The income or consumption levels are a typical measure used to estimate poverty in India in the post independence poverty estimation process. This includes the VM Dandekar and N Rath Committee in 1971, the Alagh Committee in 1979, the Lakdawala Committee in 1993, the Tendulkar Committee in 2009 and the C Rangarajan Committee in 2012. In this article, we will study these committees and their recommendations, which are important for the UPSC examination.

What is Poverty Estimation?

• The income or consumption levels are a typical measure used to estimate poverty in India, and if the income or consumption goes below a certain minimal level, the household is said to be below the poverty line (BPL).
• Poverty Line Calculation: Poverty estimation in India is presently carried out by the NITI Aayog task force using data collected by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation to calculate the poverty line (MOSPI).
• In India, poverty lines are calculated based on consumption expenditure rather than income levels.

Post-Independence poverty Estimation

VM Dandekar and N Rath

• In 1971, VM Dandekar and N Rath conducted a systematic assessment of poverty using data from the National Sample Survey (NSS).
• While prior estimates focused on subsistence living or bare minimal necessities as a criterion for the poverty line, VM Dandekar and N Rath proposed that the poverty line's criteria should be based on spending that would supply 2250 calories per day in both rural and urban areas.

Alagh Committee (1979)

• The Taskforce established by the Planning Commission, led by YK Alagh, developed a poverty line for rural and urban areas based on dietary needs and linked consumption expenditure.
• In the following years, the estimates would be updated to account for inflation by taking into consideration the price level.

Lakdawala Committee

• The results of the Lakdawala committee were based on the idea that the baskets were used to construct the Consumer Price Index-Industrial Workers (CPI-IW) and Consumer Price Index-Agricultural Laborers (CPI-AL) reflected the poor's consumption patterns.
• Prof DT Lakdawala chairs an expert group on 'Estimation of Proportion and Number of Poor' (former Deputy Chairman Planning Commission)
• In 1993, the Lakdawala Committee issued a report that included the following recommendations:
• The Poverty Line strategy, which is based on calorie consumption, can be sustained (fixed consumption basket)
• The CPI-IW in urban areas and the CPI-AL in rural areas should be used to create state-specific poverty lines, which should be updated using the CPI-IW in urban areas and the CPI-AL in rural regions.
• National Accounts Statistics should not be used to scale poverty estimations. The Expert Group advised that only NSS data be used.
• In 1997, the Indian government approved the recommendations of the Lakdawala Committee with minimal changes.

*Click here to read more about the Lakdawala Committee.

Tendulkar Committee (2009)

• The following suggestions were made by this committee, which was chaired by Suresh Tendulkar.
  • A shift away from poverty estimate based on calorie consumption
  • India's poverty line basket (PLB) is the same in rural and urban areas.
  • A reform in the price adjustment technique to address geographical and temporal price adjustment difficulties
  • When calculating poverty, private health and education expenditures are taken into account.
• The Mixed Reference Period was employed instead of the Universal Reference Period used by previous committees.
• Using these criteria, the committee determined that the poverty line in rural regions was Rs. 446.68 per capita per month in 2004-2005, and in urban areas, it was Rs. 578.80 per capita per month.
• It was Rs. 859.6 in urban areas and Rs. 672.8 in rural regions in 2009-2010. It was Rs. 1000 in urban areas and Rs. 816 in rural regions in 2010-2011.

*Click here to read more about the Tendulkar Committee.

C Rangarajan Committee (2012)

The Planning Commission established a new group to estimate poverty.

1. Provide a different way of determining poverty levels.
2. Examine discrepancies between the NSSO's consumption data and the aggregates from the National Accounts.
3. Methods for estimating poverty in different parts of the world are examined.
4. Recommend how these strategies can be linked to qualifying for the government of India's various poverty-eradication programs.

The committee's final report was submitted in 2014. The report slammed the Tendulkar Committee's estimate of India's poverty rate. According to the report, this figure was substantially higher in 2011-2012, at 29.5% of the population, implying that three out of ten Indians were impoverished.

*Click here to read more about the C Rangarajan Committee.

Need for Poverty Estimation

• Impact of Welfare Programs: Poverty estimates are significant not only for academic purposes but also for tracking the impact and success of various government policies, particularly social welfare programs aimed at eradicating poverty.
• The Ministry of Rural Development (in collaboration with the state) conducts the BPL Census to identify poor households.
• Poverty Elimination Plan: Poverty estimates in the form of poverty lines are used to create poverty elimination plans that are centred on the poor.
• Constitutional Requirement: Poverty assessment paves the path for poverty elimination, which in turn opens the way for a just and equal society, according to the Constitution.

Conclusion

In post-independent India, many task force groups and committees were set up to estimate poverty in India. Like VM Dandekar and N Rath Committee, Alagh Committee, Lakdawala Committee, Tendulkar Committee, and C Rangarajan Committee. Because of the diverse characteristics employed in estimation by different committees, poverty numbers have fluctuated frequently. Therefore, inadequate scheme targeting occurred after India's independence. In spite of India bringing nearly 200 million people out of poverty in a decade, it has to do a lot more to accomplish SDG 1 which is effective if the estimates are accurate.

FAQs

Question. What is Poverty Estimation in India?

Question. Which committees have contributed to poverty estimation in India?

Question. What is the role of the Tendulkar Committee (2009)?

Question. How did the C Rangarajan Committee (2012) contribute to poverty estimation?

Question. Why is poverty estimation important?

MCQs

1. Which of the following committees introduced changes to poverty estimation by including expenditures on health and education?

A) Alagh Committee

B) Tendulkar Committee

C) Lakdawala Committee

D) Rangarajan Committee

2. What was the poverty line in rural India according to the Tendulkar Committee in 2004-05?

A) Rs. 446.68 per capita per month

B) Rs. 859.60 per capita per month

C) Rs. 1000 per capita per month

D) Rs. 672.80 per capita per month

3. Which method does the NITI Aayog use for poverty estimation?

A) Only income levels

B) Consumption expenditure levels

C) Calorie intake

D) Household wealth

4. What significant shift did the C Rangarajan Committee make in poverty estimation?

A) It used a fixed consumption basket for both rural and urban areas

B) It criticized the Tendulkar Committee's low poverty line estimates

C) It eliminated the inclusion of health and education expenses

D) It focused on income levels over consumption

5. Which year’s poverty estimation figures were used by the Rangarajan Committee for its report?

A) 2004-05

B) 2009-10

C) 2011-12

D) 1997-98

GS Mains Questions and Model Answers

Q1: Analyze the contributions of different committees to poverty estimation in post-independence India.

Answer: Post-independence poverty estimation in India has evolved through the contributions of various committees. The VM Dandekar and N Rath Committee (1971) established the baseline criteria for estimating poverty. The Alagh Committee (1979) refined the methodology, while the Lakdawala Committee (1993) introduced state-specific poverty lines. The Tendulkar Committee (2009) expanded the poverty line definition to include private expenditures on health and education. The C Rangarajan Committee (2012) proposed a higher poverty threshold and highlighted discrepancies in previous estimates.

Q2: How do poverty estimates influence government welfare schemes?

Answer: Poverty estimates provide a critical framework for designing and targeting welfare schemes aimed at poverty eradication. Accurate poverty lines help identify eligible beneficiaries for government programs like food security, rural employment schemes, and direct cash transfers. These estimates allow for better allocation of resources and ensure that the poorest sections of society benefit from welfare initiatives, helping in the effective implementation of poverty alleviation programs.

Q3: Discuss the challenges in accurately estimating poverty in India.

Answer: Accurately estimating poverty in India is complex due to factors such as regional variations, discrepancies in data collection, and the evolving nature of poverty. The diversity in consumption patterns, income sources, and regional disparities often lead to underestimation or overestimation of poverty levels. Additionally, informal sector income, underreporting, and variations in living costs across states make it difficult to create a universally accepted poverty line. These challenges need to be addressed to formulate effective poverty alleviation policies.

Previous Year Questions on Poverty Estimation

1. UPSC CSE 2017

Question: "Discuss the role of poverty estimation in shaping India’s social and economic policies."

Answer: Poverty estimation is a cornerstone in shaping India’s economic policies, especially in terms of resource allocation for welfare schemes, targeting rural development, and designing inclusive growth strategies. Accurate estimation enables policymakers to identify vulnerable populations and track progress toward poverty eradication goals.

2. UPSC CSE 2019

Question: "Assess the impact of the Tendulkar Committee's poverty line on India's poverty measurement and social welfare policies."

Answer: The Tendulkar Committee introduced significant changes to the way poverty was measured by considering expenditure on private services like health and education. This broader definition gave a more accurate reflection of poverty levels, impacting social welfare policies by making them more inclusive and focused on actual consumption needs rather than just caloric intake.