Defining & Measuring Poverty
Poverty, a complex phenomenon, requires precise definitions and robust measurement tools to inform effective policy. Understanding its different forms is the first step.
Conceptual Distinctions
Absolute Poverty
Lacks minimum income for basic food, shelter, healthcare. Measured against a fixed poverty line. About subsistence.
Relative Poverty
Lacks income to maintain average living standard in society. Poor in comparison to others. About inequality.
Transient Poverty
Individuals moving in and out of poverty due to temporary hardships (e.g., seasonal unemployment, illness).
Chronic Poverty
Individuals remaining in poverty for extended periods, often inter-generationally, due to deep-seated issues.
Historical Evolution of Poverty Lines in India
1901: Dadabhai Naoroji
Earliest estimate based on 'jail cost of living' (Rs 16-35/capita/year).
1938: National Planning Committee
J.L. Nehru: Set poverty line at Rs 15-20/capita/month, independent of institutional living.
1962: Working Group (Planning Commission)
First official poverty line: Rs 20 (rural) & Rs 25 (urban) per capita monthly expenditure.
1979: Alagh Committee
Recommended calorie norms: 2400 kcal (rural), 2100 kcal (urban).
1993: Lakdawala Committee
Retained calorie norms, state-specific poverty lines, used CPI-IW/AL for updates.
2009: Tendulkar Committee
Shifted to consumption expenditure (food + non-food incl. health, education), MRP; PL at Rs 816/1000 for 2011-12.
2014: Rangarajan Committee
Modified Tendulkar, higher PL (Rs 972/1407 for 2011-12), not officially adopted.
Multidimensional Poverty Index (MPI)
Global MPI: A Holistic View
Developed by UNDP and OPHI, MPI measures acute multidimensional poverty, moving beyond income to capture multiple deprivations. A person is considered multidimensionally poor if deprived in at least one-third (33.3%) of weighted indicators.
Dimensions (3) & Indicators (10):
- Health: Nutrition, Child Mortality
- Education: Years of Schooling, School Attendance
- Standard of Living: Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets
National MPI (NITI Aayog): India's Progress
Based on Global MPI, adapted for India using NFHS data, it reveals significant progress in poverty reduction.
Key Progress (2015-16 to 2019-21 NFHS-5):
- 13.5 crore people exited multidimensional poverty.
- Percentage reduced from 24.85% to 14.96%.
- Intensity of deprivation among poor also reduced.
- Fastest reduction in UP, Bihar, MP, Odisha, Rajasthan.
Poverty Line Committees: A Quick Summary
| Committee | Year | Key Methodology/Contribution |
|---|---|---|
| Working Group | 1962 | First official poverty line (Rs 20/25). |
| Alagh Committee | 1979 | Calorie norms (2400 rural, 2100 urban). |
| Lakdawala Committee | 1993 | State-specific PLs; CPI-AL/IW for updating; retained calorie norms. |
| Tendulkar Committee | 2009 | Consumption expenditure (food + non-food); broader basket; MRP. |
| Rangarajan Committee | 2014 | Modified Tendulkar; higher poverty lines; not officially adopted. |
Root Causes of Deprivation
Poverty in India is a deeply entrenched challenge, stemming from a complex interplay of economic, social, institutional, and structural factors.
Economic Factors
- Low Agricultural Productivity: Monsoon reliance, land fragmentation, inadequate irrigation.
- Unemployment/Underemployment: Disguised, structural unemployment, high youth unemployment.
- Informalisation of Economy: Low wages, no social security, poor conditions.
- Inflation: Erodes purchasing power of the poor.
- Lack of Access to Credit: Reliance on high-interest informal moneylenders.
Social Factors
- Caste System: Intergenerational poverty, social exclusion for SC/ST.
- Gender Discrimination: Wage gaps, low female LFP, feminization of poverty.
- Illiteracy & Lack of Education: Limits skilled job access, perpetuates poverty cycle.
- High Population Growth: Pressure on limited resources in poor households.
- Health Issues: Lower productivity, increased expenditure, loss of working days.
Institutional & Structural Factors
- Inadequate Land Reforms: Unequal land ownership, vulnerable landless labourers.
- Inadequate Public Services: Poor quality and reach of healthcare, education.
- Corruption & Governance Deficits: Leakages, misuse of funds, weak implementation.
- Regional Disparities: Uneven development between states/regions.
- Climate Change Impacts: Extreme weather affecting agricultural livelihoods.
Pathways to Progress: Key Initiatives
The Indian government has launched a multitude of programs since independence to combat poverty, addressing various dimensions of deprivation.
- MGNREGA (2005): 100 days of wage employment guarantee in rural areas.
- PM SVANidhi (2020): Collateral-free working capital loans for street vendors.
- PMEGP (2008): Credit-linked subsidy for micro-enterprises.
- DAY-NRLM (2011): Poverty reduction through SHGs for livelihoods.
- PMKVY (2015): Skill development for industry-relevant skills.
- PMAY (2015): Affordable housing for rural and urban poor.
- Swachh Bharat Mission (2014): Universal sanitation coverage (ODF).
- Jal Jeevan Mission (2019): Tap water to all rural households.
- Saubhagya (2017): Universal household electrification.
- PM-KISAN (2019): Income support to farmer families (₹6000/year).
- PMGKAY (2020): Free food grains under NFSA.
- NSAP (1995): Financial assistance for elderly, widows, disabled (social pensions).
- PMJDY (2014): Access to financial services (bank accounts, credit, insurance).
- PMMY (2015): Loans up to ₹10 lakh for micro/small enterprises.
- Stand-Up India (2016): Loans for SC/ST and women entrepreneurs.
Successes of Initiatives
- Safety Net: MGNREGA provided crucial support during shocks.
- Infrastructure: Significant progress in sanitation, electricity, housing.
- Access to Finance: PMJDY & Mudra increased formal financial inclusion.
- Reduced Leakages: DBT via JAM trinity improved efficiency.
- Empowerment: NRLM/NULM empowered women through SHGs.
Challenges in Implementation
- Leakages & Corruption: Despite DBT, issues persist (ghost beneficiaries).
- Targeting Errors: Exclusion (deserving left out) and inclusion (non-deserving included).
- Lack of Awareness: Many eligible beneficiaries are unaware of schemes.
- Bureaucratic Hurdles: Complex processes, delayed disbursements.
- Sustainability: Focus often on temporary relief, not long-term livelihoods.
National MPI: Percentage of Multidimensionally Poor
Source: NITI Aayog, "National MPI: A Progress Review 2023"
Navigating the Future: Challenges & Solutions
Achieving a poverty-free India requires overcoming systemic challenges and adopting a holistic, sustained, and adaptive approach.
Persistent Challenges
Implementation Gaps
Leakages, targeting errors, lack of awareness, bureaucratic hurdles undermining scheme efficacy.
Sustainability Concerns
Focus on immediate relief over creating permanent, dignified livelihoods.
Inadequate Human Capital
Insufficient spending on quality education, skill development, universal healthcare.
Climate Change Impacts
Disproportionate impact on poor farmers and natural resource-dependent communities.
Urban Poverty Complexity
Rapid urbanization leads to slums, inadequate services, precarious employment.
Persistence of Social Hierarchies
Caste, gender, and religious discrimination continue to act as barriers.
Way Forward: A Holistic Approach
Strengthening Human Capital
- Universal, Quality Education (NEP 2020 alignment)
- Robust Public Healthcare System
- Demand-driven Skill Development
Agricultural & Rural Revitalization
- Enhance Productivity (Irrigation, R&D)
- Value Chain Integration & FPOs
- MGNREGA Refinements (Asset Creation)
- Equitable Land Reforms
Governance & Social Safety Nets
- Transparency & Accountability (DBT, Digital Inclusion)
- Expand Social Security (Pensions, Health Insurance)
- Climate Resilience for Vulnerable
- Inclusive Urban Development
Universal Basic Income (UBI) Debate
UBI, a periodic, unconditional cash payment to all citizens, offers potential benefits like reducing administrative costs and providing dignity. However, concerns about fiscal feasibility, disincentive to work, and inflation persist. It remains a potential future policy tool, requiring careful consideration and pilot programs.