The Rangarajan Committee methodology for determining the poverty line incorporated which of the following?
1. A food component
2. A normative level of expenditure for essential non-food items
3. A behaviourally determined expenditure for other non-food items
Select the answer using the code given below:

Correct option is C

The correct answer is (c) 1, 2 and 3.
The Rangarajan Committee methodology, which was established to revise the poverty line in India, incorporated a comprehensive approach to determine the poverty line by including the following components:
A food component: This component is included. The Rangarajan Committee considered the caloric intake required for both rural and urban populations and translated it into a monetary value based on the prevailing prices of food items. It ensured that the minimum food requirement was met.
A normative level of expenditure for essential non-food items: This is also included. The committee incorporated a normative level of expenditure to account for essential non-food items like clothing, housing, education, and transportation. This component was considered necessary to determine a realistic and comprehensive poverty threshold beyond just food expenditure.
A behaviorally determined expenditure for other non-food items: This is also included. The Rangarajan Committee took into account a behaviorally determined expenditure for other non-food items, reflecting the actual consumption patterns of the population. This helped in providing a more accurate representation of the cost of living and ensured the poverty line was in line with the behavioral trends of consumption.
Information Booster:
The Rangarajan Committee was headed by Dr. C. Rangarajan, former Governor of the Reserve Bank of India (RBI).
Formed to address various economic issues, including poverty estimation, monetary policy framework, and petroleum pricing.
Rangarajan Committee on Poverty (2014) redefined the poverty line using a new methodology.
The poverty line was set at ₹972 per month in rural areas and ₹1,407 per month in urban areas (2011-12 data).
Under the new poverty line, 29.5% of the population was estimated to be living below the poverty line in 2011-12.
Rangarajan Committee on Pricing of Petroleum Products (2006) recommended a shift towards market-determined pricing of petroleum products.
Suggested dismantling the Administered Price Mechanism (APM) for petroleum and linking prices to international crude oil prices.
The poverty estimation method was criticized for setting thresholds that were too low to reflect the true cost of living in India.
Dr. Rangarajan played a key role in laying the foundation for inflation targeting as part of the Reserve Bank of India's monetary policy.
He has been a key economic advisor to several Indian governments, chairing various high-level committees.