Tuesday, March 20, 2012

PLANNING COMMISSION PANEL'S UNREALISTIC CUT-OFF DEPRIVES POOR OF WELFARE BENEFITS

Plan panel's unrealistic cut-off deprives poor of welfare benefits 




NEW DELHI: What is the poverty line the government really follows when it comes to its schemes for the poor? When it comes to its pension schemes for the old, widows and disabled poor, it's a dismal Rs 11 per day per person in rural India and Rs 17 per day per person in towns and not even the Rs 22 and Rs 28 that the Planning Commission has now recommended.

The consequence is that a large number of those who should actually be eligible for various schemes get left out. Take the case of old age pension (the Indira Gandhi National Old Age Pension Scheme or IGNOAPS). At India's current population levels, about 2.28 crore people over the age of 60 ought to be entitled to benefit from the scheme. In reality, only 1.46 crore get pension from the Centre meaning that 81 lakh old, poor people are left to fend for themselves. Remember that even the 2.28 crore estimate is based on the abysmally low poverty line figures of the Planning Commission.

Under the scheme, elderly people below the poverty line are paid Rs 200 per month as pension. But the restrictions put by the old poverty line has ensured that if any poor over the age of 60 spends more than Rs 11 in rural India per day or Rs 17 per day in towns, then he/she is not eligible for the pension scheme as far as the central government is concerned.

The states undertake detailed surveys to identify the poor based on a list of parameters. Once identified, these people are handed over what are called BPL (Below Poverty Line) cards. Ideally, all those who have been identified as BPL should then be provided benefits under schemes meant for the poor. But here lies the catch. The Planning Commission steps in. It undertakes a statistical exercise sitting in Delhi to calculate the percentage of people it considers poor in each state. It decides a certain minimum monthly expenditure per person as a cut-off. Anyone spending above this, it decides, cannot be declared poor.

It then tells the state government that regardless of the number of poor it has identified, it will only give central funds for the percentage it considers poor based on its statistics. If the state governments want to extend the benefit to those beyond the plan panel's cut-off, they can do so out of their own pocket. This is exactly what has happened with the pension schemes.

The 9th report of the Supreme Court food commissioners said, "The government of India uses the poverty ratio of 28% (based on the Rs 11 and Rs 17 poverty line), instead of the earlier 36%, in making the allocations under this (old age pension) scheme." This is despite the fact that the 36% cut-off (based on the 2004-05 figures) has been accepted for distributing foodgrains under PDS based on Supreme Court orders.

Based on these old and extremely low statistical poverty lines, the SC commissioners noted that in 2006, the scheme was extended only to 1.28 crore people. If the government had updated the poverty percentage to 36%, the Centre would have been required to provide assistance for 1.86 crore people - thus only 68.7% of the poor and old who were eligible actually got central support.

The old age pension scheme is just one of the numerous schemes where the plan panel's poverty line is used as criteria to decide the number of beneficiaries the central government will support in the states regardless of the poor actually identified. This is why the poverty line matters and is not just a debating point for economists or a mere statistical exercise.
--
V.RAGHAVENDRA RAO,
20, DESCANSO, APRT 1321,
SAN  JOSE,
CALIFORNIA - 95134. USA.

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