Poverty line has no acceptability, concedes Montek

On a day that the Government decided to announce the formation of an expert group to reassess Tendulkar figures, the man at the centre of the storm, Montek Singh Ahluwalia conceded that the Tendulkar poverty line did not have general acceptability. MOS, Planning Commission Ashwini Kumar said since government has decided to re-visit Tendulkar estimates, it is implicit that it was inadequate.

Rupashree Nanda caught up with Deputy Chairman Planning Commission Montek Singh Ahluwalia.

Rupashree Nanda: Ashwini Kumar has announced that a new committee will be formed and this decision was taken in December. In October last year, in a joint press conference with the ministry of rural development you had announced the formation of a technical group. Will there be two committees now, or, one to look at the methodology of determining poverty estimates?

Montek Singh Ahluwalia: No no...there is only one committee. When Jairam and I had held a press conference, we had said that the SECC (Socio Economic Caste Census) work is going on in rural areas and in urban areas. How to link that work to concepts of poverty would be relegated to a special committee. Because the census only gives you information. Somebody has to look at the census and decide how we decide where the cut off lines are. One of the inputs in that would be what is happening in the historical evolution of poverty lines. We have been in discussion. The PM had also asked us that you better set up this group. We haven't yet received the work of the Hashim Committee. They are making some recommendations. Hopefully we will have it by the end of March. As soon as we have it and you set up this group and that group will also take a holistic look at the whole thing. Moving ahead in the twelfth plan we will be in a position to judge how to proceed further.

Rupashree Nanda: Sir, I just want to be it doubly clear. There is only one technical group which was announced by Jairam and you in October. There will be no two groups to find a new method for measuring poverty?

Montek Singh Ahluwalia: Absolutely! This is one group. When you say the same, we had in mind there would be a need to look at the raw material and then to see how do we get an entitlement definition and how does it relate to the historical poverty line etc. we are now in the process of setting up that group. We have not yet defined the terms of reference. We will have terms of reference. Set up a group and get recommendations on that group and then move forward.

Rupashree Nanda: What is the deadline? And who would be members of that?

Montek Singh Ahluwalia: Well, we are getting the Hashim Committee report within this month. As soon as we know what the report is, then internally we can look at what the Saxena Committee said, what the Hashim Committee said and then decide on the composition of the terms of reference ... within a month or so, we will have that.

Rupashree Nanda: When the government has decided to revisit the Tendulkar estimates, isn’t that an admission of the inadequacy of the Tendulkar line in the first place? That it was neither fair nor adequate to begin with?

Montek Singh Ahluwalia: That is the report of a technical committee and it is very clear from the discussions that many people feel that that committee needs to be re visited. We have said that we do not hesitate to revisit this but it must be revisited on the basis of expert views. We will set up a group to do so. I do not want to pre judge what the group says.

Rupashree Nanda: Are we going to have a new poverty line then?

Montek Singh Ahluwalia: That is something we want to get from the group. One thing is very clear. We made it very plain to many people that the Tendulkar poverty line will not be used to determine entitlements. We are going to set up this new group. Now an issue arises that if the new group comes up with recommendations which suggest, let us say an entitlement beneficiary level that is a little bit higher than what turn out a suggestion that an entitlement beneficiary level that is a little bit higher than what comes out of the comes out of the Tendulkar group. I think we have to decide whether we simply adjust the Tendulkar line to reflect this new reality and then use that poverty line going forward and say well Tendulkar poverty line is in operation for now. For the 12th five year plan we will use a new line. But, it is very important also that when we do that we have to go back on the new line also. Otherwise, over time you will not be able to know what is happening to poverty.

Rupashree Nanda: There has been considerable outrage inside parliament and outside over the figures that defy common sense really, even if they make sense in some other way. Do you ever feel guilty at setting such low per capita expenditure... after all 28 and 22 is really, really low.

Montek Singh Ahluwalia: Let me put it this way ... we did not set this level. This is a level that emerged from the recommendation of a very level committee.

Rupashree Nanda: You could have overruled them sir...even at that point there were lots of noises?

Montek Singh Ahluwalia: I have discussed this number of times before ... any figure, if you convert it per person per day will look lower. If you look at it as a family budget, it does not look that low. Tendulkar's line was meant to be a level of bare subsistence, not a level of comfort. Family income in 2009 - 10 of approximately 4500 rupees a month for a family of five ... now say if a family of five has one working member and is employed full time at minimum wage ... that income would be lower than 4500 rupees.

Rupashree Nanda: Why not make the minimum wage as the poverty line?

Montek Singh Ahluwalia: Very good question. If you make the minimum wage a poverty line, then it has to be a poverty line for a family. You cannot be saying that there is a minimum wage for my children, and for me and for my wife. By the way, what you have said is very reasonable. If we decide that we think that a minimum wage corresponds to the social judgment of what is a minimum level of living and, then you say what would be an appropriate family budget for a family who has one worker working full time, then that is a very reasonable suggestion. But you will find when you do that you will not get the answer you think. Because in 2009 - 2010, the minimum wage in rural areas is less than 100 rupees a day...

Rupashree Nanda: Poverty line has a massive impact on million of people. Do you sometimes feel guilty?

Montek Singh Ahluwalia: We have never said that benefits should be limited to those below the poverty line. Several months ago, we made it very clear that recognizing that those above the poverty line also need some assistance we said that we are de - linking benefits from the poverty line. In the food sec bill for example, we have said that the priority category is 46 per cent of the population where as the poverty line would say 30 per cent. These constructs are useful f they have a general acceptability. It is quite clear that many people were quite unhappy with the Tendulkar poverty line. And so we are getting another group to look at it. Let’s see what comes out. I don't want to pre judge.

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