Poverty level declining, says NSSO survey

from Money Control

The National Democratic Alliance (NDA) Government may have been voted out of office in 2004 as its `India Shining" campaign boomeranged, but official data now available shows that more people moved above the poverty line by 2004-05 compared with the earlier estimates of 1999-2000.

As per the provisional data of the 61st round of large sample survey on household consumer expenditure, the poverty ratio at the national level was about 22 per cent in 2004-05, down from the roughly comparable data for 1999-2000 which showed a poverty level of 26.1 per cent for that year.

Estimates of 22 per cent of the population living below the poverty line are based on the `Mixed Recall Period' under which consumer expenditure data for five non-food items — clothing, footwear, durable goods, education and institutional medical expenses — are collected from a 365-day recall period and the consumption data for the remaining items are collected from a 30-day recall period.

The survey on consumer expenditure is undertaken approximately every five years by an official body, the National Sample Survey Organisation (NSSO). Towards the fag end of his tenure as Finance Minister in 1995-96, Dr Manmohan Singh, had quoted the NSSO thin sample survey to declare that the poverty ratio had declined to around 26 per cent in 1993-94 under the Narasimha Rao Government. This led to an outcry from the Opposition parties, which accused the Congress Government of `manipulating' the data with an eye on the 1996 elections. Subsequently, the United Front Government decided to calculate poverty on the basis of both mixed recall period and the uniform recall period. The NDA Government that followed it confirmed the poverty ratio to be 26.1 per cent in 1999-2000 on the basis of the mixed recall period.

As opposed to the mixed recall period, the Uniform Recall Period survey asks consumers to recall their expenditure for all items over a 30-day period. As per the NSSO's 61st round survey for 2004-05, the poverty ratio using the uniform recall period was 27.8 per cent, significantly lower than 36 per cent estimated by this method in 1993-94. Though poverty levels under the two recall systems differ in their estimation, the declining trend of the percentage of people under the poverty line is established by the official data.