From UPSC perspective, the following things are important :
Prelims level: Data related to inequality and poverty
Mains level: Measurement issues regarding poverty lines and consumption expenditure
Why in the News?
The National Sample Survey Organization’s and Household Consumption Expenditure Survey (2022-23) prompted researchers to estimate Poverty and Inequality trends, highlighting data comparability and measurement issues.
Present trends of Poverty and Inequality in Indian Society:
1. Poverty Declined:
- Poverty ratios declined from 29.5% in 2011-12 to 10% in 2022-23 (1.77% points per year) based on the Rangarajan Committee’s poverty lines.
- Poverty ratios declined from 21.9% in 2011-12 to 3% in 2022-23 (1.72% points per year) based on the Tendulkar Committee’s poverty lines. Earlier period estimates showed a decline from 37.2% in 2004-05 to 21.9% in 2011-12 (2.18 percentage points per year).
2. Inequality Declined :
- Subramanian’s estimates indicate the Gini coefficient declined from 0.278 to 0.269 for rural areas and from 0.358 to 0.318 for urban areas between 2011-12 and 2022-23.
- The Gini coefficient measures the inequality among the values of a frequency distribution, such as levels of income.
- Bansal et al show similar trends: Gini coefficient for rural areas declined from 0.284 to 0.266, and for urban areas from 0.363 to 0.315 over the same period. (significant decline in urban inequality compared to rural areas between 2011-12 and 2022-23)
Back2Basics:Lakdawala Committee (1993):
Tendulkar Committee (2009):
C. Rangarajan Committee (2014):
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Measurement issues regarding Poverty Lines and Consumption Expenditure:
- Shift Away from Calorie Norm-based Poverty Line: The Tendulkar Committee recognized the inadequacy of a calorie norm-based poverty line. Instead, the Tendulkar Committee indirectly utilized calorie norms by adopting the urban poverty line based on the Lakdawala Committee’s methodology, which included calorie norms.
- Need for new Consumption Basket: The Rangarajan Group emphasized the need for a new consumption basket that addresses both adequate nourishment and essential non-food items, alongside behaviorally determined non-food expenditure.
- Estimating this new poverty basket required a fresh approach rather than simply updating an old basket with new prices.
- Incomplete Capture of Public Expenditure: Despite efforts to impute values for public expenditure items, the imputation process captured only a fraction of the total public expenditure on subsidized or free items.
- Complexity in Poverty Measurement: There is no universally agreed-upon method for measuring poverty, leading to variability in estimates.
Constitutional provisions related to eliminating inequalities:
i. [Article 38 (2) ]: Obligation of the State ‘to endeavour to eliminate inequalities in status, facilities and opportunities’ amongst individuals and groups of people residing in different areas or engaged in different vocations.
ii. [Article 46]: Obligation of State ‘to promote with special care’ the educational and economic interests of ‘the weaker sections of the people’ (besides Scheduled Castes and Scheduled Tribes).
Conclusion: Given the inadequacy of calorie norm-based poverty lines, as recognized by the Tendulkar Committee, there is a need to adopt more effective and real-time approaches that will consider evolving consumption patterns.
Mains PYQ:
Q “The incidence and intensity of poverty are more important in determining poverty based on income alone”. In this context analyse the latest United Nations Multidimensional Poverty Index Report.(UPSC IAS/2020)
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