Study Guides/Economics/Poverty Line in India
Study Guide · Economics

Poverty Line in India — Definition and Committees

The Poverty Line is an imaginary line used to measure poverty. It defines the minimum level of income or consumption required to meet basic life necessities. It is a key topic in Class 9 Economics.

Question (Click to Flip)

Why is the calorie requirement higher in rural areas?

Answer

People living in rural areas generally engage in more hard physical labour (like agriculture) compared to urban residents, so they require more energy (calories).

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Key Facts

According to the World Bank's international poverty line, anyone living on less than $2.15 a day (revised from $1.90) is considered to be living in extreme poverty.

How is the Poverty Line Determined in India?

In India, the poverty line is primarily determined based on consumption expenditure rather than income. It considers two main factors:

  1. Nutritional (Calorie) Requirement:

    • Rural areas: 2400 calories per person per day (higher because of more physical labour).
    • Urban areas: 2100 calories per person per day.

  2. Monetary Value (Expenditure): The cost of buying the food to meet these calories, plus the minimum cost of clothing, footwear, fuel, light, education, and medical requirements, determines the monetary poverty line.

Major Poverty Estimation Committees

  • Tendulkar Committee (2009): Moved away from purely calorie-based criteria to include health and education. Set the poverty line at ₹816/month (rural) and ₹1000/month (urban) based on 2011-12 prices.
  • Rangarajan Committee (2014): Revised the methodology and set the line at ₹972/month (rural) and ₹1407/month (urban).

Who Estimates Poverty?

Poverty line estimations are made by the NITI Aayog (earlier the Planning Commission) based on survey data collected by the National Sample Survey Office (NSSO).

Questions and Answers

Why is the calorie requirement higher in rural areas?+

People living in rural areas generally engage in more hard physical labour (like agriculture) compared to urban residents, so they require more energy (calories).

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