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How Is the Poverty Line Estimated in India?

Poverty is a big problem in India. Many people around the world are still struggling to meet their ends. In India, approximately 27.5% of the population lives below the poverty line. The question arises: How is the poverty line estimated in India? What are the guidelines for this process?

However, if we go through the numbers, India has been bringing down the poverty population over the years, which is good news for all of us.

What’s a poverty line?

Poverty is the inability of an individual or household to acquire the basic standards of living. But the meaning of poverty may vary with countries and their measures.

The Poverty Line in India

If a person or household has less than the standard income, they come under the poverty line. And anyone who exceeds the set value is categorized above the poverty line. This is used as the benchmark for estimating poverty in India. They are called APL and BPL, respectively.

Poverty is measured on the data provided by the National Sample Survey Organisation. As mentioned earlier, a poor person is described as someone with a lower income than the poverty line.

The Planning Commission is the agency that gives information regarding poverty. It provides the data and numbers of poverty lines across state and national levels, including rural and urban areas.

History of Poverty Line in India

India has its fair share of history with poverty measurement and policies. India started taking note of poverty in the 1960s. The expert committee put this forward through the Planning Commission.

Their strategies were noted, and improvements have been made occasionally. From the data provided by the National Sample Survey Office(NSSO) regarding the consumer consumption of people per capita, they built the concept of the poverty line.

People were divided by household consumption expenditures. A reference baseline was made, consisting of the basic living requirements.

People with expenditures below that are said to be below the line, hence poor. But over the years, many changes have been made to estimating and calculating the poverty line to increase accuracy and refine the process.

Methods For Estimating Poverty Line

Tendulkar Committee Methodology

Suresh Tendulkar and his team put forward this approach. Formed in 20005, they proposed some changes to the existing methodology. And wanted to rectify the conditions regarding the measurement of poverty.

They put forward a strategy that improvised the basis of the estimation. They included both the income level and the calorie intake while maintaining a decent living.

It set a standard calorie requirement for a person and assigned a value to it. Also, it took into consideration education, healthcare and housing needs. This approach aimed to assess and understand more about poverty and ways to overcome it.

However, it was not free of criticism. Many experts argued that this method was based on many assumptions and could not convey any real consequences faced by the individuals. Nonetheless, this paved the way for the changes in the methodologies.

Lakdawala Methodology

The Lakdawala methodology committee, which D.K Lakdawala led, primarily focused on the calorie consumption approach. They calculated the minimum required calorie that was needed for survival. And also the cost of food grains that is required.

Through this approach, they calculated the basic nutritional need for a person.

They calculated the poverty line with the price of good grains and calorie intake.

This method prioritized the basic ability of a household to reach its basic nutritional needs. As mentioned above,  this one was also criticized for its approach. Stating it was a unidimensional way of seeing poverty and argued it sidelines important things like education, healthcare, sanitation, and much more.

Mixed Approach

Nowadays, a mixed approach is used for me for measuring poverty. This methodology combines consumption needs with other priorities, including health, education, and housing conditions, to better grasp poverty.

This includes both income and non-income dimensions of poverty. The committee recognised that poverty issues could not be identified broadly by considering income level and consumer expenditure. With this methodology running smoothly, it helps the government and related organisations make up programs to help them.

Limitations of Poverty Line Estimation

A consumer-based approach used in the poverty line has had many setbacks.

Many experts have said that this takes into consideration of consumption. Other important things like education, health care, livelihood, and water sanitation should be considered.

A multidimensional poverty index has been proposed to remove the income-based approach. This method assures us to connect all the important dimensions, including everything mentioned above. But the problem lies in its implementation. We need to wait and see how things work out.

The poverty line doesn’t distinguish between regions. It just follows the basic guideline. Because of this, there is no consideration for the difference in living costs and other essential requirements. Having a uniform poverty line is not good.

The estimation of the poverty line in India is a complex process. It has been evident that there have been many attempts to find a long-term solution to this issue. Each of them has some limitations. Despite all this, a poverty line is still an important tool for building good strategies and policies for helping out the marginalised sections of our society.

Frequently asked questions: (FAQ)

1. What’s the difference between APL and BPL?

Ans: APL means above the poverty line, and BPL means below the poverty line. It is a term used to describe whether you are above or below the set poverty line.

2. Who estimates the poverty line?

And. The planning commission estimates the incidence of poverty with the data on consumer expenditure provided by NSSO.

3. What are the two methods for measuring the poverty line in India?

Ans. The two methods used are income-based and multidimensional-based. While income based solely relies on income, the multidimensional focus is on many things.

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