Rangarajan panel suggests new Poverty Line: Rs.47 per day in urban, Rs. 32 in rural areas

July 7, 2014

Brushing aside the Tendulkar Committee report on poverty estimation, a Committee headed by former RBI governor C Rangarajan has said that the number of poor in India was much higher in 2011-12 at 29.5% of the population, which means that 3 out of 10 persons are poor.
As per the report submitted by C Rangarajan Committee:

Persons spending below Rs. 47 a day in cities should be considered poor, much above the Rs. 33/day mark suggested by the Suresh Tendulkar Committee.
Poverty stood at 38.2% in 2009-10 and reduced to 29.5% in 2011-12. This is in contrast with the Tendulkar report as per which poverty was at 29.8% in 2009-10 and decreased to 21.9% in 2011-12.
A person spending less than Rs. 1,407 a month (Rs. 47/day) should be considered poor in cities, as against the Tendulkar panel’s suggestion of Rs. 1,000 a month (Rs.33/day).
A person spending less than Rs. 972 a month (Rs. 32/day) should be considered poor in villages which is again a variance with Tendulkar committee’s suggestion of Rs. 816 a month (Rs. 27/day).
The number of poor in India was estimated at 36.3 crore in 2011-12, down from 45.4 crore in 2009-10. However, as per Tendulkar panel, the number of poor was 35.4 crore in 2009-10 and 26.9 crore in 2011-12.

Background:
Government set up the Rangarajan Committee in 2013 to review the Tendulkar Committee methodology for estimating poverty and clear the ambiguity over the number of poor in the country. It was a done in a response to the severe criticism of Planning Commission estimates on poverty based on Tendulkar panel report in September 2011 when in an affidavit to the Supreme Court it was stated that households with per capita consumption of more than Rs. 33 in urban areas and Rs. 27 in rural areas would not be considered poor.

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