Economic Concept- C Rangarajan committee on Poverty – A Brief insight

Recently C Rangarajan committee was in news and is an important topic in view of upcoming examinations. So let’s understand what is this committee all about, it’s recommendations and it’s effects.
C Rangarajan committee

Who is he?
Mr. Rangarajan is a noted economist,
and resigned recently from the post of the chairman of Prime minister’s
economic advisory council (PMEAC).



Why the committee was constituted-
The Planning Commission in May 2012 had
constituted the expert group to review the Tendulkar Committee methodology for
estimating poverty, following uproar over the number of poor in the country.

What changes the committee proposed –
Rangarajan committee proposed the
changes in current benchmarks for the categorisation of poor’s in India ,the
current standards which were set by the recommendations of the Tendulkar committee were –

  • Expenditure of Rs 816 per person per month (Rs 27.2 per person per day) in rural
    areas.
  • Expenditure of Rs 1000 per person per month (Rs 33.3 per person per day) in urban
    areas.
  • Total numbers of poor were 269.8 million (21.9% of the total
    population)
    according to Tendulkar committee report.




The changes proposed by the
Rangarajan panels are as follows-

  • Expenditure of Rs 972 per person per month(Rs 32.4 per person per month) in rural
    areas.
  • Expenditure of Rs 1407 per person per month(Rs 46.9 
    per person per month)
    in urban areas.
  • Total number of poor will rise to 363 million (29.6% of total population)
    according to C. Rangarajan panel recommendations





What will be the effects of the Rangarajan committee proposals on the
economy?
  • More people will come under the ambit
    of below poverty line standards.
  • This will increase the number of
    beneficiaries who can claim the benefits given to the BPL families.
  • The step will create more burden on
    their fiscal budget to help BPL families under the different PDS (public
    distribution schemes), Rashtriya Swastha Bima Yojana, Swarnajayanti Gram
    Swarojgar Yojna etc.
  • More deserving people who were out of
    the reckoning due to previous benchmarks would come under the benefits.



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