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 What is poverty, and how is it measured?

Poverty can be defined as a condition in which an individual or household lacks the financial resources to afford a basic minimum standard of living. Economists and policymakers estimate “absolute” poverty as the shortfall in consumption expenditure from a threshold called the “poverty line”. The official poverty line is the expenditure incurred to obtain the goods in a “poverty line basket” (PLB). Poverty can be measured in terms of the number of people living below this line (with the incidence of poverty expressed as the head count ratio). The “depth” of poverty indicates how far the poor are below the poverty line.

Six official committees have so far estimated the number of people living in poverty in India — the working group of 1962; V N Dandekar and N Rath in 1971; Y K Alagh in 1979; D T Lakdawala in 1993; Suresh Tendulkar in 2009; and C Rangarajan in 2014. The government did not take a call on the report of the Rangarajan Committee; therefore, poverty is measured using the Tendulkar poverty line. As per this, 21.9% of people in India live below the poverty line.

The PLB comprises goods and services considered essential to a basic minimum standard of living — food, clothing, rent, conveyance, and entertainment. The price of the food component can be estimated using calorie norms or nutrition targets. Until the 1990s, the calorie norms method was used — it was based on the minimum number of calories recommended by the Indian Council of Medical Research (ICMR) for a household of five members. However, this method does not consider the different food groups that are essential for health — this is why the Tendulkar Committee targeted nutritional outcomes.


The current “level” of poverty in India?

The National Statistical Office (NSO) Report on Household Consumer Expenditure for 2017-18 was junked in 2019 — so there are no data to update India’s poverty figures. Even the MPI report published by Oxford Poverty and Human Development Initiative used data from the fourth round of the National Family Health Survey, figures for which are available only until 2015-16.

Social scientist S Subramanian used  of the data and assumed that, consumer expenditure data to conclude that the incidence of poverty in India increased from 31.15% to 35.1% between 2011-12 and 2017-18. The absolute number of poor people also increased from 270 million to 322.22 million over the same period, which translates to 52 million more poor people in six years.



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