Describe how the Poverty Line is estimated in India

India has a lot of poverty. This fact is no secret. It is an issue that can be seen throughout India. India is home to the World’s largest absolute poor – which is estimated to be over one billion people. India’s poverty is a complex issue and one that is hard to measure. This blog will describe how the poverty line is estimated in India.

The poverty line is an estimate of the minimum level of income required to achieve an acceptable standard of living. The poverty line is a basis for the size of the social security safety net. The poverty line is based on a survey that measures the cost of a basket of goods commonly consumed by a family of four. The poverty line is updated periodically

How the poverty line is estimated in India?

Dear friends, following are the methods which are used in estimating the poverty line in India:

  • A minimum level of food provision, foot wear, light and fuel, clothing, educational and medical condition etc. are the basic factors on which the basis poverty line is calculated.
  • While estimating the poverty line, the present formula is based on the desired calorie requirement.
  • In the urban area, the accepted calories requirement in India is 2100 calories per person per day and in rural areas, the accepted average calories requirement is 2400 calories per person per day.
  • The calories essential for the people living in rural areas is more than that of the people living in urban areas because they do more manual work as collate to urban people.

What is poverty?

Poverty is the inability to fulfill the minimum requirement of life. The minimum necessity involve food, clothing, housing, education and health.

Poverty are of two types:

1. Relative poverty- It mention to poverty within different classes, regions or countries. The country or class of people whose level of living is low and is treated as poor or relatively poor in comparison to other country or class.

2. Absolute poverty- In India the concept of poverty line is used as measure absolute poverty. Poverty line refers to cut off point (In term of per capita expenditure) that decide people of a region as poor and non poor.

What are the purposes of the Poverty Line?

The poverty line is a way to measure the income of people in a country. The poverty line is usually set at a specific level, below which people are considered poor. This allows the government to decide what the welfare programs and tax brackets should be. It is important to note that the poverty line is not a perfect measure of poverty. In order to properly measure poverty, there are many other factors that need to be taken into account.

What are the real causes of poverty?

There are many causes of poverty including: poor management, lack of education, a lack of opportunity, and not enough jobs. However, there are real problems that are faced by people that are considered to be poor. There are many causes of poverty listed below:

1. Poverty with reference of underdevelopment of Indian economy.

  • Low level of national product (Low per capita income, UNO norms).
  • Low rate of growth (During planning period GDP is nearly about 5%, Population growing rate is 2% and Income growth rate is 3 %).
  • Heavy pressure of population.
  • Inflationary speed (Erode real income of household).
  • Chronic unemployment and underemployment.
  • Capital deficiency.
  • Lack of Infrastructure.
  • Outdated social institution.

2. Poverty with testimonial to uneven distribution of Income.

  • Poverty in India can also be explicate with testimonial to uneven distribution of Income.
  • Efforts have been made by government to moderate inequality through a system of progressive donation and other measures.
  • According to monopoly inquiry commission 1536 companies in the country are controlled by 75 families.
  • Unequal distribution of income widening the gulf between the rich and poor.
  • With the huge stock of wealth the rich are able to build their fortune while the poor continues to struggle for survival.

How can we remove or reduce poverty?

  1. GDP growth
  2. Distribution of Income
  3. Population control
  4. Quality life of poor
  • Combating poverty through GDP growth (New opportunities of employment are generated.
  • Combating poverty by improving the distribution of income.
Fiscal MeasuresLegislative Measures
1. Greater reliance on progressive tax.1. Minimum wage act.
2. Tax receipt of government are used to subsidies purchase by poor section. 2. Prices floor for farm products.
3. Subsidies are offered on items like coarse cloth, coarse grains.3. Right to education.
  • Combating poverty through population control (per capita income)
  • Other measure enhancing quality of life of poor:
  1. Development of agriculture.
  2. Stability in the price level.
  3. Eradication of unemployment.
  4. Labor intensive method of production.
  5. Provision for minimum needs of poor.
  6. Special focus on backward regions.

What are the states in India that are considered to have a high poverty rate?

As per Niti Aayog’s Multidimensional Poverty Index Bihar, Jharkhand and Uttar Pradesh have emerged as the poorest states in India. The MPI, which is an index that measures multiple dimensions of deprivation, ranked Bihar as the state with the highest level of multidimensional poverty. As per the index, Bihar residents are the most deprived when it comes to health, education, living standards and employment.

Final Thoughts

In India, the poverty line is estimated based on the amount of per capita poverty line that is calculated for each state. The state with the highest per capita poverty line is the state with the highest number of poor. To calculate the per capita poverty line for a state, the State Plan Committee for the state estimates the number of poor people in the state, and then the Planning Commission estimates the average per capita expenditure of the poor. The poverty line is then calculated based on the average per capita expenditure of the poor in the state.

Thanks for checking out our blog! If you’re finding it tough to figure out how much money you’re making in India, we’ve got you covered with this article! Keep it in mind next time you’re trying to figure out the poverty line in your country. If you’re still unsure, please don’t hesitate to contact us at [email protected]

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