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Difficulty: HardPoverty Estimation, Inequality Metrics, and Inclusive Growth Strategies

Consider the following statements regarding the methodology recommended by the Expert Group under Dr. C. Rangarajan (2014) for poverty estimation in India:

1. It recommended adopting the Modified Mixed Reference Period (MMRP) consumption expenditure data for poverty line calculation.
2. It derived separate poverty line baskets for rural and urban areas based on independent normative levels of nutrition (calories, protein, and fat) alongside essential non-food components.
3. Its methodology resulted in a significantly lower overall estimate of the number of poor in India for 2011–12 compared to the Suresh Tendulkar Committee's estimates for the same reference year.

Which of the statements given above are correct?

  1. 1 and 2 onlyAnswer
  2. B
    2 and 3 only
  3. C
    1 and 3 only
  4. D
    1, 2, and 3

Answer

1 and 2 only
The option stating '1 and 2 only' is correct because the Rangarajan Expert Group (2014) specifically introduced the Modified Mixed Reference Period (MMRP) to improve consumer expenditure capture and defined separate normative nutritional and non-food requirements for rural and urban sectors independently. Statement 3 is incorrect because the Rangarajan methodology resulted in a higher poverty count (363 million / 29.5%) than the Suresh Tendulkar methodology (269.8 million / 21.9%) for 2011–12.

Step-by-Step Solution

1
Analyze Statement 1 regarding reference period choice
Statement 1 is correct. The Rangarajan Committee (2014) recommended using the Modified Mixed Reference Period (MMRP), which captures recall for fast-moving items like food over 7 days, 30 days for frequent items, and 365 days for low-frequency items.
MMRP accounts for recalled consumption more accurately than standard 30-day Uniform Reference Period (URP) or older Mixed Reference Period (MRP).
2
Analyze Statement 2 regarding rural and urban poverty line basket derivation
Statement 2 is correct. Unlike the Tendulkar Committee, which anchored the urban basket and applied it to rural areas via price indices, Rangarajan set independent normative standards for rural (2155 kcal, 48g protein, 28g fat) and urban (2090 kcal, 50g protein, 26g fat) populations plus non-food essentials.
This restored separate normative nutritional targets for rural and urban sectors.
3
Analyze Statement 3 regarding poverty headcount estimates comparison
Statement 3 is incorrect. Rangarajan's methodology estimated higher poverty levels for 2011–12 (29.5% of population or 363 million poor) compared to Tendulkar's estimate of 21.9% (269.8 million poor).
Higher daily per capita expenditure cut-offs (₹32 rural / ₹47 urban for Rangarajan vs ₹27 rural / ₹33 urban for Tendulkar) increased the estimated poor population.

Key Concept

Rangarajan Committee Poverty Estimation Methodology
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Topics

Poverty Estimation, Inequality Metrics, and Inclusive Growth Strategies