Identification of Poor: Preliminary Results from the Pilot Survey

1. Identification of Poor: Preliminary Results from the Pilot Survey

2. Options • Saxena committee has submitted its report to MORD • It suggests a process of automatic exclusion, automatic inclusion and finally scoring of remaining households on the basis of some indicators • It also suggests caps at district and block level along with universal entitlement for districts with more than 80% poverty

3. Saxena Committe • Exclusion Criteria: Possession of durables (four wheelers etc), Land, Income • Automatic Inclusion: Destitutes, PTG, Single women, Disabled, Homeless, Bonded • Scoring: Caste, land/Occupation, Literacy, Disablity, Old age • Using NSS 2004-05 data, only 8.8% households are automatically excluded and only 1.6% is automatically included

4. Need for a pilot • Despite all these suggestions and choices available, the past experience suggests that all these proposals be tested at the ground level. • MORD held extensive consultation with various experts as well as state government officials as well as central ministries, statistical agencies, planning commission • These were held in March 2010, April 2010 and then in May 2010.

5. The Pilot • It was felt that there should be an extensive pilot to test some of these issues • The idea was to look at issues of design, selection of criteria and also implementation. • An extensive pilot was undertaken by the ministry • It includes all the indicators that have been discussed either in the Saxena committee, Dreze proposal or through other secondary literature. It also includes any indicator that the state governments or central ministries have proposed.

6. Two Stage strategy: • The pilot involved a two stage process • First, a questionnaire based survey was undertaken • It was followed by a PRA exercise • Secondary data from NSSO on the selected villages will be made available.

7. Selection of Villages • 254 villages were selected for Pilot • All the states and the UT of Pondicherry was included in the pilot. • From each NSSO Regions 4 districts (2 richest and 2 poorest) were selected • From each district, one village from the list of villages included in NSSO 66th round (sub-round 1 and 2) were selected. • In the selected villages all the households as well as the homeless, destitute and beggars were included in the survey.

8. Pilot Implementation • The pilot was conducted with the active collaboration of state RD officials. • In each state technical institutions of repute were also involved. • Each state was asked to appoint a senior official as nodal officer, a supervisor for each district. • Training involved a cascading model with training of nodal officers, supervisors and master trainers at NIRD. • This was followed by training at state level for enumerators and village supervisors

9. PRA • The PRA part of pilot was conducted 3-4 weeks after the survey was complete. • This was done by specialized institutions with experience in conducting PRA. • A common methodology was arrived at after consultation with experts and the same was followed in all villages.

10. Status • We have usable data available with us for 161 villages. • The total number of households which can have been used in the analysis is 43018. • The analysis is based on limited set of observations. Does not include all states and in some cases, not all villages of the states have been incorporated. • States which are not included are Chhatisgarh, Goa, Pondicherry, J&K and Manipur

11. What data we have

12. Analytical Strategy • First, we arrive at a definitive ranking of households. • We used multiple rankings to cross-check and validate rankings of households. • We are using a combination of wealth rankings, PRA rankings, Investigators rankings and rich poor count .

13. Ranking Households We are using multiple criteria to arrive at a final ranking of households. We have taken extreme care to check each of these rankings against observed characteristics of households such as possession of durables, caste, education and so on.

14. Ranking 1: Using National Distribution

15. Ranking 2: Tendulkar poverty ratio (+10%) in each state

16. Ranking Check: How do our Rankings perform against some indicators

17. Automatic Exclusion • Saxena Exclusion covers 8.3% of national population • We have refined some of the exclusion indicators of Saxena Committee and added some more indicators. • Our exclusion indicators include: • Four wheels: Includes all kinds of motorised transport as well as tractors • KCC (50000+): Kisan Credit Card with credit limit of 50000 and above • Government employee: gazetted & non-gazetted employees of central and state governments but excluding incentive based workers. Does not include Anganwadi workers, ASHA and other honorarium based workers.

18. Exclusion indicators: Contd • Enterprises registered with government: Any non agricultural enterprise registered with state or central government • Salaried job above 10000: Private sector salaried employees with more than 10000 per month income. • Tax payer: households who pay any kind of income or professional tax • Pucca house (3+ rooms): Should have 3 or more rooms with all rooms pucca (walls as well as roof). • Refrigerator • Landline phone • 2.5 acres of irrigated equivalent land (7.5 acres of unirrigated land) with at least one irrigation equipment such as diesel/electric borewell/tubewell • Motorised two wheeler • Coverage goes up to 28% nationally.

19. Automatic Exclusion: Coverage Across States and All-India

20. 1% of those excluded are from poorest, 7% from the poor group. 92% are from well-off households

21. 88% of the richest group are excluded by our indicators. 1.5% from poorest group and 6% from the poor group.

22. Strength of Individual Exclusion indicators

23. Automatic Inclusion: Saxena inclusion indicators include 14.9% of households State wise coverage of Saxena inclusion: Saxena inclusion includes higher than national average in Punjab, Haryana, Kerala, TN. States with less than national coverage are Bihar, MP, Assam, Rajasthan and UP

24. Almost similar percentage from the 2nd, 3rd and 4th group are included by Saxena indicators.

25. Only 58% of those included by Saxena Inclusion are from poor groups. 72% of those included by Dreze inclusion are from the poor group

26. Female headed households, bonded labour and disabled persons perform poorly across household categories.

27. Alternative Inclusion Criteria • Following Deprivation Indicators are used: • All kuchha (1 room): household living in single room all kuchha house • No literate adult (25+): No literate member among household members above 25 years • Landless (no regular employment): no land other than homestead land. Should not have any person in the household with regular salaried jobs. • No homestead: homeless and those how do not own even homestead land • Female head (no adult male): female headed households but should not have any male adult member • Destitute: households dependent on begging/alms • Minor head: households headed by a minor. Should not have any adult member • Social Group: Scheduled Castes/ Scheduled Tribes/Muslim

28. Inclusion rule: • Any household which satisfies any two deprivations would be included. • However, for SC/ST/Muslim, they need to satisfy only one deprivation criteria • For the automatic inclusion categories also included in NAC draft (but refined as above), they may be considered for automatic inclusion even if they do not satisfy any other deprivation • Automatic inclusion criteria should be applied after mandatory exclusion criteria. • Of the total households in the pilot, 40% are included using this method. After including NAC automatic inclusion criteria with 0 deprivation, it goes to 43%

29. Priority Scheme: • The 40% automatically included can be further prioritized by increasing the number of deprivations. • Inclusion 2: For example, if the number of deprivations is increased to at least 3 deprivations, the percentage of households covered would be 10% • Inclusion 3: However, relaxing the number of deprivations in the above formula for SC/ST and Muslim to only 2 deprivations would include 20% of the households.

30. Coverage of Various Inclusion measures Inclusion 1: At least 2 deprivations (1 deprivation for SC/ST/Muslim) Inclusion 2: At least 3 deprivations (2 deprivation for SC/ST/Muslim) Inclusion 3; At least 3 deprivations

31. 8% of those included from the non-poor group in Inclusion3, 14.5% in inclusion 2 and 21% in inclusion 1.

32. As the coverage of automatic inclusion increases, the percentage of households from the richer groups also increases

33. On the whole the inclusion indicators are capturing more from poorer states and less from richer states

34. Housing, literacy (adults), landless (no regular) increase inclusion coverage but some spillover to non-poor households. SC/ST also increases coverage but differently across states.

35. Automatic exclusion covers 28%. Automatic inclusions covers between 10% to 40%. But they still leave some households which can not be classified correctly using indicators. One option is to use the scoring mechanism suggested in Saxena Committe

36. Bunching around scores make it difficult to apply strict cut-offs. The problem is severe in many states

37. Inclusion and exclusion errors vary between 39% and 46%. Overall inclusion an exclusion errors including those automatically included are between 25 to 33%.

38. Way Forward • Automatic Exclusion can be reasonably expanded to cover 28% of the population with minimal errors. • Automatic inclusion can be 40% with acceptable errors limits. Can be prioritised within this group for different programmes • Scoring comes with problems of bunching and large exclusion/inclusion errors • Only Credible way to divide the population is to divide them in three groups. Automatically Excluded, automatically included and the rest.