food processing. How will it help the sector? By when is the final draft on the Model Act likely to be ready?

The Expert Committee on Model Law on Land Leasing has submitted its report and it can be found on the NITI Aayog website.  The committee’s recommendations include leasing provision for processing of agricultural produce in addition to other conventional agricultural activities. This is because food processing benefits farmers supplying agricultural produce and it creates jobs that would potentially benefit the workers in agricultural sector. 

The final decision in the matter will, of course, be of the States. They will need to tailor the model law to their specific needs.

India is talking about skill development, but job creation is a major concern. What is the way forward?

We have to keep moving on both fronts: impart skills that make workers more employable and introduce reforms that create jobs. We have made progress on both fronts during the last two years. Skill development has been accelerated and we will see further acceleration in vocational training in the near future. The passage of the bankruptcy law is an important development for boosting economic activity that will generate jobs.  

NITI Aayog has been given the task of identifying PSUs for strategic sale. Issues involved are two — reviving sick units and strategic sales. Has some blueprint been prepared?

We are in the process of finalising the recommendations on sick units.  The work on identifying units for strategic sale is under way.

There is talk of the government going slow on bank consolidation given its experience in the Air India-Indian Airlines merger. What should the approach be for merger and consolidation?

We must naturally learn from experience and avoid past mistakes.  That said, consolidation of banks is on the government’s policy agenda. The pace and process will, of course, be determined by the Finance Ministry.

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