Thursday, 26 April 2018

Poverty line

Cover Ch13 Poverty line schemes
Q. Who decides Poverty line?
Planning commission
Q. How does it decide poverty line?
  • Monthly per capita Expenditure.
  • Suresh Tendulkar designed its Formula.
Q. Who provides the data of monthly Expenditure?
  • NSSO- National sample survey organization
  • under Ministry of Statistics and Programme Implementation
Tendulkar’s poverty line
AreaMonthly Expenditure per person (Rs.)
Rural816
Urban1000
According to Tendulkar formula, poverty has declined, as seen in following graph:
Poverty in India Tendulkar formula
MUGUP THE VALUE OF TOTAL POORS (%WISE) & IN CRORES
No. of Poors in India (Tendulkar Method)
Tendulkar20042011
Poor %37.221.9
Poor Cr.4127
Time for stupid census ranking:
State wise (Ref. Economic Survey 2013 page 238)
Highest rural povertyLowest poverty
  1. tie: Odisha, MP
  2. Bihar
  3. Assam
  1. Kerala (7.1%)
  2. Himachal (8.1%)
  3. Punjab (8.3)%
highest rural unemploymenthighest urban unemployment
  1. Kerala
  2. Assam
  3. Bihar
  4. WB
….lowest in Gujarat (3/1000)
  1. Bihar
  2. WB
  3. Andhra
  4. Haryana
….lowest in Gujarat (34/1000)

Tendu Leopard vs Ranga Khush

Earlier Committees: Alagh ’77, Lakdawala ’89
CommitteesTendulkarC.Rangarajan
Set up byPlanning commissionPlanning commission
Set up in20052012, May
Submitted report20092014, July
Poverty estimation methodMonthly per CAPITA Expenditure.Monthly Expenditure of family of five.

Urban Poverty line

Urban poverty line (Rs)TendulkarC.Rangarajan
per day per person3346.90=~47
per person per month1000*1407
per family of five, per month50007035
*this is their official recommendation. Rest numbers are “derived”.

Rural Poverty line

Rural poverty line (Rs)TendulkarC.Rangarajan
per day per person2732
per person per month816*972
per family of five, per month40804860*
*these are the official numbers recommended by them. Remaining figures are derived.

Why Ranga NAA-KHUSH (unhappy)?

Q. Why is Ranga unhappy with journalists and politicians? Inform “the nation” in 200 words.
Poverty line Why is Ranga Khush
VILLAIN RANGA (JOGINDAR) IS ALSO UNHAPPY BECAUSE MAINSTREAM BOLLYWOOD DIRECTORS ALSO RELEASING VULGAR MOVIES & ITEM-SONGS, THEREBY AFFECTING HIS “SUSTAINABLE 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 (Urban), 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. In other words, 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 8 easy English MCQs above Decision Making section!

How is 100 million poors increased?

Since Ranga raised poverty line, obviously more people would become “below poverty line”.
Rangarajan Poverty line 100 million increased
WHY DOES HINDU KEEP SAYING 100 MILLION POORS ADDED?
Poverty in India: Year 2011
Formula# of BPL in crores
Tendu27
Ranga37
difference10 crore = 100 million BPL increased.
anyways moving on

Calorie Expenditure

TendulkarC.Rangarajan
only calorific value in ExpenditureCalorie +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).
CalorieLakdaRanga
Rural24002155
Urban21002090
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 & fats
gms / dayRuralUrban
Protein4850
fats2826
Coming back to Original topic:
TendulkarC.Rangarajan
Only counts Expenditure on food, health, education, clothing.food + nonfood items such as education, healthcare, clothing, transport (conveyance), rent. + non-food items that meet nutritional requirements.
—
  • Urban poverty increased on faster rate (40%) than rural poverty (19%)
  • This is obvious, because Ranga included non-food items like rent, education etc.
  • These items/services are more expensive in cities than in villages.
—Ranga recommends that at any given point of time,
  • bottom 35% rural junta always be considered poor
  • bottom 25% urban junta always be considered poor.
—
  • Poverty ratios should be disengaged from entitlements under Government schemes.
  • e.g. cheap foodgrain quota under Food Security Act should not be based on BPL-ness, but social-caste census.

Engel’s law & MPCE

Monthly per capita Expenditure: NSSO 68thRound (2011-12)
areaAverage MPCEHighest in% food Expenditure
UrbanRs.2399Haryana38.5%
RuralRs.1278Kerala48.6%
  • This indicates rural-urban disparity. Cityfolks have more money to spend than Villagers.
  • Engel’s law says: when income rises, % of overall income spent on food item decreases.
  • We can see this happening in urban areas. City folks spending ~39% while villagers spending ~49% of their income on food.
  • Among states: Kerala spends the least money on

Centrally sponsored schemes (CSS)

In June 2013, UPA-II revamped CSS
BEFOREAFTER
137 schemes66 (list given in PRSIndia LINK)
States did not have any freedom to spend money on their discretion.10% flexifunds
Some of the schemes directly gave money to NGOs and project implementation agencies like DRDA.Entire money will be transferred to Consolidated fund of the state Government. From there, everyone will get money
—
  • For every new scheme, states will have to contribution some money themselves. explained below:
The Union: state contribution ratio will be as following…
AreaUnionStates
Special category states (JK, NE, Himachal & Uttarakhand)9010
other states7525

CSS classification

As per Economic Survey, we can classify all Sarkaari schemes, into following categories. And I’ve covered the schemes into the same format in my ch13 summary subparts.
  1. Poverty removal: we are here (MNREGA, Urban and Rural livelihood missions)
  2. Health, women and child
  3. Education & skill
  4. weaker section: welfare, protection
  5. Social security
  6. infrastructure: rural & urban

Mrunl 2013
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