Business Standard

Rangarajan to head new poverty panel

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The government on Thursday announced the formation of a new expert committee under the Prime Minister’s Economic Advisory Council Chairman, , to revisit the methodology for estimation of poverty and identification of the poor, months after a poverty line cut-off, based on the method proposed by , had created a flutter.

Rangarajan has been asked to give the report in seven to nine months. The committee comprises four additional members.

The panel would also look into the vexed issue of linking poverty estimates with providing benefits under the Centre’s social welfare schemes. Earlier, the government believed poverty estimates by the should not be used for determining beneficiaries for programmes like the proposed .

The panel would also assess whether poverty can be determined on any criteria other than the consumption basket. “The panel will also assess if the two (consumption basket and other methods) can be effectively juxtaposed for estimating poverty in rural and urban areas,” said an official statement.

“People’s perspective about poverty has changed. Therefore, we need to take a fresh look into the methodology for estimating poverty in the country,” Minister of State for Planning said, while explaining the rationale behind setting up the panel. The panel would examine the divergence between consumption estimates based on the National Sample Survey Organisation (NSSO)’s methodology and those emerging from the National Account aggregates. It would also suggest a method to update the consumption poverty line, using the recently-released consumer price index data for rural and urban areas.

Kumar said the committee would study the various poverty estimation models used across the world and suggest the best alternative for India.

Other members of the panel are Mahendra Dev, director, Indira Gandhi Institute of Development Research, K Sundaram and Mahesh Vyas from the Centre for Monitoring Indian Economy, and , former advisor (perspective planning), Planning Commission.

In March, a controversy was triggered when the Planning Commission had said the poverty line cut-off for 2009-10 in urban areas stood at Rs 28.65 a day and Rs 22.42 a day in rural parts. The estimation was based on the Suresh Tendulkar committee’s method and the NSSO survey on the consumption pattern for 2009-10.

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