Poverty measurement is a critical aspect of socio-economic analysis in India. It helps policymakers, researchers, and organizations identify the extent of poverty, design interventions, and track progress in poverty alleviation. In India, poverty is primarily measured using various methods and approaches that include income and consumption-based criteria, multi-dimensional frameworks, and national surveys. The methods used to measure poverty have evolved over time, reflecting the changing economic environment and societal concerns.
Income-based measurement of poverty focuses on determining whether individuals or households earn below a certain threshold, referred to as the poverty line. The poverty line is usually set at a specific income level, below which individuals are considered to be poor.
In India, the poverty line is calculated using the consumption expenditure of households. The Planning Commission and later NITI Aayog have set different poverty lines based on consumption levels, which vary for urban and rural areas. The poverty line takes into account the minimum required consumption of goods and services for survival.
Tendulkar Committee (2009): This committee revised the poverty line by calculating the average per capita consumption expenditure required for a person to meet basic nutritional needs, factoring in other basic necessities like clothing and housing.
Rangarajan Committee (2014): This revised the poverty line again, providing a more comprehensive estimate by considering both consumption and the cost of living, with regional variations.
Another common method of measuring poverty in India is through consumption expenditure. This approach assumes that consumption levels are more indicative of living standards than income, as income can fluctuate.
The NSSO (National Sample Survey Office) plays a vital role in measuring poverty through its Consumer Expenditure Survey. The data collected through these surveys forms the basis for determining the poverty line in India. The surveys help in assessing the average consumption of households and provide valuable insights into regional poverty trends.
While income and consumption provide important insights, they fail to capture the broader, multi-dimensional nature of poverty. The Multi-Dimensional Poverty Index (MPI) measures poverty in a more holistic way, including factors such as:
Education: Literacy levels, school attendance.
Health: Mortality rates, access to sanitation and healthcare.
Living Standards: Access to electricity, cooking fuel, clean water, and sanitation.
India adopted a version of MPI, developed by the Oxford Poverty and Human Development Initiative (OPHI). This method recognizes that poverty is not only about low income but also about deprivation in key areas of life, offering a more comprehensive view of poverty. The MPI index is used to understand the deeper issues related to poverty, guiding more effective policy interventions.
The Human Poverty Index (HPI) is another method of measuring poverty in India. Unlike income-based indices, HPI takes into account broader aspects of deprivation, such as the availability of basic services like healthcare and education. The index is useful for measuring the overall well-being of the population and can identify regions with high levels of human poverty.
The Headcount Ratio is a straightforward method for measuring poverty. It simply counts the proportion of the population whose income or consumption is below the poverty line. This measure is easy to compute and is frequently used to provide a quick snapshot of poverty levels in a country. However, it has limitations as it does not account for the depth of poverty (how poor individuals are), which can be important in policymaking.
The Poverty Gap Index (PGI) is another important metric that goes beyond the headcount ratio. It measures not just the number of people below the poverty line, but also the intensity of poverty. This index shows how far below the poverty line the average poor person is. It helps to understand the severity of poverty and is often used to gauge how effectively poverty alleviation programs are reducing the poverty gap.
Since poverty varies significantly across India's diverse states and regions, some states have developed their own methodologies to measure poverty more accurately. For instance, states like Tamil Nadu and Kerala have implemented their own poverty lines, based on local conditions and socio-economic factors. These measures are more region-specific and reflect the unique challenges faced by different areas.
In addition to the income-based and consumption-based measures, social indicators are often used as proxies to measure poverty. These indicators may include the number of people living in slums, access to healthcare, literacy rates, infant mortality rates, and sanitation facilities. These are indirect measures but can provide valuable insights into the social dimensions of poverty.
The Sustainable Development Goals (SDGs), adopted by the United Nations, provide an international framework for measuring poverty. India has incorporated these goals into its national policies, focusing on eradicating extreme poverty, ensuring equitable growth, and promoting sustainable development. SDG indicators for poverty include factors like access to basic services, the reduction of income inequality, and improvements in education and health.
Measuring poverty in India requires a multi-faceted approach, given the country's diverse and complex socio-economic landscape. Methods such as income-based measures, consumption expenditure, multi-dimensional indices, and social indicators all provide valuable insights into the nature and extent of poverty. Although significant progress has been made in poverty alleviation, poverty remains a persistent challenge in India, requiring continuous efforts and data-driven policies. With these varied methods, India can better understand poverty's multidimensional nature and tailor interventions for more inclusive and sustainable development.