Govt dilemma: Track poor or poverty

Having flagged poverty as India’s biggest challenge and an obstacle in the path of growth, Prime Minister Narendra Modi’s task force on elimination of poverty in India, which was aimed at suggesting measures to remove the nation’s much-vaunted problem, is in a dilemma on whether to identify the poor or track poverty.

Mr Modi in the first meeting of Niti Aayog’s governing council in February last year, had identified poverty as the prime reason behind the nation’s hampered growth and had in March 2015 formed the task force headed by Aayog’s vice-chairman Arvind Panagariya to find ways to eliminate the vexed problem.

However having missed two deadlines (August 31 and December 31 of 2015), the task force seems nowhere near the completion of its objective, and in fact seems to be struggling with the dilemma of whether to identify the poor or track poverty before thinking of ways to eliminate it.

The task force initially tried avoiding getting stuck with the entire rigmarole of poverty estimation, something which had become the albatross around the previous UPA regime’s neck, as it had to formed two separate panels headed by Prof Suresh Tendulkar and former RBI Governor C. Rangarajan for the same purpose.

However, with the Panagariya task force taking an unusually long time to wrap up its report on poverty elimination, it now seems to be focusing on tracking the poor in both rural as well as urban areas.

Highly-placed sources indicated that tracking the poor needs to be done first, and for this, a bracket (based on earnings of poor households in rural and urban areas) needs to be fixed. Therefore, currently the Niti Aayog task force is busy fixing this bracket even as the main issue of removing poverty, the core objective for which the Prime Minister had formed the panel, remains far from being fulfilled.

The UPA government had set up an expert group under the chairmanship of Prof Suresh Tendulkar in 2005 to review the methodology for estimation of poverty. This panel estimated the extent of poverty using a poverty line defined in terms of monthly per capita consumption expenditure (MPCE). Based on this formula, the erstwhile Planning Commission arrived at a poverty line and poverty ratio.

However after the UPA government’s estimation of poverty based on Tendulkar panel’s calculations faced all-round flak, it had in 2013 formed a fresh panel under the chairmanship of Mr C. Rangarajan to review Prof Tendulkar’s methodology.

While the Tendulkar panel had suggested that a household earning Rs 33 per day in cities should be considered poor, the Rangarajan committee had defined the urban poor as a household which earns Rs 47 per day.

Similarly in rural areas, the Tendulkar panel had recommended that a household earning Rs 27 a day should be considered poor, while the Rangarajan panel in turn suggested that a household in rural India earning Rs 32 a day should be branded as poor.

While the UPA regime demitted office in the midst of this debate, the Niti Aayog task force tried to find a new solution to the problem, but now seems stuck in the same debate.

What has compounded the challenges before the task force further is the release of the data of the socio-economic and caste census (SECC). Efforts are also being made to calculate the rural and urban poor on the basis of this information, and this may further delay the final report of the task force.