Expert panel finalizes new methodology for measuring poverty

NEW DELHI: A high-powered committee headed by PMEAC Chairman Suresh Tendulkar has finalized a new methodology for measuring poverty based on a basket of goods consumed by people in urban and rural areas.

"We have finalized the procedure for assessing poverty but have not worked out the proportion of people below the poverty line yet. It is being assessed," the Chairman of the Prime Minister's Economic Advisory Council (PMEAC), Suresh Tendulkar, said.
"We are getting away from the household survey-based assessment to measure poverty," he said, adding the new methodology will be consistent with the poverty assessment based on calorie intake.

When contacted, outgoing Planning Commission member Kirit Parikh, who was also present at the meeting of the committee, said "we are finalizing our report" and will be made public in a fortnight.

The committee, according to sources, has decided on a basket of goods to determine whether an individual or a family is above the poverty line.
According to the existing guidelines, poverty is estimated on the basis of calorie intake, which is different for persons living in urban and rural areas.

The government constituted an expert committee headed by Tendulkar to work out a new methodology for measuring the level of poverty in the country.

Prime Minister Manmohan Singh informed the Rajya Sabha in December that the government was reviewing the current methodology for poverty assessment, which is based on calorie intake.

"There are several ways in which poverty can be measured ... The National Sample Survey is the basis for calculating poverty on a head count basis. The calorie intake in urban areas is 2,100 calories while in rural areas it is 2,400 calories," Singh had said.
A committee headed by economist D T Lakdawala had certified the methodology of calorie intake.

The World Bank's criteria are different from those followed in the country.
Projected poverty reduction during the 11th Five-Year Plan takes into account income levels that are different for urban and rural areas in all the states, instead of the international poverty line.

In the last three Plans, different criteria have been used to identify the poor income was the basis in 1992 while it was consumption patterns in 1997. The Tenth Plan used a door-to-door census with a 13-point questionnaire that graded households on a scale.
The ratio of the poor in the country has dropped from 54.8 per cent of the total population in 1973 to 27.5 per cent in 2004.