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Monday , October 3 , 2011
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Montek to explain Rs 32 line
- PM asks plan panel to clear air on poverty cap

New Delhi, Oct. 2: Prime Minister Manmohan Singh today asked Planning Commission deputy chairman Montek Singh Ahluwalia to clarify the panel’s decision to cap the poverty line ceiling at a per capita daily spend of Rs 32.

Sources said Ahluwalia had been asked to make his panel’s stand clear at a media conference tomorrow.

Ahluwalia had met Singh in what was scheduled to be a briefing on the deputy chairman’s strategic economic dialogue with his Chinese counterpart. But the discussion turned into a session on how to handle the political fallout of the controversy over the poverty line definition in an affidavit before the Supreme Court.

The plan panel had arrived at the estimate on the basis of criteria set by a committee that economist Suresh Tendulkar headed. It said the below poverty line (BPL) category, a tag that determines who is poor enough to qualify for welfare schemes, should include only those who spend up to Rs 32 in urban areas and Rs 26 in villages.

The Tendulkar committee had calculated the numbers based on the ability of a family to afford meals that meet minimum nutritional requirements, measured in calories. Expenses needed for health care and education were also included.

The new definition of poverty, however, drew widespread criticism, with many, even within the ruling UPA, dubbing the benchmarks insensitive and an “insult to the poor”.

While some members of the Sonia Gandhi-led National Advisory Council have ridiculed the criteria, Congress leader Rahul Gandhi is believed to have asked for a rethink.

The figures arrived at imply that a family of five spending less than Rs 4,824 a month (at June 2011 prices) in urban areas will fall in the BPL category. The monthly expenditure limit for a family in rural areas has been fixed at Rs 3,905.

The new benchmarks increase the number of poor people entitled to various government benefits from an earlier estimated 372 million to 407 million.

Plan panel officials say the problem in agreeing to set higher benchmarks in money terms is that it would make nearly half of India’s population entitled to various benefits, including highly subsidised food or, alternatively, food coupons which the draft National Food Safety Act promises.

“The bill to subsidise food for half of India’s population would be impossible for any government to finance…. New ways have to be searched for; perhaps it was a mistake to accept monetisation of the way we determined who is poor,” a plan panel adviser said.

Earlier, the calorific value of food required to stay healthy was determined and anyone believed to be unable to buy or grow food which would give them as many calories was labelled poor.

Ahluwalia will tomorrow meet rural development minister Jairam Ramesh, Planning Commission members Abhijit Sen, Mihir Shah and Saumitra Chaudhuri and also C. Chandramouli, the registrar-general and census commissioner of India.

Sources said Ramesh and Sen, both critics of the Tendulkar formula, were expected to suggest alternative ways to determine who was poor.

Plan panel officials, however, said “no quick-fix solutions” could be expected from one meeting. It would take time, they said, to work out how to stifle criticism for the Rs 32 figure while keeping within a manageable limit the number of people entitled to benefits.

The Congress-led government is keen to roll out the Food Safety Act by the next budget so that the proposed law gets enough time to become a vote-catcher before the next general election in 2014.

Ahluwalia, sources said, also briefed the Prime Minister on his discussions with Chinese officials on ways to reduce India’s $22 billion trade deficit with the neighbour.

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