Poverty eradiation remains a major challenge in creating a just and equitable society. The first step towards eradication of poverty is to estimate proportion of people living below the Poverty line. However, there is a considerable debate and controversy surrounding Poverty line estimation.
On one hand, successive Governments have highlighted the success of their schemes and programmes in reducing the BPL population. While, on the other hand, it has been highlighted that Poverty line in India is too low and hence India may be underestimating the BPL population.
CONTROVERSY OVER THE LATEST POVERTY LINE ESTIMATES
Presently, the proportion of people living below the Poverty line is estimated based upon the methodology recommended by Suresh Tendulkar Committee.
| Poverty Estimation based upon Suresh Tendulkar Committee | |||||
| Year | Poverty line (Rs) | Poverty head count ratio | |||
| Rural | Urban | Rural | Urban | All-India | |
| 2004-05 | Rs 446 | Rs 578 | 41.8% | 25.7% | 37.2% |
| 2011-12 | Rs 816 | Rs 1000 | 25.7% | 13.7% | 21.9% |
Current Debate about Poverty line Estimation
| CONTROVERSY SURROUNDING POVERTY LINE ESTIMATION | |
| Problems | Counter Arguments |
| Outdated Poverty Line Basket: Poverty varies across time. As standard of living has improved, the poverty line basket also needs to be updated. Items which were considered as luxury have now become necessity (Mobile, TV, Bank Account etc.). However, these items are not part of poverty line basket. Poverty line is too low: Poverty line of Rs 27 in rural areas and Rs 33 in urban areas fails to capture true scenario of poverty in India. Hence, India may be underestimating BPL population. Flawed Assumption: Poverty line estimation is based on flawed assumption that if people can meet their basic food needs, they would also be able to meet non-food requirements as well. That is why non-food requirements such as Mobile, TV etc. is not considered. We need to understand that the priority for the people is to meet their food requirements. After meeting their food requirements, they may not have money left for non-food expenses. No multi-dimensional view of poverty: Fails to realize that poverty is on account of multiple deprivations such as education, health, housing, sanitation etc. For example, according to Global Multi-dimensional Poverty Index (MPI 2020), 28% of India’s population is poor. This is much higher than our official estimates of 22%. | Official poverty line estimates closer to World Bank’s estimates: World Bank has set International Poverty line at $1.90 a day at 2011 international prices. 22.5% of population live below poverty line (World Bank, 2011). This is comparable to official estimates of 22%. Poverty line estimation is only for statistical purposes: Opposition parties highlight that decrease in BPL population due to artificially lower poverty lines would lead to exclusion of the people from beneficiary list in government schemes and programmes. But the Government believes that estimation of BPL population and identification of beneficiaries are two different things. The identification of beneficiaries for government schemes and programmes (such as Ayushman Bharat, PM Awas Yojana, PM Ujjwala Yojana etc.) is not just limited to BPL population. It also includes APL population as well. Identification of beneficiaries takes place based upon the Socio-Economic Caste Census (SECC) and hence has no relation to Poverty line estimation. Frequent updating of Poverty Line Basket (PLB) would make it difficult to track our progress in poverty alleviation. It would also make it difficult to analyse the impact of government schemes and programmes in eradicating poverty. |
WAY FORWARD
Perceptions of what defines basic human needs vary widely. Hence, views on "What should be the Poverty line?" and "What should constitute Poverty line Basket?" vary and likely to give rise to controversy and debate. So, should we do away with the Poverty line altogether??
No, fixing a poverty line (though controversial and debatable) has its own advantages. It helps us track our progress in poverty reduction as enshrined under SDG 1 (Ending Poverty in all its manifestations). It also helps us to analyse the impact of Government schemes, policies and initiatives. In this regard, Arvind Panagariya Taskforce on Elimination of Poverty has outlined the 4 options with respect to Poverty line.
Option 1: Continue with the Tendulkar poverty line
Option 2: Accept the Rangarajan poverty line or higher rural and urban poverty lines
Option 3: Track progress of the bottom 30 of the population
Option 4: Track progress along specific components of poverty such as nutrition, housing, drinking water, sanitation, electricity and connectivity. (Option 3 and 4 can be complementary to option 1 or 2 but cannot be a substitute for it).