[Economic Survey] Ch13: Poverty Line Estimation- Tendulkar vs Rangarajan, Engel’s Law, MNREGA, Aajeevikaa, Urban Livelihood

Cover Ch13 Poverty line schemes

[Economic Survey] Ch13: Poverty Line Estimation- Tendulkar vs Rangarajan, Engel’s Law, MNREGA, Aajeevikaa, Urban Livelihood

  1. Prologue
  2. Poverty line
    1. Tendu Leopard vs Ranga Khush
    2. Urban Poverty line
    3. Rural Poverty line
    4. Why Ranga NAA-KHUSH (unhappy)?
    5. How is 100 million poors increased?
    6. Calorie Expenditure
    7. Engel’s law & MPCE
  3. Centrally sponsored schemes (CSS)
  4. CSS classification
  5. Poverty removal schemes
    1. Scheme#1: MNREGA Act 2005
      1. MNREGA performance
      2. MNREGA Reforms already taken
      3. MNREGA: Economic Survey observations
    2. Scheme #2: NRLM / Aajeevika
    3. Scheme #3: National Urban Livelihood mission


links will be updated once I finish last (first) part on UNDP HDI-2014 report.

Poverty line

Cover Ch13 Poverty line schemes

Q. Who decides Poverty line?

Planning commission

Q. How does it decide poverty line?

  • Monthly per capita Expenditure.
  • Suresh Tendulkar designed its Formula.

Q. Who provides the data of monthly Expenditure?

  • NSSO- National sample survey organization
  • under Ministry of Statistics and Programme Implementation
Tendulkar’s poverty line
Area Monthly Expenditure per person (Rs.)
Rural 816
Urban 1000

According to Tendulkar formula, poverty has declined, as seen in following graph:

Poverty in India Tendulkar formula

Mugup the value of Total poors (%wise) & in crores

No. of Poors in India (Tendulkar Method)
Tendulkar 2004 2011
Poor % 37.2 21.9
Poor Cr. 41 27

Time for stupid census ranking:

State wise (Ref. Economic Survey 2013 page 238)
Highest rural poverty Lowest poverty
  1. tie: Odisha, MP
  2. Bihar
  3. Assam
  1. Kerala (7.1%)
  2. Himachal (8.1%)
  3. Punjab (8.3)%
highest rural unemployment highest urban unemployment
  1. Kerala
  2. Assam
  3. Bihar
  4. WB

….lowest in Gujarat (3/1000)

  1. Bihar
  2. WB
  3. Andhra
  4. Haryana

….lowest in Gujarat (34/1000)

Tendu Leopard vs Ranga Khush

Earlier Committees: Alagh ’77, Lakdawala ’89

Committees Tendulkar C.Rangarajan
Set up by Planning commission Planning commission
Set up in 2005 2012, May
Submitted report 2009 2014, July
Poverty estimation method Monthly per CAPITA Expenditure. Monthly Expenditure of family of five.

Urban Poverty line

Urban poverty line (Rs) Tendulkar C.Rangarajan
per day per person 33 46.90=~47
per person per month 1000* 1407
per family of five, per month 5000 7035

*this is their official recommendation. Rest numbers are “derived”.

Rural Poverty line

Rural poverty line (Rs) Tendulkar C.Rangarajan
per day per person 27 32
per person per month 816* 972
per family of five, per month 4080 4860*

*these are the official numbers recommended by them. Remaining figures are derived.

Why Ranga NAA-KHUSH (unhappy)?

Q. Why is Ranga unhappy with journalists and politicians? Inform “the nation” in 200 words.

Poverty line Why is Ranga Khush

Villain Ranga (Jogindar) is also unhappy because mainstream Bollywood directors also releasing vulgar movies & item-songs, thereby affecting his “SUSTAINABLE Livelihood”

  • C. Rangarajan has received lot of negative publicity because:
    • He kept poverty line to be ridiculously low – Rs.32 for rural and Rs.47 for Urban.
    • Therefore He is insensitive towards the poor.
  • But Ranga never gave those daily numbers. He had given combined poverty line for a family of five members- Rs.7035 (Urban), which is a plausible number. After all, if you live in a family of five, then some costs will get reduced per head (e.g. rent, lightbill, LPG etc.)
  • Besides, if a family spending >7000 per month = their income would be definitely above 7000. So in reality, Ranga has not “insulted” the poor. Infact, He has tried to cover more poor under BPL & Sarkaari schemes.
  • Media has derived those “insensitive” daily Expenditure figures (Rs.33, Rs.47) by dividing the monthly Expenditure of five people, then further dividing that number by 30.
  • If you objectively convert Ranga’s poverty line into purchasing power parity (PPP), it’s $2.44 per person, per day. And that figure even higher than World bank estimate. In other words, Ranga included more poor in BPL, than even World bank would!
  • Thus, journalists and politicians have misinterpreted the poverty line issue- just like they misinterpreted Anti-CSAT movement to be against those 8 easy English MCQs above Decision Making section!

How is 100 million poors increased?

Since Ranga raised poverty line, obviously more people would become “below poverty line”.

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