Poverty refers to a situation when people are deprived of basic necessities of life. It is often characterized by inadequacy of food, shelter and clothes. Absolute poverty is a having a lack of basic resources, and relative poverty is more to do with income inequality. Poverty in India is measured based on consumer expenditure surveys of the National Sample Survey Organisation. A poor household is defined as one with an expenditure level below a specific poverty line.

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The available concepts in India for identifying poor:

• In 1962, the Planning Commission constituted a working group to estimate poverty nationally, and it formulated separate poverty lines for rural and urban areas – of Rs 20 and Rs 25 per capita per year respectively.
• VM Dandekar and N Rath made the first systematic assessment of poverty in India in 1971, based on National Sample Survey (NSS) data from 1960-61.They argued that the poverty line must be derived from the expenditure that was adequate to provide 2250 calories per day in both rural and urban areas. This generated debate on minimum calorie consumption norms while estimating poverty and variations in these norms based on age and sex.
• In 1979, a task force constituted by the Planning Commission for the purpose of poverty estimation, chaired by YK Alagh, constructed a poverty line for rural and urban areas on the basis of nutritional requirements. It was based on expenditure for buying food worth 2,400 calories in rural areas, and 2,100 calories in urban areas.
• In 2011, the Suresh Tendulkar Committee defined the poverty line on the basis of monthly spending on food, education, health, electricity and transport. According to this estimate, a person who spends Rs. 27.2 in rural areas and Rs. 33.3 in urban areas a day are defined as living below the poverty line. For a family of five that spends less than Rs. 4,080 and Rs. 5,000 in rural and urban areas respectively is considered below the poverty line. This has been criticised for fixing the poverty line too low.
• According to a committee headed by former Reserve Bank governor C Rangarajan, there were 363 million people, or 29.5% of India’s 1.2 billion people, who lived in poverty in 2011-12. The Rangarajan panel considered people living on less than Rs. 32 a day in rural areas and Rs. 47 a day in urban areas as poor.

Issues with the Poverty Line Concept:

• Even though based on calorie approach, the poverty line is not a true indicator of malnourishment because of interpersonal variations in good habits.
• The notion of absolute poverty is inadequate because relative poverty is also an equally important.
• The poverty line, quantified as a number is reductionist. It does not capture important aspects of poverty — ill health, low educational attainments, geographical isolation, ineffective access to law, powerlessness in civil society, caste and/or gender based disadvantages, etc.
• The poverty line provides the conceptual rationalization for looking at the poor as a “category” to be taken care of through targeted ameliorative programmes, ignoring structural inequalities and other factors which generate, sustain, and reproduce poverty.
• Poverty line derived from personal consumption patterns and levels do not take into account items of social consumption such as basic education and health, drinking water supply, sanitation, environmental standards, etc. in terms of normative requirements or effective access.
• In a country of India’s continental size and diversity, poverty line based on aggregation at all-India level ignores State-specific variations in consumption patterns and/or prices.

Way Forward:

• Socio Economic Census today actually is a multi-dimensional poverty line and all the poverty line that we had been drawing with before this were single monolithic poverty line and this represents a radical break from the past.
• The objective is to collect socio economic data and rank the households and state governments can prepare BPL list.
• There needs to be more focus on research, doing away with obsolete methods.
• Use of technology like Big Data and data analysis is necessary to find the true levels of poverty in India.