Q3 of 28 Page 181

Explain the effort made by various economists to estimate poverty.

The first attempt to measure the poverty in India was made by Dadabhai Naoroji in July 1868. This estimate of poverty was presented in pre-independence in National Planning Committee. After Independence, Minhas published his estimates of poverty rates in 1950s India as recurring and a tough function of each year's harvest. Minhas disagreed the performance of using calories as the basis for poverty estimation and projected a poverty line based on real expenditure per year (Rs 240 per annum). In 1956-57, a good harvest year, he estimated India's poverty rate to be 65% (215 million people). For 1960, Minhas estimated the poverty to be 59%.


The estimate of poverty in India during the 1960s was diverse widely. Dandekar and Rath, on the behalf of the Indian government, estimated that the poverty rate in 1960s remained normally constant at 41%. Ojha, in contrast, estimated that there were 190 million people (44%) in India below official poverty limit in 1961, and that this below-poverty line number enlarged to 289 million people (70%) in 1967. Bardhan also completed that Indian poverty rates increased through the 1960s, reaching a high of 54%. Those above the 1960s poverty level of Rs 240 per year, were in breakable economic groups as well and not doing well either. Minhas estimated that 95% of India's people lived on Rs 458 per year in 1963-64, while the richest 5% lived on an average of Rs 645 per year.


Another Expert Group was instituted in 1993, chaired by Lakdawala, to scrutinize the poverty line for India. It suggested that regional economic differences are large enough that poverty lines should be calculated for each state. From then on, a standard list of commodities was drawn up and priced in each state of the nation, using 1973–74 as a base year. This basket of goods could then be re-priced each year and comparisons made between regions. The Government of India started using a customized version of this method of calculating the poverty line in India.


The Suresh Tendulkar Committee set up to look into the people living under the poverty line in India submitted its report in November 2009. The report provided a new method of calculating the poverty line based on per capita consumption expenditure per month or day. For rural areas, it was Rs 816 per month or Rs 27 per day. For urban areas, it was Rs 1000 per month or Rs 33 per day. Using this methodology, the population below the poverty line in 2009-2010 was 354 million (29.6% of the population) and that in 2011-2012 was 269 million (21.9% of the population).


The Rangarajan Committee set up to look into the poverty line estimation in India submitted its report in June 2014.It amended the calculation of the poverty line based on per capita consumption expenditure per month or day was given by the Tendulkar Committee.The new poverty is the entry for rural areas was fixed at Rs 972 per month or Rs 32 per day. For urban areas, it was fixed at Rs 1407 per month or Rs 47 per day. Under this methodology, the population below the poverty line in 2009-2010 was 454 million (38.2% of the population) and that in 2011-2012 was 363 million (29.5% of the population).


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