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Poverty Measurement In India, Methods, Approach, Details

Poverty Measurement in India

Poverty Measurement in India, like in many other countries, is a complex and multifaceted process that takes into account various economic, social, and demographic factors. India has a long history of poverty measurement and has evolved its methodologies over time to provide a more accurate picture of poverty in the country. This comprehensive process plays a pivotal role in shaping government policies and social welfare programs aimed at alleviating poverty and improving the lives of those affected by it. In this article, we will cover the methods of Poverty Measurement in India in detail.

Methods of Measurement of Poverty

The measurement of poverty is a way to determine how many people in a country or a region are living in poverty, which means they do not have enough income or resources to meet their basic needs for a decent standard of living. There are several methods to measure poverty:

Income-Based Measurement

Income-based measurement is the most common way to measure poverty. It looks at how much money people or households earn. If their income falls below a certain threshold, they are considered to be in poverty. The threshold can vary by country and region and is adjusted for factors like family size. For example, in the United States, the poverty threshold for a family of four might be around $25,000 per year.

Consumption-Based Measurement

Instead of just looking at income, the Consumption-Based Measurement method considers what people consume or spend on goods and services. It’s based on the idea that what people actually use is a better measure of their well-being than just their income.

Multidimensional Poverty Index (MPI)

The Multidimensional Poverty Index (MPI) approach goes beyond just income and looks at various aspects of people’s lives, such as access to education, healthcare, clean water, and housing. It measures how deprived people are in these different dimensions and combines them to get an overall poverty score.

Other Important Articles
Poverty in India Poverty Alleviation Programmes in India
NITI Aayog’s Report on Multidimensional Poverty Global Multidimensional Poverty Index

Poverty Line

The poverty line is a specific income or consumption level used as a threshold to determine poverty. If a person’s income or consumption falls below this line, they are considered poor. The poverty line can vary from place to place.

Relative Poverty

Relative Poverty concept looks at how people’s income or resources compare to the rest of society. If someone’s income is significantly lower than the average income in their society, they may be considered in relative poverty.

Global Poverty Line

Global Poverty Line is an international standard used to measure extreme poverty worldwide. The World Bank, for example, defines extreme poverty as living on less than $1.90 per day.

Measuring poverty is important because it helps governments and organizations identify who needs assistance, target resources effectively, and track progress in reducing poverty. However, it’s worth noting that no single measure captures the full complexity of poverty, and different methods may yield different results. That’s why it is common to use multiple measures and indicators to get a comprehensive understanding of poverty in a given area.

Poverty Estimation in India Approach

Poverty estimation in India is a critical process aimed at identifying and assisting individuals and households who lack the resources to meet their basic needs. It revolves around determining specific income or consumption levels that signify poverty.

Poverty Estimation in India Approach
Income or Consumption-Based Approach India primarily uses an income or consumption-based approach to estimate poverty. Essentially, if an individual’s income or their spending on essential items like food, housing, and education falls below a certain predetermined threshold, they are classified as living in poverty.
Poverty Line Calculation The calculation of India’s poverty line is based on data collected by the National Sample Survey Office (NSSO), a government agency operating under the Ministry of Statistics and Programme Implementation. The NSSO conducts surveys to understand the spending patterns of the population, which form the basis for determining the poverty threshold.
Transition from Planning Commission to NITI Aayog The responsibility for poverty line calculation shifted from the erstwhile Planning Commission to NITI Aayog, a government policy think tank. NITI Aayog calculates the poverty threshold using the data collected by NSSO.
Consumption-Based Approach vs. Income-Based Approach India predominantly employs a consumption-based approach to poverty estimation. This approach is favoured because the income levels of many individuals, such as daily wage labourers, can be highly irregular. In contrast, consumption patterns tend to be more stable.
Data Collection Methods To compute the poverty line, surveys like NSSO collect data on what households have consumed over a specific period, typically 30 days. This data is then used to create a representation of general consumption patterns.
Importance of Poverty Estimation Poverty estimation is not merely an academic exercise; it plays a pivotal role in monitoring the impact of government policies, particularly social welfare programs that aim to alleviate poverty.
Below Poverty Line (BPL) Census To identify impoverished households, the Ministry of Rural Development conducts the Below Poverty Line (BPL) Census in collaboration with various states.
Constitutional Requirement Estimating poverty is constitutionally mandated as a step towards eradicating poverty, thus laying the foundation for a just and equitable society.
Challenges in Estimation Several challenges accompany poverty estimation, including regional disparities, evolving consumption patterns, and disagreements among states over the poverty line definition.
International Comparison On the international stage, organizations like the World Bank have their own poverty lines, facilitating cross-country poverty level comparisons. For instance, living on less than $1.90 per day is considered extreme poverty by the World Bank.

Many experts advocate for recalibrating India’s poverty line to align with the changing economic landscape and evolving human needs. They propose setting a poverty threshold that ensures individuals can afford basic necessities like food, shelter, and education. Additionally, experts recommend a shift towards government investments in public goods, such as education, healthcare, and infrastructure, as a more effective means of poverty reduction compared to subsidies.

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Poverty Measurement In India FAQs

What are the 4 measures of poverty?

The four measures of poverty are absolute poverty, relative poverty, income poverty, and multidimensional poverty.

What are the three measures to reduce poverty in India?

Three key measures to reduce poverty in India include economic growth, social safety nets, and targeted poverty alleviation programs.

What are the 5 indicators of poverty?

The five indicators of poverty often include income, education, health, housing, and access to basic services.

What are the main causes of poverty in India?

The main causes of poverty in India include unemployment, lack of education, income inequality, and inadequate access to healthcare and basic amenities.


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