Poverty At 21.9 percent: A Miracle?


The Planning Commission issued a report suggesting that poverty in India has declined to 21.9 percent in 2011-12 from 37.2 percent in 2004-05. It also suggests a more substantial reduction in poverty rate in rural areas as opposed to urban areas.

The number of people living below the poverty line is estimated 217 million in rural areas and 52 million in urban areas in 2011-12 as against the 326 million and 81 million in 2004-05.

Thus, the poverty rate has declined by nearly 17 percent in rural areas and by 12 percent in urban areas.

While these figures present a favorable picture on a macro level, the distribution of the success differs from state to state.

States like Madhya Pradesh and Bihar have shown a significant reduction, from 53.6 percent (2004-05) to 36 percent (2011-12) and from 56 percent (2004-05) to 35 percent (2011-12). On the other hand, rate in rural Assam fell from 36.4 percent (2004-05) to 33.6 percent (2011-12).

According to the Planning Commission, “for rural areas the national poverty line using the Tendulkar methodology is estimated at 816 rupees per capita per month and 1,000 rupees per capita per month in urban areas”. This implies that a person whose consumption is below 33.33 rupees in urban areas and below 27.20 rupees in rural areas is to be considered below the poverty line.

While the people are appalled by these findings, Bharatiya Janata Party (BJP) has voiced its own criticism. According to the BJP, it is just a political gimmick, by lowering the benchmark (as the poverty figures did not reflect the price rise) they want to show that more people are out of poverty.

BJP spokesperson and Rajya Sabha member, Prakash Javedekar, said, “We challenge the congress leaders to show how one can survive on Rs. 34 a day… they want to show more people are rich by changing the definition.”

Despite the furor that has accompanied such a low benchmark for deciding the Below Poverty line (BPL), the government has decided to stick with it. According to the 66th round of the National Sample Survey for 2009-10, the poverty line, based on average monthly consumption expenditure, would be 66.10 rupees for urban areas and 35.10 for rural regions. If such is the report for 2009-10, then shouldn’t it be higher in 2012, given the rising inflation?

In a similar report submitted by the Planning Commission for the year 2009-10, the consumption expenditure per capita was set at 22.3 rupees for rural areas and 30.88 rupees for urban areas. Clearly they have failed to take into account the rising prices for the year 2011-12.

Also, the government has recently announced that its new food security initiative on a National poverty line will stand at a per capita expenditure of  around 50 rupees per day in rural areas and 62 rupees in urban areas. Then, what is stopping the Planning Commission from revising its methodology— politics?

The government has accepted that 65 percent of the Indians are poor. What does that reflect upon the Planning Commission‘s report that suggests only 21.9 percent are poor?

Clearly, the Planning Commission has based its data on outdated surveys which has helped it present a rosy picture. It is about time that a more realistic benchmark is set to determine the poverty line.

Smriti Sharma

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