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2-min read

Limited Data on Household Income Puts Question Marks Over Congress Poll Pledge to Poor

The Congress has revealed the broad contours of its plan, but how it plans to identify families as beneficiaries remains a puzzle.

Rounak Kumar Gunjan | News18.com@Rounak_T

Updated:March 26, 2019, 7:42 PM IST
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Limited Data on Household Income Puts Question Marks Over Congress Poll Pledge to Poor
Congress chief Rahul Gandhi asserted that the scheme will be the final assault on poverty. (Photo: INC/Twitter)
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New Delhi: With less than a month to go for general elections, Congress president Rahul Gandhi unveiled his party’s biggest poll gambit on Monday by promising minimum income guarantee to the poorest 20 percent in India. However, how the party plans to identify families as beneficiaries still remains a puzzle.

The Congress has revealed the contours of the plan it promises to implement for India’s poorest if voted back to power in the upcoming Lok Sabha elections. According to the press brief on Monday, the Congress is offering Rs 72,000 per year to 5 crore poorest households.

Party leaders had earlier indicated that the scheme would be progressive in nature — that is, 20 percent of India’s poorest households would not receive a flat payment but would receive a specifically-tailored amount that would ensure they earn Rs 12,000 a month. So if one particular rural household made Rs 8,000 a month, it would receive a ‘top-up’ payment of Rs 4,000.

However, the plan read out on Monday had certain changes. Party data analytics head Praveen Chakravarty, in an interview to Business Standard, said that their research shows that almost every Indian household earns at least Rs 5,000 – Rs 6,000 a month as a collective family.

Therefore, the current details reveal that NYAY will make a flat payment of Rs 6,000 per month to all these families to make up for that gap. The money will be paid out in the form of direct bank transfers.

However, the data that can be used to identify household incomes are limited, or in most cases, too old to be used.

There are two broad official estimates of poverty: the Suresh Tendulkar poverty line, in 2009, which was criticised for being set too low at Rs 4,050 per household per month in rural areas and Rs 4,950 in urban areas.

It was reworked by the Rangarajan Committee in 2012. Neither poverty line, however, is now used for anti-poverty programmes. Rather, the government uses the Socio-Economic Caste Census (SECC).

The number of households targeted by the Congress closely approximates that of the Rangarajan poverty estimates. According to the Rangarajan panel, about 29.5 percent of Indian population (or 269 million people) are below the poverty line, which was revised to Rs 4,800 a month for a household of five in rural areas and Rs 7,050 a month for a household of five in urban areas.

“Household income data at the national level doesn’t exist. Such data do exist at the state level compiled by state statistical bureaus, which then have to be cleaned up by Central Statistics Office,” said economist Amitabh Kundu. People tend to underreport their incomes, he said.

The SECC data also has its drawbacks. Firstly, the last SECC survey was conducted in 2011, which makes it almost eight years old.

SECC was also initially used as a basis for identifying beneficiaries for PM Ujjwala scheme by the Bharatiya Janata Party (BJP). The Centre had to change their identifying mechanism because of increasing complaints of people either being left out in the survey or new entrants falling under the margin in the years that passed by.

The general consensus in India gravitates towards based on the World Bank’s poverty line benchmarks, which translated into Rs 893 per month, as of 2011-12. Updated calculations of the poverty line place it at Rs 1,311 per month as of 2017-18. Therefore, if Congress claims to alleviate all families out of poverty, (taking Rs 1,311 per month per person as the threshold income) an annual transfer of at least Rs 15,732 per person needs to be made. This is far from the Congress’s calculations.
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