The Tendulkar Committee was established in 2009. The Planning Commission established an expert committee, chaired by Suresh Tendulkar, to evaluate poverty measurement methodology and solve the limitations of prior methodologies such as Obsolete Consumption Pattern, Adjustment for Inflation, and Expenditure on health and education. In this article, we will study about Tendulkar expert group, which is important for the UPSC examination.

Tendulkar Expert Group (2009) - Overview

The Planning Commission established an expert committee, chaired by Suresh Tendulkar, to evaluate poverty measurement techniquesand address the following inadequacies of earlier methods:

• Obsolete Consumption pattern: Consumption patterns were connected to the 1973-74 poverty line baskets (PLBs) of goods and services, but there have been major changes in the poor's consumption habits since then, which were not represented in the poverty estimates.
• Inflation Adjustment: There were problems with price adjustments for inflation, both geographically (across regions) and temporally (across time).
• Health and Education Expenditure:Earlier poverty levels assumed that the state would supply health and education and developed poverty lines accordingly.

Recommendations of Tendulkar Expert Group

• Shift from Calorie Consumption-based Poverty Estimation: It calculated poverty based on the consumption of cereals, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods.
• Uniform Poverty line Basket: Unlike the Alagh Committee (which used distinct PLBs for rural and urban regions), the Tendulkar Committee used the uniform poverty line basket to calculate new poverty lines for rural and urban areas of each state, and found that the all-India poverty line (2004-05) was:
  • ₹446.68 per capita per month in rural areas
  • ₹578.80 per capita per month in urban areas
• Private Expenditure: When calculating poverty, private expenditure on health and education is taken into account.
• Price Adjustment Procedure: The Committee also recommended a new method for updating poverty lines that accounts for changes in prices and consumption patterns (in order to address spatial and temporal issues with a price adjustment) and uses the consumption basket of people living near the poverty line.
• Mixed Reference Period: The Committee advised utilising estimates based on the Mixed Reference Period, rather than the Uniform Reference Period, which was used in previous techniques for assessing poverty.
• For the 2004-05 fiscal year, the Tendulkar Committee calculated poverty levels at Rs 33 per day in terms of purchasing power parity (PPP).
  • Purchasing Power Parity (PPP) is a way of calculating the amount of money required to buy the same products and services in two different countries.

Criticism

However, because the amount was so small, it drew swift criticism from all corners of the media and society.

• The government formed a new committee to study the poverty measurement technique, led by Prime Minister's Economic Advisory Council Chairman C. Rangarajan, because the statistics were unrealistic and too low.
• Despite the Tendulkar Committee's objections, the Rangarajan Committee increased these limitations to Rs. 32 and Rs. 47, respectively, and calculated a poverty line of over 30%.
• Poverty was estimated to be over 30% in 2011-12, according to the Rangarajan committee. In 2011-12, India's poor were estimated to number 36.3 crore.

Conclusion

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.

FAQs

Question: What was the Tendulkar Expert Group of 2009?

Question: Why was the Tendulkar Expert Group formed?

Question: What were the key recommendations of the Tendulkar Expert Group?

Question: How did the Tendulkar Committee's recommendations impact poverty estimates in India?

Question: What criticisms were raised against the Tendulkar Committee's recommendations?

MCQs

1. The Tendulkar Expert Group was constituted to:

A) Create new employment policies

B) Review poverty estimation methodologies in India

C) Reform tax structures

D) Promote industrialization

2. One of the key changes recommended by the Tendulkar Expert Group was:

A) Maintaining a calorie-based poverty line

B) Shifting to consumption expenditure as a poverty measure

C) Removing health and education considerations

D) Lowering the poverty line threshold

3. The Tendulkar Committee recommended:

A) Separate poverty lines for rural and urban areas

B) Uniform poverty lines for both rural and urban areas

C) Focusing solely on urban poverty

D) Ignoring inflation adjustments

4. What was one criticism of the poverty line set by the Tendulkar Expert Group?

A) It was too high and overestimated poverty

B) It was too low, underestimating poverty levels

C) It focused exclusively on urban areas

D) It did not include calorie intake measures

5. The revised poverty estimates after the Tendulkar Committee's recommendations:

A) Decreased significantly

B) Showed no change

C) Increased significantly

D) Only applied to rural areas

GS Mains Questions and Model Answers

Q1: Discuss the contributions of the Tendulkar Expert Group of 2009 to poverty estimation in India.

Answer: The Tendulkar Expert Group of 2009 introduced significant changes to the methodology for estimating poverty in India. Moving away from a calorie-based poverty line, the group adopted a broader measure based on consumption expenditure, which included spending on health, education, and essential goods. It recommended using uniform poverty lines for rural and urban areas and revised the base year for price adjustments. These changes provided a more comprehensive picture of poverty and highlighted the extent of deprivation in the country. The group's recommendations influenced policy measures for poverty alleviation but also faced criticism for setting the poverty line too low. Overall, its work marked a step towards a more nuanced understanding of poverty in India.

Q2: Analyze the impact of the Tendulkar Committee's recommendations on poverty estimates and policy formulation in India.

Answer: The Tendulkar Committee's recommendations had a significant impact on poverty estimates in India, as they led to an increase in the reported number of people living below the poverty line. By shifting from a calorie-based approach to consumption expenditure, the revised methodology offered a more accurate reflection of living standards and highlighted areas needing policy intervention. The increase in poverty estimates brought attention to issues such as health, education, and essential living costs, influencing government policies aimed at poverty alleviation. However, the methodology faced criticism for setting a low poverty line, prompting calls for further refinement to ensure effective targeting of welfare schemes.

Q3: Evaluate the criticisms of the Tendulkar Expert Group's poverty line estimation and suggest potential improvements.

Answer: The Tendulkar Expert Group's poverty line estimation faced criticism for setting the poverty threshold too low, leading to concerns that it underestimated the actual extent of poverty. Critics argued that the poverty line did not reflect the cost of basic needs, including housing, nutrition, and healthcare. Regional disparities and variations in the cost of living were not fully addressed, limiting the accuracy of poverty estimates. Potential improvements include incorporating region-specific poverty lines, accounting for inflation and cost variations, and adopting a multidimensional approach to measure poverty comprehensively. Refining these methodologies can better capture the complexities of poverty and ensure more effective policy interventions.

Previous Year Questions on Tendulkar Expert Group 2009

1. UPSC CSE 2020

Question: Assess the significance of the Tendulkar Expert Group's recommendations for poverty estimation in India.

Answer: The Tendulkar Expert Group's recommendations were significant for improving poverty estimation in India. By shifting from a calorie-based poverty measure to one based on consumption expenditure, the group aimed to provide a more accurate and comprehensive picture of poverty. It included essential expenditures like health and education, highlighting the broader dimensions of living standards. The recommendations led to an increase in the estimated number of people living below the poverty line, drawing attention to the need for targeted poverty alleviation programs. While the recommendations were influential, they also faced criticism for setting a low poverty line, prompting further discussions on refining poverty estimation methodologies.

2. UPSC CSE 2019

Question: Discuss the challenges and limitations of using the Tendulkar Committee's poverty line for policy formulation.

Answer: The Tendulkar Committee's poverty line, based on consumption expenditure, faced challenges and limitations in policy formulation. Critics argued that the poverty line was set too low, underestimating the number of people living in poverty. This led to concerns about inadequate targeting of welfare schemes and limited access to government benefits for those just above the threshold. Additionally, regional disparities and variations in the cost of living were not fully accounted for, making the poverty estimates less accurate in certain areas. To address these issues, a more nuanced approach that considers regional differences and adopts a multidimensional measure of poverty would be beneficial for more effective policy formulation.