PlanCom adopts new poverty estimate

The Planning Commission has adopted the Tendulkar committee’s methodology for poverty estimation, which includes spending on education and health, besides food, taking the number of the country’s poor to a whopping 37.2 per cent, from 27.5 per cent estimated earlier.

The commission, which was asked by the empowered group of ministers (EGoM) on food to give its estimate of below-poverty-line (BPL) families to implement the proposed Food Security Law, was likely to submit its report to Prime Minister Manmohan Singh, sources said.

A Plan panel meeting, chaired by Deputy Chairman Montek Singh Ahluwalia adopted the Suresh Tendulkar Committee report, which had suggested the inclusion of expenditure on health and education, besides food, to compute poverty.

The earlier definition of poverty was based on calorie intake, according to which only 27.5 per cent of people were living below the poverty line as on March 1, 2000, and the number of BPL families was around 65 million.

According to the methodology adopted, 37.2 per cent of the total population, or 81 million families, would be placed below the poverty line.

The new poverty estimate, which would reflect the impact of high growth recorded during the decade, would be available in 2011. The computation of the number of BPL families at this stage assumes significance in view of the government’s decision to enact the Food Security Law, under which 25 kg of foodgrain is to be provided every month at Rs 3 per kg to every BPL family.

The EGoM on food, which had cleared the draft of the Food Security Bill last month, was reportedly asked by UPA Chairperson Sonia Gandhi to relook at the proposal and consider the possibility of raising the highly-subsidised monthly foodgrain allocation to 35 kg from 25 kg, besides increasing the number of beneficiaries. At present, a ration card holder is entitled to get 35 kg of foodgrain every month.

The Planning Commission, sources said, would also submit various estimates of financial burden for implementing the Food Security Law to the prime minister.

The burden on the Central exchequer for implementing the Food Security Law would depend on the number of BPL households and the quantity of subsidised foodgrain available with the government.

Ahluwalia had said food subsidy would rise if there was any increase in the number of BPL families. Food subsidy stood at about Rs 72,000 crore in last financial year.