Modi govt wants to scrap UPA-era poverty line, move to an Aadhaar matrix

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The Narendra Modi government is set to scrap the UPA-era system of plotting a poverty line to separate the haves from the have-nots, replacing it with an Aadhaar-based mechanism of measurable deprivation indicators to design flexible welfare schemes for the poor, sources told HT.

A task force constituted by Prime Minister Narendra Modi on poverty elimination and headed by vice-chairman of government policy think tank NITI Aayog is likely to recommend this soon, they added.

There was consensus in the 14-member task group, set up in March, that fixing a poverty line for the country and each state based on per capita expenditure has no bearing on policy and the government should scrap the exercise undertaken once in five years, the sources said.

Setting a bar for poverty has always been a controversial exercise in India but successive governments continued to toe the line while estimating the number of India’s poor and deciding on social sector spending.

The UPA government was ridiculed for stating that a poor person can survive on Rs 33 a day in urban areas and on Rs 27 in rural parts.

Though the low poverty threshold helped the UPA assert that its policies helped 138 million people come out of destitution, it was forced to set up a committee under former RBI governor C Rangarajan to revise the computation formula.

The NDA government did not agree with the Rangarajan panel’s methodology that fixed an expenditure of Rs 47 for urban areas and Rs 32 for rural parts to determine poverty, and it set up the task force to prepare a road map for poverty elimination.

“Why do I want a poverty line…It does not help in policy formulation. It is an academic exercise which the institutions can continue to do,” said economist Bibek Debroy, a NITI Aayog member who is also part of the task force, terming this his personal view.

Debroy added that poverty has different dimensions such as access to healthcare facilities, education, housing, etc, which cannot be gauged through one number for a country of 1.2 billion.

Another member of the task force said a better approach was to have deprivation indicators for welfare services, such as electricity, health, education and home, which can eventually be linked to government social sector programmes.

“This mechanism is easier to measure and will bring in accountability in public spending,” he added.

With the new model, for instance, the government would be able to identify based on Aadhaar details of residents if Uttar Pradesh needs more pucca houses compared to other states and allocate funds accordingly as well as keep track of the expenditure.

The task force is likely to say that the census for people below the poverty line, done once in 10 years, should create a database of poor people across India and the government’s decision to bring all its schemes under the Aadhaar-based direct benefit transfer programme will determine the impact of its poverty alleviation measures.

“A majority of the beneficiaries of different government schemes now have bank accounts issued under Jan Dhan scheme and Aadhaar,” an official with the Unique Identification Authority of India said. By June this year, all beneficiaries will have both.

Once that is done, a roadmap to eliminate poverty, as stated by the Prime Minister, could be finalised.

That roadmap will be one of the key recommendations of the task force, which has met a few times and will submit its proposals to the government in June after NITI Aayog vice-chairman Arvind Panagariya returns from the United States.

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