The government is likely to raise the income threshold to define the economically weaker section (EWS) to about Rs 6,000 a month from the current Rs 3,300 a month. This will increase EWS numbers by almost 40 per cent.
The EWS population benefits from government housing schemes and gets softer interest rates on housing loans from state-owned banks.
The move to hike the threshold is based on an internal report the Housing and Urban Poverty Alleviation Ministry undertook to review the income criteria of the EWS and Lower Income Group (LIG) households in urban India. The review has revealed that income levels of these two groups have more or less doubled in the last five years.
According to the report, for those under the LIG category, income levels will touch almost Rs 14,000 a month from Rs 3,301-Rs 7,300 at present. This will swell their numbers by about 20-25%. The new EWS and LIG income levels are based on the monthly per capita expenditure of an average Indian as per the National Sample Survey Organisation’s (NSSO) 55th round in 2004-05.
It is estimated that of a total urban population of 286 million, almost 81 million account for urban poor. EWS and LIG households together loosely constitute the urban poor.
“The current definition of EWS and LIG was outdated. It had artificially depressed demand in urban areas. The new definition will enable the government to identify beneficiaries for its social sector schemes,” said a senior ministry official.