Economic Survey Poverty Line

[Economic Survey] Ch13: Poverty Line Estimation- Tendulkar vs Rangarajan, Engel’s Law, MNREGA, Aajeevikaa, Urban Livelihood

1. Prologue2. Poverty line

1. Tendu Leopard vs Ranga Khush2. Urban Poverty line3. Rural Poverty line4. Why Ranga NAA-KHUSH (unhappy)?5. How is 100 million poors increased?6. Calorie Expenditure7. Engel’s law & MPCE

3. Centrally sponsored schemes (CSS)4. CSS classification5. Poverty removal schemes

1. Scheme#1: MNREGA Act 20051. MNREGA performance2. MNREGA Reforms already taken3. MNREGA: Economic Survey observations

2. Scheme #2: NRLM / Aajeevika3. Scheme #3: National Urban Livelihood mission

Prologue

links will be updated once I finish last (first) part on UNDP HDI-2014 report.

Poverty line

Q. Who decides Poverty line?

of 9Mrunal Economic Survey: Poverty line Rangarajan, MNREGA, Aajeevika, NULM

05-Aug-14http://mrunal.org/2014/08/economic-survey-ch13-poverty-line-tendulkar-rangarajan-engel...

Planning commission

Q. �o� does it decide �overty line?

• Monthly per capita Expenditure.• Suresh Tendulkar designed its Formula.

Q. Who �rovides the d�t� o� �onthly ��endit�re?

• NSSO- National sample survey organization• under Ministry of Statistics and Programme Implementation

Tendulkar’s poverty line�re� Monthly ��endit�re �er �erson ��s.�Rural 816Urban 1000

According to Tendulkar formula, poverty has declined, as seen in following graph:

Mugup the value of Total poors (%wise) & in crores

No. of Poors in India (Tendulkar Method)

�end�l��r ��Poor % 37.2 21.9Poor Cr. 41 27

Time for stupid census ranking:

State wise (Ref. Economic Survey 2013 page 238)�i�hest r�r�l �overty �o�est �overty

1. tie: Odisha, MP2. Bihar3. Assam

1. Kerala (7.1%)2. Himachal (8.1%)3. Punjab (8.3)%

hi�hest r�r�l �ne��loy�ent hi�hest �r��n �ne��loy�ent

1. Kerala 1. Bihar



2. Assam3. Bihar4. WB

… .lowest in Gujarat (3/1000)

2. WB3. Andhra4. Haryana

… .lowest in Gujarat (34/1000)

Tendu Leopard vs Ranga Khush

Earlier Committees: Alagh ’77, Lakdawala ’89

�o��ittees �end�l��r �.��n��r��nSet up by Planning commission Planning commissionSet up in 2005 2012, MaySubmitted report 2009 2014, JulyPoverty estimation method

Monthly per CAPITA Expenditure.

Monthly Expenditure of family of five.

Urban Poverty line

�r��n �overty line ��s� �end�l��r�.��n��r��nper day per person 33 46.90=~47per person per month 1000* 1407per family of five, per month 5000 7035

*this is their official recommendation. Rest numbers are “ derived” .

Rural Poverty line

��r�l �overty line ��s� �end�l��r�.��n��r��nper day per person 27 32per person per month 816* 972per family of five, per month 4080 4860*

*these are the official numbers recommended by them. Remaining figures are derived.

Why Ranga NAA-KHUSH (unhappy)?

Q. Why is ��n�� nh��y �ith �o�rn�lists �nd �olitici�ns? �n�or� �the n�tion� in �� ords.



Villain Ranga (Joginder) is unhappy because mainstream Bollywood directors also making vulgar movies & item-songs, thereby affecting his “ SUSTAINBLE Livelihood ”

• C. Rangarajan has received lot of negative publicity because: ◦ He kept poverty line to be ridiculously low – Rs.32 for rural and Rs.47 for Urban.◦ Therefore He is insensitive towards the poor.

• But Ranga never gave those daily numbers. He had given combined poverty line for a family of five members- Rs.7035, which is a plausible number. After all, if you live in a family of five, then some costs will get reduced per head (e.g. rent, lightbill, LPG etc.)

• Besides, if a family spending >7000 per month = their income would be definitely above 7000. So in reality, Ranga has not “ insulted ” the poor. Infact, He has tried to cover more poor under BPL & Sarkaari schemes.

• Media has derived those “ insensitive ” daily Expenditure figures (Rs.33, Rs.47) by dividing the monthly Expenditure of five people, then further dividing that number by 30.

• If you objectively convert Ranga’s poverty line into purchasing power parity (PPP), it’s $2.44 per person, per day. And that figure even higher than World bank estimate! Thus, Ranga included more poor in BPL, than even World bank would!

• Thus, journalists and politicians have misinterpreted the poverty line issue- just like they misinterpreted Anti-CSAT movement to be against those � e�sy �n�lish M�Qs above Decision Making section!

How is 100 million poors increased?

Since Ranga raised poverty line, obviously more people would become “ below poverty line” .



why does Hindu keep saying 100 million poors added?

Poverty in India: Year 2011�or��l� � o� �P� in croresTendu 27Ranga 37difference 10 crore = 100 million BPL increased.

anyways moving on

Calorie Expenditure

�end�l��r �.��n��r��nonly calorific value in Expenditure Calorie +Protein + fat. Explained below

In the Indian economy books writing during Adam Smith’s time, you’d have read poverty line = “ 2400 calorie in Rural areas and 2100 calorie in Urban areas.” That was Lakdawalla Committee (1989-1993).

��lorie ��d� ��n��Rural 2400 2155Urban 2100 2090

Observe that Ranga reduced the calorie requirement- why?

• Because ICMR study report said so. Besides, over the years use of machinery and vehicles has increased, so today’s generation doesn’t require that much “ calorie” . Besides, laborers can get extra energy by chewing calorie-free “ Gutkha ” .

Ranga also included Expenditure on protein &

fatsgms / day Rural UrbanProtein 48 50



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Economic Survey Poverty Line

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