How is the methodology followed by the Rangarajan Committee different from that of the Tendulkar Committee in measuring poverty in India?

How to Approach

This question requires a comparative analysis of the methodologies employed by the Tendulkar and Rangarajan Committees for poverty estimation in India. The answer should focus on the key differences in their approaches to defining the poverty line, consumption basket, and data sources. A structured response comparing these aspects will be ideal. Mentioning the criticisms faced by each committee will add value. The answer should be concise, within the 150-word limit, and demonstrate a clear understanding of the nuances involved.

Model Answer

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Introduction

Poverty measurement in India has evolved through various committees. Initially, the poverty line was based on nutritional requirements. The Tendulkar Committee (2009) shifted the focus to a normative consumption expenditure basket, anchored in calorie norms but also considering expenditure on non-food items like education, health, and transport. Subsequently, the Rangarajan Committee (2014) aimed to provide a more comprehensive and realistic assessment of poverty, addressing some of the criticisms leveled against the Tendulkar methodology.

Methodological Differences: Tendulkar vs. Rangarajan

The core difference lies in the reference period and data source. The Tendulkar Committee used the Mixed Reference Period (MRP) data from the National Sample Survey Organisation (NSSO), relying on a 30-day recall period for consumption. It defined the poverty line based on the consumption expenditure levels required to obtain a specified calorie intake (2400 calories for rural areas and 2100 for urban areas) and included expenditure on non-food items.

The Rangarajan Committee, however, advocated for a Uniform Recall Period (URP) of 365 days, arguing that MRP underestimates consumption, especially for infrequent but essential items. It also revised the poverty line basket, increasing the expenditure share for health and education. Furthermore, it considered a higher calorie norm (2788 calories for rural and 2157 for urban areas) and used a different price index.

Feature	Tendulkar Committee	Rangarajan Committee
Recall Period	Mixed Reference Period (MRP) - 30 days	Uniform Recall Period (URP) - 365 days
Calorie Norm	2400 (Rural), 2100 (Urban)	2788 (Rural), 2157 (Urban)
Poverty Line Basket	Calorie-centric with non-food expenditure	Expanded basket with higher health & education share

Consequently, the Rangarajan Committee estimated a higher poverty rate than the Tendulkar Committee. Both methodologies faced criticism; Tendulkar for underestimation and Rangarajan for potentially overestimation and data reliability issues.

Conclusion

In essence, the Rangarajan Committee attempted to refine the Tendulkar methodology by addressing concerns about data recall and the composition of the poverty basket. While both committees contributed to the understanding of poverty in India, their differing approaches resulted in divergent poverty estimates, highlighting the complexities inherent in measuring this multifaceted phenomenon. The debate continues regarding the most appropriate methodology for accurately reflecting the socio-economic realities of India.

Answer Length

This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.

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Additional Resources

Key Definitions

Mixed Reference Period (MRP)

A method of data collection where respondents are asked to recall consumption expenditure over different time periods (e.g., last 30 days, last 7 days, last week) to account for varying frequencies of purchases.

Uniform Recall Period (URP)

A method of data collection where respondents are asked to recall consumption expenditure over a fixed period, typically 365 days, to provide a comprehensive picture of annual consumption.

Key Statistics

According to the Tendulkar Committee report (2009), the poverty line at the all-India level was estimated at ₹872 per month for rural areas and ₹538.60 per month for urban areas.

Source: Tendulkar Committee Report (2009)

The Rangarajan Committee estimated that the poverty ratio in India was 29.5% in 2011-12, significantly higher than the 22.3% estimated by the Tendulkar Committee for the same period.

Source: Rangarajan Committee Report (2014)

Examples

Impact of URP on Consumption Estimates

The Rangarajan Committee’s use of URP aimed to capture infrequent purchases like footwear or medical expenses more accurately, which are often missed in MRP due to the shorter recall period. This led to a higher estimation of average consumption expenditure.

Frequently Asked Questions

▶Why is accurate poverty measurement important?

Accurate poverty measurement is crucial for effective policy formulation, targeted interventions, and resource allocation to address the needs of vulnerable populations. It helps monitor progress towards poverty reduction goals and evaluate the impact of development programs.

Topics Covered

EconomySocial IssuesPoverty AlleviationEconomic StatisticsSocial Welfare

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