Need to re-define poverty: C Rangarajan

Interview with Chairman, Prime Minister's Economic Advisory Council

When the Planning Commission came out with poverty line of Rs 28.65 a person a day for urban areas and Rs 22.42 for villages for 2009-10, there were sharp protests by the civil society. The government asked Prime Minister's Economic Advisory Council Chairman C Rangarajan to re-work methodology to calculate poverty. The panel was originally scheduled to submit its report in August. Rangarajan tells Somesh Jha that the Commission will take one more year to complete its work and there would definitely be a change in poverty numbers once the report comes out. Edited interview:

When is your committee expected to roll out the new poverty line methodology?

We have asked for an extension as we really need to conceptually address the issue of how we define poverty and then examine the data available under the latest consumption report by the National Sample Survey Office (NSSO). The latest data came relatively late. Therefore, it may take up to one year before the panel can come out with the estimates.

When the Planning Commission calculated poverty line as Rs 22.42 in rural areas and Rs 28.65 in urban areas for 2009-10, there was vehement criticism from a section of the society. That line was based on Suresh Tendulkar committee recommendations. How different your recommendations could be?

We have to really work on the definition of poverty and we will provide a new one. On the basis of that, we will work out on the poverty numbers.

Many think that poverty numbers based on the Tendulkar committee methodology are an underestimation. Your take?

We will give a new definition of poverty and based on that we will re-estimate the number of people below the poverty line.

Though Tendulkar methodology is being criticized now, it drew kudos when proportion of the people below poverty line rose to 37.2% for 2004-05 against 27.5%, calculated on the basis of earlier methodology. Can we expect similar raise of poverty numbers after your recommendations come?

There will certainly be a change in the numbers but we are still discussing the appropriate definition of poverty. Our panel will apply that to the new numbers that are available (NSSO consumption survey for 2011-12) and come up with an estimate of poverty. We will also work out on the same definition on what the poverty was in the previous five or ten years.