POVERTY IN RELATION TO INDIA

The ultimate objective of development planning is human development or to increase social welfare and well-being of the people. Increased social welfare of the people requires a more equitable distribution of development benefits along with better living environment. Development process therefore needs to continuously strive for broad-based improvement in the standard of living and quality of life of the people through an inclusive development strategy that focuses on both income and non income dimensions. The challenge is to formulate inclusive plans to bridge regional, social and economic disparities. Poverty and unemployment are the major hurdles in the goal of inclusive development.
Poverty is a social phenomenon wherein a section of society is unable to fulfil even its basic necessities of life. The UN Human Rights Council has defined poverty as “a human condition characterized by the sustained or chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political and social rights".

Types of PovertyThe poverty has two aspects: (1) Absolute poverty (2) Relative poverty.
1. Absolute Poverty: It is a situation in which the consumption or income level of people is less than some minimum level necessary to meet basic needs as per the national standards. It is expressed in terms of a poverty line.

2. Relative Poverty: It is expressed in the form of comparisons of the levels of income, nutrition or consumption expenditure of the poor strata vis-à-vis rich strata of the society. It shows the extent of inequality.

The HDR 2010 measures poverty in terms of a new parameter, namely multidimensional poverty index (MPI), which replaced the human poverty index (HPI) used since 1997. The MPI indicates the share of the population that is multi-dimensionally poor adjusted by the intensity of deprivation in terms of living standards, health, and education.
The Planning Commission which is the nodal agency for estimating the number and proportion of people living below the poverty line at national and State levels, separately for rural and urban areas, makes poverty estimates based on a large sample survey of household consumption expenditure carried out by the National Sample Survey Organization (NSSO) after an interval of approximately five years.
The recommendations of different committees for estimation of poverty:

• Lakdawala Committee The Lakdawala Committee defined the poverty line based on per capita consumption expenditure as the criterion to determine the persons living below poverty line. The per capita consumption norm was fixed at Rs.49.09 per month in the rural areas and Rs.56.64 per month in the urban areas at 1973-74 prices at national level, corresponding to a basket of goods and services anchored in a norm of per capita daily calorie intake of 2400 kcal in the rural areas and 2100 kcal in the urban areas.

• Tendulkar Committee Report to Review the Methodology for Estimation of PovertyThe Planning Commission constituted an Expert Group in December 2005 under the chairmanship of Professor Suresh D. Tendulkar to review the methodology for estimation of poverty. The Expert Group submitted its report in December 2009. While acknowledging the multidimensional nature of poverty, the Expert Group recommended moving away from anchoring poverty lines to the calorie - intake norm to adopting MRP based estimates of consumption expenditure as the basis for future poverty lines and MRP equivalent of the urban poverty line basket (PLB) corresponding to 25.7per cent urban headcount ratio as the new reference PLB for rural areas. On the basis of the above methodology, the all-India rural poverty headcount ratio for 2004-05 was estimated at 41.8 per cent, urban at 25.7 per cent, and all-India at 37.2 per cent. 

• Saxena Committee Report to Review the Methodology for Conducting BPL Census in Rural AreasAn Expert Group headed by Dr N.C. Saxena was constituted by the Ministry of Rural Development to recommend a suitable methodology for identification of BPL families in rural areas. The Expert Group submitted its report in August 2009 and recommended doing away with score-based ranking of rural households followed for the BPL census 2002. The Committee has recommended automatic exclusion of some privileged sections and automatic inclusion of certain deprived and vulnerable sections of society, and a survey for the remaining population to rank them on a scale of 10.

Automatic ExclusionHouseholds that fulfil any of the following conditions will not be surveyed for BPL census:
• Families who own double the land of the district average of agricultural land per agricultural household if partially or wholly irrigated (three times if completely unirrigated).
• Families that have three or four wheeled motorized vehicles, such as, jeeps and SUVs.
• Families that have at least one mechanized farm equipment, such as, tractors, power tillers, threshers, and harvesters.
• Families that have any person who is drawing a salary of over ` 10,000 per month in a non-government/ private organization or is employed in government on a regular basis with pensionary or equivalent benefits.
• Income tax payers.

Automatic InclusionThe following would be compulsorily included in the BPL list:
• Designated primitive tribal groups.
• Designated most discriminated against SC groups, called Maha Dalit groups.
• Single women-headed households.
• Households with a disabled person as breadwinner.
• Households headed by a minor.
• Destitute households which are dependent predominantly on alms for survival.
• Homeless households.
• Households that have a bonded labourer as member.

The Ministry of Rural Development is in the process of conducting the pilot studies and participatory rural appraisal (PRA) exercises to fine tune the methodology.

• Expert Group (S.R. Hashim Committee) on the Methodology for Identification of BPL Families in Urban Areas.
The Ministry of Housing and Urban Poverty Alleviation (HUPA) is the nodal Ministry for issue of guidelines to identify BPL families in urban areas. Till now, no uniform methodology was being followed by the States/UTs to identify the urban poor. An Expert Group under the Chairmanship of Professor S.R. Hashim has been constituted by the Planning Commission to recommend the methodology for identification of BPL families in urban areas. The Expert Group is expected to submit its report shortly.