Rangarajan report: Why it cannot be completely written off

First Post
Publication Date: 
Tuesday, 8 July 2014

A panel headed by former PMEAC Chairman C Rangarajan has dismissed the Tendulkar Committee report on estimating poverty and said that the number of poor in India was much higher in 2011-12 at 29.5 percent of the population, which means that almost three out of 10 persons are poor.

As per the report, individuals spending below Rs 47 a day in cities and Rs 32 in rural areas would be considered poor, much above the Rs 33-per-day mark for urban poor and Rs 27 for the rural poor suggested by the Suresh Tendulkar Committee.

While the BJP had strongly criticised the Tendulkar committee report, this new report does not make much of a difference as Rs 47 is a shockingly low amount. Congress leader Abhishek Manu Singhvi said, "Poverty lines are not normative ideals. They are not desirable. Even Rs 100 is nothing in Delhi. These are technical things done by economists to have uniformity. Figures should be much much higher. The reality of Indian purchasing power and technical formulae have been applied to this report. These are technical reports based on technical figures." He was speaking during a panel discussion on CNN-IBN.

After all the criticism that the BJP had heaped upon the Tendulkar committee report, the government is yet to make a statement on the Rangarajan report. When asked if the BJP will accept this report, party leader Nalin Kohli said, "I don't know whether it really matters where the line is drawn, the fact is that Indians still go hungry. The work of the government is to eliminate that."

As per Rangarajan panel estimates, a person spending less than Rs 1,407 a month would be considered poor in cities, as against the Tendulkar Committee's suggestion of Rs 1,000 a month. In rural areas, those spending less than Rs 972 a month would be considered poor. This is much higher than Rs 816 a month recommended by Tendulkar Committee.

Author Shankar Aiyar was of the opinion that these figures show the lack of opportunity. "The difference between the two reports reflects inflation, it also reflects inflation of expectation. What we must recognise is that unlike other countries, these figures are drawn out of expenditure. It is nice for political parties to say that they don't believe this number but promise to reduce poverty. If they don't believe the numbers what will they reduce? We are dealing with a very highly divided society," he said.

He said that the BPL line must not be used to define poor when it comes to disbursing subsidies. "Any service of the government that allows a child to get education, these cannot be put under BPL. The UPA government did not use poverty line to give laptops nor did the Karunanidhi government. This should bring the focus of the government on what they should spend on and not how many poor they will uplift," Aiyar said.

Meanwhile president of the Centre for Civil Society Parth J Shah pointed out, "There are better ways of calculating poverty lines. Many countries use other methods. The reason why we have the poverty line is to decide the economic performance of the government."

According to the Rangarajan panel, in absolute terms, the number of poor in India stood at 36.3 crore in 2011-12, down from 45.4 crore in 2009-10. However, from Sitaram Yechury to Mayawati, most opposition parties have called it a joke. Given the reaction, can this report be taken seriously? Singhvi said, "I am not one of those who is junking the report. They do it on the basis of their own formulae. You cannot junk that on a political debate because the number is too low or high. It is vitally necessary to have a poverty line otherwise the prime ministers, be it Modi or Manmohan Singh, cannot disburse government schemes."

Meanwhile, Shah argued that a negative elimination should be done for such subsidies or schemes. "To target subsidies is not to go by the BPL, but define a negative list. That is people who are not excluded like those who pay property tax or withdraw a certain amount of money from the bank should not be included."

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