Which of the following statements regarding poverty estimation in India is are correct 1 In 1977 the...........

Economic Affairs NCERT

Which of the following statements regarding poverty estimation in India is/are correct?

1. In 1977, the Planning Commission had set up the “Task Force on Projections of minimum Needs and Effective Consumption Demand” for determining a qualitative index of poverty.

2. task force under the chairmanship of Dr. Y.K Alagh in 1997 gave first working definition of poverty.

3. experts group under the chairmanship of prof. D.T. lakdawala in 1989 refined poverty estimates.

select the correct answer using the codes given below:

1 and 3

2 and 3

2 only

1 only

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Explanation:

The concept of the poverty line was first introduced by a working group of the Planning Commission in 1962 and subsequently expanded in 1979 by a task force.

Y.K. Alagh Commitee

Till 1979, the approach to estimate poverty was traditional i.e. lack of income. It was later decided to measure poverty precisely as starvation i.e. in terms of how much people eat. This approach was first of all adopted by the YK Alagh Committee’s recommendation in 1979 whereby, the people consuming less than 2100 calories in the urban areas or less than 2400 calories in the rural areas are poor. The logic behind the discrimination between rural and urban areas was that the rural people do more physical work. Moreover, an implicit assumption was that the states would take care of the health and education of the people. Thus, YK Alagh eventually defined the first poverty line in India.

Lakdawala Formula

Till as recently as 2011, the official poverty lines were based entirely on the recommendations of the Lakdawala Committee of 1993. This poverty line was set such that anyone above them would be able to afford 2400 and 2100 calories worth of consumption in rural and urban areas respectively in addition to clothing and shelter. These calorie consumptions were derived from YK Alagh committee only.

According to the Lakdawala Committee, a poor is one who cannot meet these average energy requirements. However, Lakdawala formula was different in the following respects in comparison to the previous models:

In the earlier estimates, both health and education were excluded because they were expected to be provided by the states.
This committee defined poverty line on the basis of household per capita consumption expenditure. The committee used CPI-IL (Consumer Price Index for Industrial Laborers) and CPI- AL (Consumer Price Index for Agricultural Laborers) for estimation of the poverty line.
The method of calculating poverty included first estimating the per capita household expenditure at which the average energy norm is met, and then, with that expenditure as the poverty line, defining as poor as all persons who live in households with per capita expenditures below the estimated value.

The fallout of the Lakdawala formula was that number of people below the poverty line got almost double. The number of people below the poverty line was 16 per cent of the population in 1993-94. Under the Lakdawala calculation, it became 36.3 per cent.