The measure of poverty

Estimates based on SECC and NSS data have different purposes.

y: C. Rangarajan and S. Mahendra Dev Recently, the government released data from the Socio-Economic Caste Census (SECC) 2011. There has been comment that hereafter, we need not have consumption-based poverty estimates using NSS (National Sample Surveys) data. It is thought that SECC data will alone be enough to estimate poverty and deprivation. Here, we briefly examine the differences between the two and clarify that NSS consumption-based poverty estimates are still relevant. SECC-based estimates are important, but no substitutes for NSS-based poverty ratios. In India, we have a long history of studies on the measurement of poverty. The methodology for the estimation of poverty used by the erstwhile Planning Commission was based on recommendations made by various expert groups. In June 2012, the government of India appointed an expert group (with C. Rangarajan as chairman) to take a fresh look at the methodology for the measurement of poverty. The Rangarajan expert group has gone back to the idea of separate poverty line baskets for rural and urban areas, unlike the Tendulkar Committee, which took urban poverty as a given and used it as the common basket for rural and urban households. In defining the consumption basket separating the poor from the rest, the new expert group took the view that it should contain a food component that satisfied certain minimum nutrition requirements, as well as some normative level of consumption expenditure for essential non-food item groups (education, clothing, conveyance and house rent) besides a residual set of behaviourally determined non-food expenditure. The introduction of norms for certain kinds of non-food expenditures is an innovation. In the absence of any other normative criteria, the median fractile class expenditures were treated as the norm. Based on the analysis presented in the expert group report, monthly per capita consumption expenditure of Rs 972 in rural areas and Rs 1,407 in urban areas is treated as the poverty line at the all-India level. Assuming five members for a family, this will imply a monthly per household expenditure of Rs 4,860 in rural areas and Rs 7,035 in urban areas. The expert group estimates that 30.9 per cent of the rural population and 26.4 per cent of the urban population were below the poverty line in 2011-12. The all-India ratio was 29.5 per cent. Poverty estimates provide the proportion and size of the poor population and their spread across states and broad regions. - See more at: http://indianexpress.com/article/opinion/columns/the-measure-of-poverty/#sthash.mjur3JFn.dpuf