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Poverty Line Debate

The planning commission in an affidavit filed in the Supreme Court on 20 Sept 2011 said that anyone spending more than Rs 965 per month in urban India and Rs 781 in rural India will be deemed to be not poor.

The Commission said those spending in excess of Rs 32 a day in urban areas or Rs 26 a day in villages would no longer be eligible to draw benefits of central and state government welfare schemes for those below poverty line.

These provisional figures are based on the Tendulkar Committee report updated for current prices by taking account of the Consumer Price Index for industrial and Agricultural Workers.

Poverty numbers are identified on basis of monthly expenditure. Planning Commission on basis of National Sample Survey Office Survey on monthly expenditure had tabulated the poverty line. Poverty line is defined once in five years and next will be done in 2012 on basis of NSS Survey of 2011-2012.

There are widespread divergent views within the Planning Commission regarding this debate. Some members are saying that the affidavit filed in the Supreme Court related to determining the number of poor in India was never discussed in the panel's internal meeting.

Leading Economists have severely criticized the national poverty lines set by the Planning Commission at Rs 32 and Rs 26 per capita per day for urban and rural areas. It is counterproductive to link the official poverty estimates to basic entitlements of the people.

The Arjun Sengupta chaired National Commission for Enterprises in the Unorganized Sector used an income-based criterion of Rs 20 per day per capita.

The NC Saxena Committee used consumption based criteria in 2009 to say that 50 % of Indians lived below the poverty line.