Poverty meter: Government works out new formula to count the poor

NEW DELHI: The government is likely to fix the poverty line based on the criteria suggested by the S D Tendulkar-headed task force last year after the new survey for identifying below poverty line households is complete.

The new survey methodology to identify the poor is yet to be finalised, though recommendations made by the NC Saxena committee and eminent economists like Jean Dreze are likely to be the basis for it, a Planning Commission official has said.

The Planning Commission’s earlier estimate of the poor has been criticised for being based on an outdated poverty line and commodity basket that date back to 1970s. Even the survey methodology has been faulted for leading to the inclusion of several non-BPL families and exclusion of many BPL families.

The criteria suggested by the Tendulkar task force for fixing the poverty line and the new survey methodology are expected to address these shortcomings. Pilot projects based on the new survey methodology are expected to start next month. These would be closely monitored by both states and non-government organisations to make it inclusive and technically credible, the Planning Commission official said.

The Tendulkar committee has pointed out that rural poverty was under-stated because it was based on 1973-74 prices and a dated consumption basket. The committee has recommended changes in the price index and also widening the consumption bundle to include expenditure on items such as health and education.

As per the committee’s estimates, the number of poor in the country was a high 37.2% of the population in 2004-05 as opposed to the Planning Commission’s estimate of 27.5%.

Once officially accepted, the cut-off suggested by the Tendulkar panel will be used to count the poor when the BPL census is complete and the poor are identified and ranked, the official said.

The BPL census of 2002 was based on 13-question count, each carrying four marks. The respondents were classified as poor if they scored less than 14. It resulted in several wrong inclusions and also exclusion of the genuinely poor. A pilot survey could have helped identify these faults in time, a mistake the government wants to avoid this time.

“We are not only going to carry out pilots, we will also ensure that the survey is inclusive and technically credible with the involvement of state governments and civil society organisations,” the official said.

The stakeholder participation in the survey process will also help the government avoid public interest litigations which could stall the entire process, the official added.

The NC Saxena committee has recommended a score-based ranking, besides recommending parameters for “automatic inclusion” and “automatic exclusion” for some categories of households.

The alternative methodology, suggested by Dreze, deals with an “exclusion approach”, whereby all households are entitled to social support except if they meet pre-specified exclusion criteria.