Rise in poverty to strain social budget

Govt Must Put Lots Of Funds In Edu & Health, Says Tendulkar Panel Report

 

 

New Delhi: The Suresh Tendulkar committee report revising upwards the poverty estimates across the country may further strain government finances with many of the states already demanding special status to address the issue and an enhanced allocation under many of the pro-poor schemes.
    The committee, in its report submitted to the Planning Commission last week, had estimated that 37% of the country’s total population was under the poverty line, while the proportion of the poor was almost 42% in rural areas—sharp increases from the existing official poverty estimates of 27.5% for the whole of India and 28.3% for rural areas.
    More than half of the rural population of states like Orissa, Bihar, Madhya Pradesh, Chhatisgarh and Jharkhand are still living under abject poverty, not able to meet their basic necessities of food, health and education, according to the revised estimates of the expert group headed by former chairman of the Prime Minister’s Economic Advisory Council (PMEAC) Suresh Tendulkar.
    The new figures are not strictly comparable with the earlier estimates, because the Tendulkar committee has significantly changed the method of estimating poverty—from one notionally based on calorific intake to a more broad-based consumption basket that includes education and health.
    Nevertheless, the revelation that poverty is higher may force the government to increase funding for social and rural development schemes such as the National Rural Employment Guarantee Act, Indira Awas Yojana and the Pradhan Mantri Gram Sadak Yojana, say economists.
    Tendulkar himself told TOI that though this was not the mandate of the committee, as an economist he thinks the government should put a lot of money into education and health.“Allocation on various social sector schemes is independent of poverty estimation,” Tendulkar said, adding that his job was just to review the poverty situation in the country and hence cannot take a view on budgetary allocation.
    Expenditure on social services as a proportion of total budgetary expenditure of the Centre has increased from 19% in 2003-04 to 24% in 2008-09. Expenditure on education has increased from 9.5% of the total in 2003-04 to 10.8% in 2008-09, while that on health has increased from 4.3% in 2003-04 to 5.1% in 2008-09. The consensus now seems to be that the trend will not only have to continue, but to accelerate further.
    Not all agree that there is a link, though. Veteran economist D H Pai Panandiker concurred with Tendulkar’s viewpoint when he said a higher poverty estimate doesn’t mean higher allocation of funds for a particular state.
    He said many of the states such as Bihar, Orissa and MP always had a high percentage of people living under poverty line. “All previous finance commissions had addressed this concern while earmarking revenue share of states,” he said.
    Panandiker said Vijay Kelkar, who heads the 13th finance commission, is quite professional and he would certainly look at these factors while making provisions for states without political bias.
    Devendra Narain, a former member of the Central Board of Direct Taxes, who has also headed the project appraisal division in the Planning Commission, said it’s not just a matter of increased allocations. The government should rework its poverty related and pro-poor schemes, as all expenditure in the past has hardly served the purpose, he felt.