Question

The followings statements relate to the definition of poverty in India :

(a) Poverty line is defined in terms of calories.

(b) Poverty and hunger are one and the same.

(c) Poverty Line Basket (PLB) goods and services have been changed over time.

(d) New methodology to include expenditure on education and health is recommended.

Which of the above statements is/are correct as per the definition of poverty given by the S.D Tendulkar Committee?

1. (a) and (d)
2. (b)
3. (b) and (c)
4. (d)
5.

Answer 1

Correct Answer - Option 4 : (d)

The correct answer is (d).

• Tendulkar Committee (2009):
  • Consumption patterns were linked to the 1973-74 poverty line baskets (PLBs) of goods and services, whereas there were significant changes in the consumption patterns of the poor since that time, which were not reflected in the poverty estimates.
  • There were issues with the adjustment of prices for inflation, both spatially (across regions) and temporally (across time).
  • Earlier poverty lines assumed that health and education would be provided by the state and formulated poverty lines accordingly. Hence, statement (d) is correct.
  • Recommendations:
    • ​Shift from Calorie Consumption-based Poverty Estimation: It based its calculations on the consumption of the items like cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods.
    • Uniform Poverty line Basket: Unlike the Alagh committee (which relied on separate PLB for rural and urban areas), Tendulkar Committee computed new poverty lines for rural and urban areas of each state based on the uniform poverty line basket and found that all Indian poverty lines (2004-05) were ₹446.68 per capita per month in rural areas and ₹578.80 per capita per month in urban areas. Hence, statements (a) and (c) are not correct.
    • Private Expenditure: Incorporation of private expenditure on health and education while estimating poverty.
    • Price Adjustment Procedure: The Committee also recommended a new method of updating poverty lines, adjusting for changes in prices and patterns of consumption (to correct spatial and temporal issues with a price adjustment), using the consumption basket of people close to the poverty line.
    • Mixed Reference Period: The Committee recommended using Mixed Reference Period based estimates, as opposed to Uniform Reference Period based estimates that were used in earlier methods for estimating poverty.