Report of the Expert Group on the Criterion for Allocation of Funds under Major Rural Poverty Alleviation Programmes, as of January 2004

Abstract

The Expert Group Report on the Allocation of Funds under Major Rural Poverty Alleviation Programmes reviews methodologies for distributing funds to alleviate rural poverty in India. Historically, allocations relied on 1987-88 poverty ratios, but adjustments were made in 1998-99 using 1993-94 Expert Group estimates that introduced state-specific poverty lines to reflect local consumption patterns and living costs. The report critiques current estimates for methodological inconsistencies, hybrid recall periods, reliance on universal caloric norms, and challenges in comparing longitudinal data. To improve fund allocation, the report recommends revising caloric norms, constructing accurate state-specific poverty lines, utilizing detailed NSSO unit record data, incorporating poverty gap measures to account for severity, and weighting non-poverty indicators such as education and health. Until improved methodologies are operational, adjusted interim allocations are suggested. Overall, the report emphasizes refining poverty measurement frameworks to ensure equitable, effective distribution of rural development funds.