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Rangarajan files report on poverty formula, now for govt to draw the line

New Delhi, July 1 (Agencies & Bureau): Chakravarthi Rangarajan, former head of the Prime Minister’s Economic Advisory Council, has submitted his report on the Suresh Tendulkar Committee’s methodology for estimating poverty.

“I met Minister of State for Planning Rao Inderjit Singh yesterday in Delhi and submitted the report on poverty,” Rangarajan told PTI.

In 2012, the Planning Commission had constituted the expert group under Rangarajan, who was then chairman of the PMEAC, to review the Tendulkar Committee methodology for estimating poverty following a heated public debate over the number of poor in the country.

Tendulkar, a noted economist who took over as the PMEAC chairman from Rangarajan, was asked to go into the poverty line in 2009 and came up with a wider definition. But this formula showed a higher percentage of the population under the poverty line in 2004-05 than the current government formula.

Rangarajan declined to comment on suggestions or recommendations of the panel. “It is not proper for me to tell you. Now government has to take a view on the report,” he said.

The expert group was to submit its report in 7-9 months of its creation. But it got several extensions, and the last deadline was June 30.

The Planning Commission's estimates had drawn flak in September 2011 when, in an affidavit to the Supreme Court, it was stated that households with per capita consumption of more than Rs 32 in urban areas and Rs 26 in rural will not be treated as poor.

Announcing the setting up of the Rangarajan panel, the then Planning Minister Ashwani Kumar had stressed the need for revisiting the methodology.

According to the Commission's estimates based on the Tendulkar methodology, released in July last year, the poverty ratio in the country declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05 on account of increase in per capita consumption.

In 2011-12, the national poverty line by using the Tendulkar methodology was estimated at Rs 816 per capita per month in villages and Rs 1,000 per capita per month in cities.

This meant that those persons whose consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 per capita per day in villages were not classified as poor.