Page 78 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy

Notes same has dropped to only 20 percent in 2007. According to new definition of poverty, necessary
expenditure on health and education has also been included while assessing poverty.
But Supreme Court has questioned even this ‘improved definition’ of poverty. According to Prof.
Tendulkar’s definition, a person would be treated as poor, as on 2004-05, if his monthly income is less
than Rs. 446.68 in rural areas and Rs. 578.8 in urban areas. Considering the data submitted by the
Planning Commission, Supreme Court questioning the methodology, has asked the Planning
Commission how a person would be able to consume 2400 cal rural areas and 2100 calories in urban
areas than ` 20 a day in urban areas and less than ` 15 in rural areas. It may be noted that as per the
definition of poverty, intake of 2100 calories in areas and 2400 for urban areas has been the drawing
the poverty line in India. As per this 56 percent of population was estimated to be below poverty line
in 1973-74. Before 1973-74, line was defined in such a way that the estimation poverty line was based
on the requisite expenditure attain the desired quantum of calories. But estimation poverty in 1993-
94 and 1999-00 were devoid of sense of proportion and statisticians at Plan Commission were able to
bring down the number poor by statistical jugglery and change in definite poverty. Critics believe
that as per the calorie stand had the price data been properly used poverty figure rural areas would
have been 80 percent and in areas it would have been 50 percent.

Table 6 : Population below the Poverty line in Selected Countries

Country National Poverty Line International Poverty Line
$ per day Survey Rural Urban Total Survey Population Population
(2005)* year % % % year below below
$ 1 a day $ 1 a day

Bangladesh 1.03 2000 53.0 36.6 49.8 2000 41.3 84
Brazil 5.92 2002-03 41.0 17.5 21.5 2004 7.5 21.
China 0.57 1998 4.6 < 2 4.6 2004 9.9 34.
Egypt 1.76 1999-00 16.7 1999-00 3.0 43.
India 0.82 2004-05* 28.3 25.7 27.5 2004-05 34.3 80.
Indonesia 1.07 1999 34.3 16.1 27.1 2002 7.5 52.
Mexico 6.32 2004 27.9 11.3 17.6 2004 3.0 11.6
Nepal 0.87 2003-04 34.6 9.6 30.9 2003-04 24.1 68.5
Pakistan 1.67 1998-99 35.9 24.2 32.6 2002 17.0 73.6
Sri Lanka 1.49 1995-96 27.0 15.0 25.0 2002 5.6 41.6
* Sources : Poverty line ` 356.0 in rural areas and ` 538.6 in urban areas (Per capita monthly
expenditure, Planning Commission Release. March 2007
For other countries, except India, population below poverty—national and international are
taken from World Bank, World Development Report (2008)
† Ravillion, Chen and Sangrula (2008); “Dollar a-day revisted”, Policy Research Paper 4620, World
Bank, Washington D.C. Planning Commission.

If we accept the data presented by the Plan Commission, we find that a person getting daily in of Rs.
20 or more in urban areas and ` 15 or more in areas would not be called poor. If we look at
internationally most commonly accepted definition poverty, it is US$ 1.25 a day. If we convert the
same rupees, it would amount to `58 per day. Though this is lower than what is required for subsisted
a definition which gives poverty line with an which is nearly one third of this amount seemsl
inappropriate. If Planning Commission’s definition poverty itself calls for a minimum consumption
of calories in rural areas and 2100 calories in urban and how can this be achieved with less than ` 20
an areas and ` 15 in rural areas, answer to this question, has been sought by the Supreme Court from

72 LOVELY PROFESSIONAL UNIVERSITY