- Poverty line
- Centrally sponsored schemes (CSS)
- CSS classification
- Poverty removal schemes
links will be updated once I finish last (first) part on UNDP HDI-2014 report.
Q. Who decides Poverty line?
Q. How does it decide poverty line?
- Monthly per capita Expenditure.
- Suresh Tendulkar designed its Formula.
Q. Who provides the data of monthly Expenditure?
- NSSO- National sample survey organization
- under Ministry of Statistics and Programme Implementation
|Area||Monthly Expenditure per person (Rs.)|
According to Tendulkar formula, poverty has declined, as seen in following graph:
Time for stupid census ranking:
|Highest rural poverty||Lowest poverty|
|highest rural unemployment||highest urban unemployment|
….lowest in Gujarat (3/1000)
….lowest in Gujarat (34/1000)
Tendu Leopard vs Ranga Khush
Earlier Committees: Alagh ’77, Lakdawala ’89
|Set up by||Planning commission||Planning commission|
|Set up in||2005||2012, May|
|Submitted report||2009||2014, July|
|Poverty estimation method||Monthly per CAPITA Expenditure.||Monthly Expenditure of family of five.|
Urban Poverty line
|Urban poverty line (Rs)||Tendulkar||C.Rangarajan|
|per day per person||33||46.90=~47|
|per person per month||1000*||1407|
|per family of five, per month||5000||7035|
*this is their official recommendation. Rest numbers are “derived”.
Rural Poverty line
|Rural poverty line (Rs)||Tendulkar||C.Rangarajan|
|per day per person||27||32|
|per person per month||816*||972|
|per family of five, per month||4080||4860*|
*these are the official numbers recommended by them. Remaining figures are derived.
Why Ranga NAA-KHUSH (unhappy)?
Q. Why is Ranga unhappy with journalists and politicians? Inform “the nation” in 200 words.
- C. Rangarajan has received lot of negative publicity because:
- He kept poverty line to be ridiculously low – Rs.32 for rural and Rs.47 for Urban.
- Therefore He is insensitive towards the poor.
- But Ranga never gave those daily numbers. He had given combined poverty line for a family of five members- Rs.7035 (Urban), which is a plausible number. After all, if you live in a family of five, then some costs will get reduced per head (e.g. rent, lightbill, LPG etc.)
- Besides, if a family spending >7000 per month = their income would be definitely above 7000. So in reality, Ranga has not “insulted” the poor. Infact, He has tried to cover more poor under BPL & Sarkaari schemes.
- Media has derived those “insensitive” daily Expenditure figures (Rs.33, Rs.47) by dividing the monthly Expenditure of five people, then further dividing that number by 30.
- If you objectively convert Ranga’s poverty line into purchasing power parity (PPP), it’s $2.44 per person, per day. And that figure even higher than World bank estimate. In other words, Ranga included more poor in BPL, than even World bank would!
- Thus, journalists and politicians have misinterpreted the poverty line issue- just like they misinterpreted Anti-CSAT movement to be against those 8 easy English MCQs above Decision Making section!
How is 100 million poors increased?
Since Ranga raised poverty line, obviously more people would become “below poverty line”.
|Formula||# of BPL in crores|
|difference||10 crore = 100 million BPL increased.|
anyways moving on
|only calorific value in Expenditure||Calorie +Protein + fat. Explained below|
In the Indian economy books writing during Adam Smith’s time, you’d have read poverty line = “2400 calorie in Rural areas and 2100 calorie in Urban areas.” That was Lakdawalla Committee (1989-1993).
Observe that Ranga reduced the calorie requirement- why?
- Because ICMR study report said so. Besides, over the years use of machinery and vehicles has increased, so today’s generation doesn’t require that much “calorie”. Besides, laborers can get extra energy by chewing calorie-free “Gutkha”.
|gms / day||Rural||Urban|
Coming back to Original topic:
|Only counts Expenditure on food, health, education, clothing.||food + nonfood items such as education, healthcare, clothing, transport (conveyance), rent. + non-food items that meet nutritional requirements.|
|—||Ranga recommends that at any given point of time,
Engel’s law & MPCE
|area||Average MPCE||Highest in||% food Expenditure|
- This indicates rural-urban disparity. Cityfolks have more money to spend than Villagers.
- Engel’s law says: when income rises, % of overall income spent on food item decreases.
- We can see this happening in urban areas. City folks spending ~39% while villagers spending ~49% of their income on food.
- Among states: Kerala spends the least money on
Centrally sponsored schemes (CSS)
|137 schemes||66 (list given in PRSIndia LINK)|
|States did not have any freedom to spend money on their discretion.||10% flexifunds|
|Some of the schemes directly gave money to NGOs and project implementation agencies like DRDA.||Entire money will be transferred to Consolidated fund of the state Government. From there, everyone will get money|
The Union: state contribution ratio will be as following…
|Special category states (JK, NE, Himachal & Uttarakhand)||90||10|
As per Economic Survey, we can classify all Sarkaari schemes, into following categories. And I’ve covered the schemes into the same format in my ch13 summary subparts.
- Poverty removal: we are here (MNREGA, Urban and Rural livelihood missions)
- Health, women and child
- Education & skill
- weaker section: welfare, protection
- Social security
- infrastructure: rural & urban
Poverty removal schemes
Budget and Economic survey discuss only three schemes under this category
- (1) MNREGA
- Livelihood missions: (2) Rural (Ajiveeka) (3) Urban
Let’s check’em one by one
Scheme#1: MNREGA Act 2005
- under Rural Development ministry
- Promises minimum 100 days of unskilled manual work
- To each rural household. (not to each person)
- In a financial year (1st April to 31st March)
- 1/3rd women participation
- Unemployment allowance, if you can’t get work within 15 days
- State governments have to appoint district level ombudsman to hear complaints
- Wages: Material ratio = 60:40
|year||MNREGA wages (CPI-AL)|
for the year 2013, Average work days 46; women participation 52.9%
MNREGA Reforms already taken
- Individual bank/PO accounts for All women
- Widowed, deserted, and destitute women identified and covered under MNREGA scheme.
- Designed “schedule of rates (SoR)” for physically handicapped laborers, so they get fair wages despite providing less output.
- Provided convergence with other schemes such as Nirmal Bharat Abhiyan, Panchayat Yuva khel Kendra, ICDS Anganwadi centres etc.
MNREGA: Economic Survey observations
- MNREGA was supposed to a “panchayat-centric and demand driven” program. But ground reality is different.
- Gram Sabha is unaware of its powers. Social audits not done regularly.
- Hardly any Gram Sabha using MNREGA for public works such as Playground, Anganwadi etc.
- Shortage of Technical staff => Delay in work measurement => delay in payment.
- At many places, males find higher wage-work in nearby towns. Therefore only a few women come at MNREGA site. Big projects cannot be taken up due to worker shortage.
- Suggested reform: Use MNREGA for tourism related infrastructure.
- Budget 2014: promised to use MNREGA for creating Agriculture related “more productive” assets.
Scheme #2: NRLM / Aajeevika
- Who? Rural Development Ministry
- 1999: Swarnjayanti Gram Swarozgar Yojana (SGSY). Later renamed to National Rural Livelihood Mission (NRLM). Finally renamed to Aajeevika.
- Wants to lift rural families from abject poverty
- By 2024, get one person (preferably woman) from each household, into an income generating Self-help groups (SHG).
- By Giving (Bank loans + subsidy + training) to those SHG.
- Economic Survey observation:
- Scheme worked fine for agarbatti, pottery, tailoring and other small business activities.
- But at some places, Government made too much infrastructure investment compared to scope of the given business activity.
Aajiveeka: Budget 2014
- Under Aajiveeka, Women-SHG in backward districts get loans at cheaper interest rate.
- Budget 2014 increased the number of backward districts under this scheme.
|Loan interest rate||Before 2014||after|
|4%||In 150 most backward district||+100 more added = 250|
|7%||Remaining districts||interest rate unchanged (7%)|
Additionally, Budget 2014 also announced “Start Up Village Entrepreneurship Programme” for rural youth. but exact details yet to be worked out.
Scheme #3: National Urban Livelihood mission
- Who? Ministry of Housing & Urban poverty alleviation.
- Earlier called Swarnajayanti Sahari Swarojgar Yojana. Then renamed into National urban livelihoods mission, with following features
- self-help groups: bank credit + subsidies + skill training
- street vendors also get easy loans and skill training
- Shelters for the homeless.
sir ,aapse ak req. h ki aap english medium ke jese hindi midium k student ki bhi kuch help kre pls………………………..
useful ininformatio, clear my topic. Thak u
This information is most important for all of student, we can understand easy, nice information about poverty. So….thank so much.
This information is most important for all of student, we can understand easy.
Sir incredible..Many many thnx..It explains the detail about the intricacies of the report
sir please write a lucid article (like always) on foreign investments (factors, effects, analysis), policies for attracting FI.
i salute you sir
Thank you for the best information you provided for us.
Can you tell something about microfinance.with special reference to Delhi.
As I got to know that Microfinance is for poor people.
And in Delhi it is given through Joint Liability Group(JLG).
Then how they judge Poverty before giving loan.as most people earn more than rs7000 already