Dilemmas Of The Tendulkar Report

Posted in public policy, ramblings, society by Gautam on December 19, 2009

A little earlier this year, the Rural Development Ministry set up the Saxena Committee to look into the poverty situation in the country ahead of the Tendulkar Committee Report. This committee, headed by Mr. N.C.Saxena reached the conclusion that poverty in the country stood at an astounding 50% as opposed to the 28.3% for the year 2004-05. Poverty in the country thus far was measured as per an income necessary to enable a person to consume 2400-2100 KCal (Rural-Urban). As such, the necessary income level that marked the poverty line was Rs.365 and Rs.539 for the Rural-Urban categories.

The observation of the Saxena Committee that formed the basis of their conclusions was that the current poverty line could suffice calorie intakes on only about 1800 KCal and thus was erroneous. They proposed that the poverty line be set Rs.500-1000 (Rural-Urban). This apparently hit the Planning Commission way too hard than initially expected. Damage control had to be done. So the first move was that the reports conclusions were branded arbitrary; expectedly then, the exercise of setting the poverty line was termed to be ‘beyond the powers of the committee’ and only the conclusions of the committee set up by the Central Government viz. the Tendulkar Committee’s conclusions would be accepted.

Come December and the storm refused to subside. My previous post, however small, set the contours of what line I would like to think along in considering findings of the Tendulkar Committee. My concerns are threefold:

1.  The financial implications of the revised poverty schedule in the country.

2.  Fate of various poverty alleviation programs as a consequence of the revised report.

3.  About how the government would need to address this situation by making appropriate systematic changes.

A revised minimum wage report by the government this month set the benchmark on minimum wages at Rs.100 per day. Keep this in mind while looking at the 40 Crore people below the poverty line that would like to avail of the benefits of our flagship poverty and employment programs like the NREGA and the JN Rural Development program. Each family under the former is promised 100 days of work a year; this simple calculation would alone account for government expenditure of upwards of Rs. 10 Lakh Crore.

So the question is what are we really doing by raising the bar on poverty statistics. Not only are we severely burdening the exchequer by bringing more people under the poverty fold, we get to tell the world we are a lot poorer than previously thought.  40 crore is a lot of people.

Our strength as a developing nation leis in correctly identifying the exact plight of the poor in our country.  The statistics on poverty in the country cannot be fabricated to be commensurate with our financial capabilities. We are a country with a grossly disparaging income divide; lot of poor people. Therefore whether we like it or not, the solution is in correctly identifying the short comings in our economy and addressing them appropriately. As someone rightly remarked, this is not a 100 mtr sprint but a marathon; and we need to keep our eye on the long-term goals. When the Delhi administration sought to make the city beggar free by the Commonwealth games 2010, if what they actually meant was packing off all the poor and sending them some place else, this is exactly what we should be guarding against.

Now the flip side of such a report will be that it dissolves the benchmark of assessing the success of the poverty alleviation programs being conducted by the government thus far. So if the benefits of a program meant for the previous statistics are judged on the basis of the current report, it doesn’t take a rocket scientist to figure why the centre is hesitating to accept the report. I haven’t been able to get a copy of the report; but what the Centre should ideally do is plan the transition of development from the older statistics to the new one in a phased manner and not mix the two.  Assessing the progress of a flagship program like the NREGA is a very delicate task and it would prove counter productive to readily accept the findings of the Tendulkar Report. However, this is only for the sake of carrying the program forward.

At a normative level, the Tendulkar Report is the true indicator of our country’s poverty statistics. While its consequences shouldn’t act retrospectively, I doubt it as prudent to disregard the conclusions towards understanding how to tackle the future of the country’s poor in the newer areas of Hunger and Education, bills regarding which are pending in the legislatures at the moment.


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