Monday, 25 April 2011

POVERTY: India: 27 million out of poverty net

Chetan Chauhan, Hindustan Times:  April 20, 2011
A new data analysed by the Planning Commission says that around 382 million Indians were below poverty line in 2009-10, a decline of 27 million since 2004-05. The decline of over five percentage points (from 37.2% to 32%) in as many years was much less than the target of annual reductio n of 2% in poverty in the 11th plan. What the UPA government can showcase is the highest poverty reduction since 1993 when annual rate of reduction was 0.7%.
"The results are neither good nor bad," said Abhijit Sen, plan panel member, who calculated the new poverty figures for India based on preliminary data provided by the National Sample Survey Organisation (NSSO) of its survey for the year 2009-10.
"Not good because we may not achieve the 11th plan target. Not bad as there was a drought year and global economic recession in between".
The panel’s analysis show higher poverty reduction in urban India because of more increase in income levels than in rural parts.
"Economic growth has helped in poverty reduction in India and China," said a global monitoring report 2011 of the World Bank and International Monetary Fund (IMF).
Sen had used the same cost of living index derived by Suresh Tendulkar Committee for calculating India poverty in 2004-05 to be 37.2%.
The only difference was on price indices to calculate the cost of living. Sen opted for consumer price index whereas Tendulkar had used NSSO data on inflation. The cost of living index is the monthly expenditure on basic food, health and education.
Announcing the decline on the day Supreme Court questioned commission’s poverty estimation methodology, the panel deputy chairperson Montek Singh Ahluwalia said he agrees with Sen’s assessment and added the exact impact of the 11th plan on poverty reduction will be known only when results of second sample survey of 2011-12 are available in 2013. The 11th plan ends in March 2012.
The new poverty estimate will have implications for the proposed National Food Security Law, which is being hotly debated between the National Advisory Council and the UPA government. The new estimation could mean fall in the food subsidy burden for the government as till now all the calculations were being done on 37.2% estimation.
"It can help in bridging the differences between the NAC and the government of NFSL," a senior plan panel functionary said and informed the new figures will be presented at the next meeting of the Group of Ministers on food on April 25.
The commission is, however, expected to come with final poverty estimation figure later this year once the NSSO submits its report.
"We will submit final data by this June," said TC Ananth, the chief statistician of India.

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