ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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On the New Poverty Estimates

After much delay, the Planning Commission has released the poverty estimates for 2004-05 based on the 61st round consumer expenditure survey of the National Sample Survey (NSS). But the press note of March 21 (‘Poverty Estimates for 2004-05’), by presenting two different sets of estimates – one comparable and the other, which, in the language of the note, is “roughly (but not strictly) comparable” – manages to confuse rather than inform us about the trends in poverty since the mid-1990s. A consequence is that the media has been full of the claim that the incidence of poverty (as measured by the headcount ratio) is now only 21.8 per cent. If this were so, then the poverty ratio in 2004-05, when compared to the level of 36 per cent in 1993-94, shows a decline of over 14 percentage points.

The press note also adds that “the percentage and number of poor in 2004-05 estimated from URP [uniform recall period] consumption distribution of NSS 61st Round of consumer expenditure data [which] are comparable with the poverty estimates of 1993-94” indicate that the poverty ratio in 2004-05 was “28.3 per cent in rural areas, 25.7 per cent in urban areas and 27.5 for the country as a whole”. That is, the decline in comparable estimates of poverty between 1993-94 and 2004-05 has been less than 9 percentage points. This is also noteworthy because the figure of 27.5 per cent for 2004-05 is higher than the Planning Commission’s estimate of the incidence of poverty in 1999-2000, which was 26 per cent.

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