Rangarajan panel: UP has 2 crore more poor

Uttar Pradesh alone has registered an increase of over two crore poor persons with the change of methodology proposed by an expert panel headed by C Rangarajan (who chaired the PM’s Economic Advisory Council Chief during the UPA-II regime).

The panel, which submitted its report last week, has put the number of poor in 2011-12 much higher than the Tendulkar Committee’s estimates.

The Tendulkar committee estimated 5.98 crore poor in UP, but the Rangarajan panel puts it at over 8 crore. This is true of all the States, which is why now it is estimated that every one out of three Indians is poor.

Even in terms of percentage of population, all the States have seen a rise in the number of poor, with Chhattisgarh leading with a little less than half of its population being poor.

The number of poor has gone up due to a change in parameters of measuring poverty. The new panel says a person spending less than ₹32 (against ₹27 set by the previous committee) would be considered poor in rural areas, while in urban areas, this amount has been set at ₹47 (against ₹33 by the previous committee). It may be noted here that neither of the expert committees defines poverty on the basis of daily consumption.

Monthly spending Instead, they take monthly per capita spending as the parameter. If the monthly figure was divided by 30 to find the average daily number, then the Rangarajan panel estimates a person spending less than ₹1,407/ month to be poor in cities, against the Tendulkar Committee’s suggestion of ₹1,000/month.

In villages, those spending less than ₹972/month would be considered poor, much higher than ₹816/month recommended by the Tendulkar Committee.

The Rangarajan panel was constituted to review the Tendulkar Committee methodology for estimating poverty and clear the ambiguity over the total number of poor. The Tendulkar Committee’s estimates had drawn flak in September 2011, when in an affidavit to the Supreme Court, the Planning Commission stated that households with per capita consumption of over ₹33 in urban areas and ₹27 in rural areas would not be considered poor.

Although, the Government is still to take a final call on the report submitted by the new panel, one thing is clear – whenever the Government accepts the report, it will have to make higher provisioning for welfare schemes, such as Mid Day Meal, Indira Awaas Yojana or the National Food Security Act, as number of poor will be higher.

Though the new panel estimated a higher number of poor, it did find that the reduction in the number of poor was higher than the last committee’s estimate. The earlier committee said around 8.5 crore people were out from the list of poor during 2009-10 and 2011-12. However, the new committee estimates this at over 9 crore.

In absolute terms, the number of poor stood at 36.3 crore in 2011-12, down from 45.4 crore in 2009-10, as per the Rangarajan panel. According to the Tendulkar Committee, the number of poor was 35.4 crore in 2009-10 and 26.9 crore in 2011-12.

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