Poverty In India.
HISTORY OF POVERTY IN INDIA-
One of the earliest estimations of poverty was done by
Dadabhai Naoroji in his book “POVERTY & UN-BRITISH
RULE IN INDIA”. He formulated a poverty line ranging
from Rs. 16 to Rs. 35 per capita per year based on
1867-68 prices.
IMPORTANT PONITS-
1. The Planning commission estimates levels of
poverty in the country on the basis of consumer
expenditure surveys conducted by the National Sample
Survey office (NSSO) of the ministry of statistics &
programme implementation.
2. ABSOLUTE POVERTY- It measures poverty based on
a pre determined level of per capita consumption
expenditure of the population. Households that lie
below this poverty lone are considered BPL.
RELATIVE POVERTY- estimates poverty in relation to
the economic status of other individuals of the society.
4. HOW TO MEASURE POVERTY-
➢ HEAD COUNT RATIO- HCR= A/N
A= NO. OF POOR
N= TOTAL POPULATION
ESTIMATES THE PROPORTION OF POPULATION BELOW
POVERTY LINE.
➢ POVERTY GAP INDEX
POVERTY GAP IS THE DIFERENCE BETWEEN THE POORs
EXPENDITURE OR INCOME & PRE DETERMINED POVERT
LINE.
POVERTY GAP INDEX IS THE RATIO OF POVERTY GAP YO
THE POVERTY LNE.
POVERTY GAP INDEX MEASURES THE INTENSITY OR
DEGREE OF POVERTY.
5. NITI AAYOG ESTIMATES POVERTY LINE USING NSSO
DATA (NSSO=NATIONAL SAMPLE SURVEY ORG.)
6. EVERY 5 YEARS NSSO CONDUCTS SURVEYS TO
COLLECT HOUSEHOLD CONSUMPTION EXPENDITURE.
MONTHLY PER CAPITA CONSUMPTION
EXPENDITURE (MSME) IS USED TO DETERMINE
POVERTY LINE.
8. MINISTRY OF RURAL DEVELOPMENT CONDUCTS BPL
CENSUS.
9. METHODS USED BY PLANNING COMMISSION NOW
(NITI AAYOG) TO ESTIMATE POVERTY IN INDIA=
✓ UNIFORM RECALL PERIOD (URP)- USED BY NITI
AAYOG TO ESTIMATE POVERTY LINE.
30 DAYS RECALL PERIOD FOR ALL ITEMS (FOOD & NON
FOOD ITEMS)
✓ MIXED RECALL PERIOS- REFERENCE PERIOD FOR 5
NON-FOOD ITEMS (EDUCATION INSTITUTIONS,
MEDICAL EXPENSES, CLOTHING, FOOTWARE &
DURABLE GOODS) CHANGED TO 1 YEAR.
30 DAYS RECALL PERIOD FOR THE REMAMING FOOD &
NON FOOD ITEMS.
✓ MODIFIED MIXED REFERENCE PERIOD (MMRP)
MMRP WAS USED BY THE RANGARAJAN COMMITTEE
FOR THE FIRST TIME IN INDIA TO ESTIMATE POVERTY.
REFERENCE PERIOD VARIED WITH DIFFERENT FOOD &
NON-FOOD ITEMS.
365 DAYS REFERNCE PERIOD- EDUCTION ,
CLOTHING, FOOTWARE, MEDICAL EXPENSES,
7 DAYS REFERNCE PERIOD- FRUITS, VEGETABLES,
SPICES, REFRESHMENT, EDIBLE OIL, EGG, FISH,
MEAT,PAN, TABACCO.
30 DAYS REFERENCE PERIOD- REMAINING FOOD
ITEMS, FUEL & LIGHT, TAXEX, RENT, NOM
INSTITUTIONAL MEDICAL CARE.
10.LORENZ CURVE-
DEVELOPED BY MAX LORENZ IN 1950.
GRAPHICALLY DEPICTS THE DISTRIBUTION OF
WEALTH OR INCOME IN THE SOCIETY OR ECONOMY.
SHOWS RELATIONSHIP BETWEEN “CUMULATIVE
PROPORTION OF INCOME & CUMULATIVE
PROPORTION OF POPULATION”
11.GINI COFFICIENT-
AN IMPORTANT MEASURE TO ESTIMATE
INEQUALITY.
RATION OF AREA BETWEEN LORENZ CURVE & THE
LINE OF PERFECT INCOME EQUALITY TO THE AREA
BELOW THE 45° LINE.
PERFECT EQUALITY- GINI COEFFICIENT IS ZERO.
PERFECT INEQULAITY- GINI COEFFICIENT IS ONE
12.COMMITTIEES ON POVERTY=
A. V M DANDEKAR & N RATH- MADE THE SYSTEMATIC
ASSESSMENT ON POVERTY IN 1971 BASED ON
NATIONAL SAMPLE SURVEY (NSS) DATA FROM 1960-61.
THEY ARGUED THAT POVERTY LINE MUST BE DERIVED
FROM THE EXPENDITURE THAT WAS ADEQUATE TO
PROVIDE 2250 CALORIES PER DAY IN BOTH RURAL &
URBAN AREAS.
B. ALAGH COMMITTEE (1979)-IN 1979 A TASK FORCE
CONSTITUTED BY THE PLANNING COMMISSION FOR
THE PURPOSE OF POVERTY ESTIMATION, CHARED BY
Y.K ALAGH, CONSTRUCTED A POVERTY LINE FOR RURAL
& URBAN AREAS ON THE BASIS OF NUTRITIONAL
REQUIREMENTS---
❖ RURAL= 2400 CALORIES PER DAY
❖ URBAN =2100 CALORIES PER DAY.
C. LAKDAWALA COMMITTEE (1993)- IN 1993 AN
EXPERT GROUP CHARIED BY D.T. LAKDAWALA MADE
FOLLOWING SUGGESTIONS-
CONSUMPTION EXPENDITURE SHOULD BE
CALCULATED BASED ON CALORIE CONSUMPTION.
STATE SPECIFIC POVERTY LINES SHOULD BE
CONSTRUCTED & THESE SHOULD BE UPDATED USING.
THE CONSUMER PRICE INDEX OF INDUSTRIAL
WORKERS (CPI-IW) IN URBAN AREAS & CONSUMER
PRICE INDEX OF AGRICULTURAL LABOUR (CPI-AL) IN
RURAL AREAS.
D. TENDULKAR COMMITTEE- IN 2005 ANOTHER
EXPERT GROUP TO REVIEW METHODOLOGY FOR
POVERTY ESTIMATION, CHARED BY SURESH
TENDULKAR, WAS CONSTITUTED BY THE PLANNING
COMMISSION. IT RECOMMENDED THE :-
❖ SHIFT AWAY FROM CALORIE CONSUMPTION BASED
ON POVERTY ESTIMATION.
❖ A UNIFORM POVERTY LINE BASKET ACROSS RURAL
& URBAN AREAS.
❖ THE COMMITTEE RECOMMENDED USING MIXED
REFERENCE PERIOD BASED ESTIMATES AS OPPOSED TO
UNIFORM REFERENCE PERIOD.
E. RANGARAJAN COMMITTEE- IN 2012 THE PLANNING
COMMISSION CONSTITUTED A NEW EXPERT PANEL ON
POVERTY ESTIMATION, CHARIED BY C RANGARAJAN
WITH THE FOLLOWING OBJECTIVES:-
TO PROVIDE AN ALTERNATE METHOD TO ESTIMATE
POVERTY LEVELS & EXAMINE WHETHER POVERTY LINES
SHOULD BE FIXED SOLELY IN TERMS OF A
CONSUMPTION BASKET OR IF OTHER CRITERIA ARE
ALSO RELEVANT.
TO REVIEW INTERNATIONAL POVERTY ESTIMATION
METHODS & INDICATE WHETHER NASED ON THESE, A
PARTICULAR METHOD FOR EMPIRAL POVERTY
ESTIMATION CAN BE DEVEVLOPED IN INDIA.
COMMITTEE SUBMIT ITS REPORT IN 2014.
HISTORY OF POVERTY IN INDIA-
One of the earliest estimations of poverty was done by
Dadabhai Naoroji in his book “POVERTY & UN-BRITISH
RULE IN INDIA”. He formulated a poverty line ranging
from Rs. 16 to Rs. 35 per capita per year based on
1867-68 prices.
IMPORTANT PONITS-
1. The Planning commission estimates levels of
poverty in the country on the basis of consumer
expenditure surveys conducted by the National Sample
Survey office (NSSO) of the ministry of statistics &
programme implementation.
2. ABSOLUTE POVERTY- It measures poverty based on
a pre determined level of per capita consumption
expenditure of the population. Households that lie
below this poverty lone are considered BPL.
RELATIVE POVERTY- estimates poverty in relation to
the economic status of other individuals of the society.
4. HOW TO MEASURE POVERTY-
➢ HEAD COUNT RATIO- HCR= A/N
A= NO. OF POOR
N= TOTAL POPULATION
ESTIMATES THE PROPORTION OF POPULATION BELOW
POVERTY LINE.
➢ POVERTY GAP INDEX
POVERTY GAP IS THE DIFERENCE BETWEEN THE POORs
EXPENDITURE OR INCOME & PRE DETERMINED POVERT
LINE.
POVERTY GAP INDEX IS THE RATIO OF POVERTY GAP YO
THE POVERTY LNE.
POVERTY GAP INDEX MEASURES THE INTENSITY OR
DEGREE OF POVERTY.
5. NITI AAYOG ESTIMATES POVERTY LINE USING NSSO
DATA (NSSO=NATIONAL SAMPLE SURVEY ORG.)
6. EVERY 5 YEARS NSSO CONDUCTS SURVEYS TO
COLLECT HOUSEHOLD CONSUMPTION EXPENDITURE.
MONTHLY PER CAPITA CONSUMPTION
EXPENDITURE (MSME) IS USED TO DETERMINE
POVERTY LINE.
8. MINISTRY OF RURAL DEVELOPMENT CONDUCTS BPL
CENSUS.
9. METHODS USED BY PLANNING COMMISSION NOW
(NITI AAYOG) TO ESTIMATE POVERTY IN INDIA=
✓ UNIFORM RECALL PERIOD (URP)- USED BY NITI
AAYOG TO ESTIMATE POVERTY LINE.
30 DAYS RECALL PERIOD FOR ALL ITEMS (FOOD & NON
FOOD ITEMS)
✓ MIXED RECALL PERIOS- REFERENCE PERIOD FOR 5
NON-FOOD ITEMS (EDUCATION INSTITUTIONS,
MEDICAL EXPENSES, CLOTHING, FOOTWARE &
DURABLE GOODS) CHANGED TO 1 YEAR.
30 DAYS RECALL PERIOD FOR THE REMAMING FOOD &
NON FOOD ITEMS.
✓ MODIFIED MIXED REFERENCE PERIOD (MMRP)
MMRP WAS USED BY THE RANGARAJAN COMMITTEE
FOR THE FIRST TIME IN INDIA TO ESTIMATE POVERTY.
REFERENCE PERIOD VARIED WITH DIFFERENT FOOD &
NON-FOOD ITEMS.
365 DAYS REFERNCE PERIOD- EDUCTION ,
CLOTHING, FOOTWARE, MEDICAL EXPENSES,
7 DAYS REFERNCE PERIOD- FRUITS, VEGETABLES,
SPICES, REFRESHMENT, EDIBLE OIL, EGG, FISH,
MEAT,PAN, TABACCO.
30 DAYS REFERENCE PERIOD- REMAINING FOOD
ITEMS, FUEL & LIGHT, TAXEX, RENT, NOM
INSTITUTIONAL MEDICAL CARE.
10.LORENZ CURVE-
DEVELOPED BY MAX LORENZ IN 1950.
GRAPHICALLY DEPICTS THE DISTRIBUTION OF
WEALTH OR INCOME IN THE SOCIETY OR ECONOMY.
SHOWS RELATIONSHIP BETWEEN “CUMULATIVE
PROPORTION OF INCOME & CUMULATIVE
PROPORTION OF POPULATION”
11.GINI COFFICIENT-
AN IMPORTANT MEASURE TO ESTIMATE
INEQUALITY.
RATION OF AREA BETWEEN LORENZ CURVE & THE
LINE OF PERFECT INCOME EQUALITY TO THE AREA
BELOW THE 45° LINE.
PERFECT EQUALITY- GINI COEFFICIENT IS ZERO.
PERFECT INEQULAITY- GINI COEFFICIENT IS ONE
12.COMMITTIEES ON POVERTY=
A. V M DANDEKAR & N RATH- MADE THE SYSTEMATIC
ASSESSMENT ON POVERTY IN 1971 BASED ON
NATIONAL SAMPLE SURVEY (NSS) DATA FROM 1960-61.
THEY ARGUED THAT POVERTY LINE MUST BE DERIVED
FROM THE EXPENDITURE THAT WAS ADEQUATE TO
PROVIDE 2250 CALORIES PER DAY IN BOTH RURAL &
URBAN AREAS.
B. ALAGH COMMITTEE (1979)-IN 1979 A TASK FORCE
CONSTITUTED BY THE PLANNING COMMISSION FOR
THE PURPOSE OF POVERTY ESTIMATION, CHARED BY
Y.K ALAGH, CONSTRUCTED A POVERTY LINE FOR RURAL
& URBAN AREAS ON THE BASIS OF NUTRITIONAL
REQUIREMENTS---
❖ RURAL= 2400 CALORIES PER DAY
❖ URBAN =2100 CALORIES PER DAY.
C. LAKDAWALA COMMITTEE (1993)- IN 1993 AN
EXPERT GROUP CHARIED BY D.T. LAKDAWALA MADE
FOLLOWING SUGGESTIONS-
CONSUMPTION EXPENDITURE SHOULD BE
CALCULATED BASED ON CALORIE CONSUMPTION.
STATE SPECIFIC POVERTY LINES SHOULD BE
CONSTRUCTED & THESE SHOULD BE UPDATED USING.
THE CONSUMER PRICE INDEX OF INDUSTRIAL
WORKERS (CPI-IW) IN URBAN AREAS & CONSUMER
PRICE INDEX OF AGRICULTURAL LABOUR (CPI-AL) IN
RURAL AREAS.
D. TENDULKAR COMMITTEE- IN 2005 ANOTHER
EXPERT GROUP TO REVIEW METHODOLOGY FOR
POVERTY ESTIMATION, CHARED BY SURESH
TENDULKAR, WAS CONSTITUTED BY THE PLANNING
COMMISSION. IT RECOMMENDED THE :-
❖ SHIFT AWAY FROM CALORIE CONSUMPTION BASED
ON POVERTY ESTIMATION.
❖ A UNIFORM POVERTY LINE BASKET ACROSS RURAL
& URBAN AREAS.
❖ THE COMMITTEE RECOMMENDED USING MIXED
REFERENCE PERIOD BASED ESTIMATES AS OPPOSED TO
UNIFORM REFERENCE PERIOD.
E. RANGARAJAN COMMITTEE- IN 2012 THE PLANNING
COMMISSION CONSTITUTED A NEW EXPERT PANEL ON
POVERTY ESTIMATION, CHARIED BY C RANGARAJAN
WITH THE FOLLOWING OBJECTIVES:-
TO PROVIDE AN ALTERNATE METHOD TO ESTIMATE
POVERTY LEVELS & EXAMINE WHETHER POVERTY LINES
SHOULD BE FIXED SOLELY IN TERMS OF A
CONSUMPTION BASKET OR IF OTHER CRITERIA ARE
ALSO RELEVANT.
TO REVIEW INTERNATIONAL POVERTY ESTIMATION
METHODS & INDICATE WHETHER NASED ON THESE, A
PARTICULAR METHOD FOR EMPIRAL POVERTY
ESTIMATION CAN BE DEVEVLOPED IN INDIA.
COMMITTEE SUBMIT ITS REPORT IN 2014.
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