Tuesday, 14 July 2020

DETERMINATION OF POVERTY LINE

# Poverty line is a cut-off point on the line of
distribution which usually divides the population of the
country as poor and non-poor.
# People having income below the poverty line are
called poor and people having income above the
poverty line are called non-poor.

ABSOLUTE VERY POOR NOT MIDDLE UPPER THE RICH THE MILLIONARIE BILLIONAIRE
POOR POOR SO CLASS MIDDLE VERY
POOR CLASS RICH

POVERTY LINE
MONTHLY PER CAPITA EXPENDITURE
# In India, monthly per capita expenditure is used to
determine the poverty line.
# According to this method, monetary value of the
minimum calorie intake is calculated along with non-
food component like clothing, house, rent, conveyance
and education.
# It recommended poverty line basket which consist of
food basket which meets all normative requirement of
three nutrients of vitamins, protein and fats.
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Tuesday, 14 July 2020

# Average requirement of calorie, proteins and fats per

capita per day at the all India level for 2011-12 is 2155
kcal in rural area and 2090 kcal in urban area.
# Higher calorie intake has been fixed for rural area
because the rural workers has to do greater physical
work as compared to the urban area.
# Therefore, average monthly per capita consumption
expenditure on food in rural area is ₹ 554 and in urban
area is ₹ 656 in urban area.
# The non – food component of poverty line is difficult
to bring a normative standard. However, it has been
set at ₹ 141 in rural area and ₹ 407 in urban area.
# Thus, the monthly per-capita consumption
expenditure of ₹ 972 in rural area and ₹ 1407 in urban
area or ₹ 32 per day in rural area and ₹ 47 per day in
urban area per person (assuming 5 member family).
# Monthly per capita household expenditure of ₹ 4860
in rural India and ₹ 7035 for urban India assuming
family of 5 members.

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• per capita exp on food rs 554

RURAL INDIA and non food 141 which
2155 KCAL PER DAY equals to 972 (approx)
PER PERSON • 972x5(members)=rs 4860
monthly consumption.

• per capita exp on food rs 656

URBAN INDIA and non food 407 which
2090 KCAL PER DAY equals to 1407(approx)
PER PERSON • 1407x5(members)=rs 7035
monthly exp.

( The above is the rough idea of estimation, I have given this

to make you understand the working, it is not required for
examination).
# The families which can meet the threshold criteria of rs 972
per capita per month in rural area and rs rs 1407 per capita
per month in urban area are termed as above the poverty
line and those families which cannot meet the set standard
of monthly per capita expenditure are below poverty line.
# Poverty is measured based on consumer expenditure
surveys of the NATIONAL SAMPLE SURVEY
ORGANISATION(NSSO).
# The erstwhile PLANNING COMMISSION (NITI AAYOG) is the
nodal agency in the government of India for estimation of

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Tuesday, 14 July 2020

poverty at the national and state level separately in rural and

urban areas.
# The incidence of poverty is measured by the poverty ratio,
which is the ratio of number of poor to the total population
expressed as a percentage. It is also known HEAD COUNT
RATIO.
# Different countries have different methods of defining the
threshold income depending on local social – economic
needs.
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PERCENTAGE OF POPULATION BELOW POVERTY LINE IN
INDIA
YEAR POVERT NO OF T
S Y POOR
RATIO( (MILLIO
%) N)
RURAL URBA ALL INDIA RURAL URBA
N COMBINE N
D
1973 56.4 49.0 54.9 261 60 321
-74
1977 53.1 45.2 51.3 264 65 329
-78
1983 45.7 40.8 44.5 252 71 323
1987 39.1 38.2 38.9 232 75 307
-88
1993 37.3 32.4 36.0 244 76 320
-94
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Tuesday, 14 July 2020

1999 27.1 23.6 26.1 193 67 260

-
2000
2004 28.3 25.7 27.8 221 80 301
-05
2009 33.8 20.9 38.5 278.2 76.5 354.
-10 3
2011 26.9 13.7 21.9 216.7 53.1 269.
-12 6

( The table data is only for analysis not to by heart but table
might be given in examination with table and related
question and answers).
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# From the table we can conclude that percentage of poor
people in India has come down from 54.9 % 1973-74 to
21.9% in 2011-12, this can be credited to the various poverty
alleviation programme undertaken by government of India.
# In other words, the head count ratio or absolute poverty in
India has come down.
# It is also evident that the number of poor people (in million)
has also come down.
# In 1973-74, more than 320 million people were below
poverty line. In 2011-12 this number has come down to
about 270 million in terms of proportion.

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Tuesday, 14 July 2020

# The percentage of poor both in rural and urban area has

also managed to come down more so in urban areas due to
rapid industrialisation and growth of service sector post
globalisation, but the ratio of decline is much slower than the
absolute number of poor in the country.
# However, in 1973-74, more than 80 per cent of the poor
resided in rural areas and this situation has not changed even
in 2011-12. It means that more than three-fourth of the poor
in India still resides in rural areas.
# We can also notice that the gap between the absolute
number of poor in rural and urban areas got reduced
whereas in the case of ratio the gap has remained the same
until 1999-2000 widened in 2011-12.
# The total number of poor people declined in the rural areas
whereas there was an increase in their urban counterparts. It
is mainly because of two reasons-
a. Increase in the share of urban population in India’s total
population.
b. Migration of people from rural to urban areas.
# The poverty in urban areas is largely a result of rural
poverty affected by poverty and unemployment, people
from rural sectors migrate to cities in search of
employment. Many people among them either do not
get employment at all or remain underemployed. Thus,
they only add to the number of poor people in the
urban sector.

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# Rural poverty is getting concentrated in the

agricultural labour and artisan households and urban
poverty in casual labour households. Among the social
groups ST, SC and other backward classes account for
about 80% of the rural poor.
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