After facing severe criticism over its Rs 32 cap in urban areas for determining the poverty line, the Government finally decided to remove the condition on Monday. The decision came after Planning Commission Deputy Chairman Montek Singh Ahluwalia and Union Rural Development Minister Jairam Ramesh reached an agreement on the issue in a meeting in New Delhi.

While addressing a joint press conference Ramesh said, “We are clearly, categorically, and unequivocally saying that there is no link between the state wise poverty estimates and the selection of beneficiaries. A new expert committee will be set up so that no poor and deprived household is excluded." He added, “No caps will be externally imposed. The Planning Commission and the Rural Development Ministry will work out a new method so that no poor household is excluded."

Ramesh said that a socio- economic caste census of rural households will be completed by January. By then the Planning Commission and  the Ministry of Rural Development will set up an expert committee to consult with states, civil society organizations and other experts to decide the methodology "which ensures that no poor and deprived household is excluded from government benefits."

Clarifying that the Planning Commission had not fixed the Rs 32 cap to be categorised as a BPL, Ahluwalia said, "This is the lowest level. This is not the view of the Planning Commission. It was fixed in 1973. Clearly it is rock bottom level of existence. Planning Commission has not taken the view that benefits should be restricted to BPL."

Last month, the Planning Commission filed an affidavit in the Supreme Court that stated that anyone who spends more than Rs 32 a day in urban areas cannot be defined as poor. This provoked furious reactions from the Opposition, civil society and indeed the government over whether this would mean large sections of people would be excluded from government schemes, like those which provide subsidised food grains, for example.

Congress General Secretary Rahul Gandhi is believed to have intervened in the matter and has reportedly asked the Plan panel to do a rethink on its definition of poverty. Even Ramesh had earlier expressed disagreement over the Commission's formula for arriving at the poverty line of Rs 32 a day and Rs 26 a day in urban and rural areas respectively.

Besides, National Advisory Council (NAC) member Aruna Roy and Harsh Mander challenged the Rs 32 per person poverty definition of the Commission.

The number of poor entitled to BPL benefits, as per the affidavit, has been estimated at 40.74 crore, as against 37.2 crore estimated at the time of accepting the Tendulkar Committee report.