A new Committee headed by C. Rangarajan has been constituted to re-examine the methodology for estimating poverty in India. The last such review was done by the Lakdawala Committee in 1993 and the Tendulkar Committee in 2005. The Tendulkar Committee estimated the national poverty line at Rs. 446.68/month in rural areas and Rs. 578.80/month in urban areas. However, the poverty line is inadequate and the methodology needs improvement to accurately measure poverty levels across states. The new Committee will develop a set of standards rather than a single benchmark like calorie intake to better estimate poverty.

1. Economy: New Committee for Poverty Estimation
Recently a new Committee headed by C. Rangarajan has been constituted to re-examine
the methodology for fixing the poverty line and estimating the increase of poverty in the
country. Initially last such review of the methodology was done by Lakdawala
Committee (1993) which recommended poverty estimation on a minimum calorific
intake. Which was later undertaken by Suresh Tendulkar Committee (2005), which
submitted its report in 2009 and its recommendations were accepted in 2011. It included
consumption expenditure on health & education in the estimation methodology. As per
the Tendulkar Committee report, the national poverty line at 2004-05 prices was a
monthly per capita consumption expenditure of Rs. 446.68 in rural area and Rs. 578.80 in
urban areas. Though the above poverty line which refers to the national average, vary
from state to state because of price differential.
Reason for Estimating the Methodology Again
1. The first reason is the absolute value of the poverty line, because only Rs. 32/day in
rural area and Rs. 26/day in urban area is a found to be inadequate to lift a person out of
poverty.
2. The poverty estimation on the calorific value by the Lakdawala Committee also failed
to serve the purpose because the calorific intake of the poor was found to be much shorter
than that estimated.
3. Also the incidence of poverty at the national and the state level found to vary and
unacceptable. So, in order to estimate the poverty line properly, the newly formed
Committee should go for a set of standards rather than going for a single benchmark
(such as only calorific value or daily income basis only).
Definition:
Poverty Line: It is defined as the level of income below which one cannot afford to
purchase the basic resources required to live. While comparing poverty across countries,
the purchase power parity exchange rate is used.
Importance from Examination point of view:
i) Short note - Poverty Line
ii) Key points of the Committee and Recommendations
iii) 2004: Paper - II (Q. 4-b):- How is poverty level measured? Evaluate poverty
eradication programmes in India.
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