Poverty In India: How It is Measured & What are the Current Statistics Related to Poverty? UPSC CSE

Poverty measurement in India has evolved over time, employing various methodologies to assess and address economic deprivation. Below is an overview of the primary methods used to measure poverty, the current approach for identifying Below Poverty Line (BPL) households, and the latest statistics reflecting India's poverty landscape. 

Definition of Poverty:

Poverty refers to a condition in which individuals or communities lack the financial resources and essentials for a minimum standard of living. It is characterized by deprivation of basic needs such as food, clothing, shelter, healthcare, and education. Poverty can be understood in various dimensions:

Types of Poverty:

1. Absolute Poverty:

   • A condition where individuals cannot meet the basic necessities of life, such as adequate food, clean water, shelter, and healthcare.
   • It is usually defined using a fixed income threshold, such as the international poverty line of $2.15 per day (2021 PPP).

2. Relative Poverty:

   • Refers to economic inequality within a specific society, where individuals have significantly less income or resources compared to others in their community or country.
   • It highlights social exclusion and disparity.

3. Multidimensional Poverty:

   • Goes beyond income, considering deprivations across various indicators like health, education, and living standards.
   • For example, the Multidimensional Poverty Index (MPI) considers factors such as malnutrition, child mortality, access to schooling, electricity, and clean drinking water.

Characteristics of Poverty:

• Inadequate access to essential services like education and healthcare.
• Insufficient income to afford basic needs.
• Lack of opportunities to improve one’s economic status.
• Social exclusion and marginalization.
• Vulnerability to shocks like natural disasters, health crises, or unemployment.

Methods of Measuring Poverty in India:

• Income and Consumption Expenditure Surveys: Conducted by the National Sample Survey Office (NSSO), these surveys collect data on household income and expenditure to estimate poverty levels. The official poverty line is determined by the Planning Commission based on this data.

• Tendulkar Committee Methodology (2009): This method shifted the focus from calorie intake to a broader perspective, including spending on food, education, and health. It established poverty lines of ₹816 per person per month for rural areas and ₹1,000 for urban areas (2011-12). 

• Rangarajan Committee Methodology (2014):  Proposed higher poverty thresholds of ₹972 per person per month in rural areas and ₹1,407 in urban areas, considering a broader set of basic needs.

• Multidimensional Poverty Index (MPI):  Developed by NITI Aayog, MPI assesses poverty based on multiple deprivations across health, education, and standard of living. As per the National Family Health Survey-5 (2019-21), 14.96% of India's population was multidimensionally poor, a decline from 24.85% in 2015-16. 

2. Current Method for Identifying BPL Households:

The identification of BPL households in India has been a subject of debate and revision. The criteria vary across states and are influenced by multiple factors, including income, land ownership, and access to basic services. The most recent comprehensive BPL census was conducted in 2002, and since then, there has been no nationwide update. The government has been undecided on criteria to identify families below the poverty line, leading to reliance on outdated data.

3. Current Poverty Statistics in India:

• Poverty Rate at International Poverty Line:  According to the World Bank, 12.92% of India's population lived below the international poverty line of $2.15 per day (2017 PPP) in 2021.

• Household Consumption Expenditure Survey (HCES) 2022-23: The Ministry of Statistics and Program Implementation conducted the HCES from August 2022 to July 2023. The survey revealed that the average Monthly Per Capita Consumption Expenditure (MPCE) was ₹3,860 in rural areas and ₹6,521 in urban areas. Based on this data, the State Bank of India reported that rural poverty was 7.2% and urban poverty was 4.6% in 2022-23, using the Tendulkar Committee's recommended poverty lines of ₹1,622 per person per month for rural areas and ₹1,929 for urban areas.

• Multidimensional Poverty Index (MPI): The National MPI Progress Review 2023 indicated that 14.96% of India's population was multidimensionally poor, showing significant progress in reducing poverty.

India employs a combination of income-based and multidimensional approaches to measure poverty, each providing unique insights into the economic and social challenges faced by its population. While the Tendulkar Committee's methodology remains a reference point for income-based poverty lines, the Multidimensional Poverty Index offers a broader perspective on deprivation. Recent surveys indicate a decline in poverty rates, reflecting the impact of economic growth and social welfare programs. However, the absence of updated criteria for identifying BPL households highlights the need for regular assessments to ensure that poverty alleviation efforts effectively target those in need.