• Following elements mainly affect the magnitude of the poverty ration
    • The nutrition norm in the base year
    • Price deflator used to update the poverty line
    • Pro rata adjustment in the number of households in different expenditure classes to determine the number of households below and above poverty line.
  • Agricultural wage earners, small and marginal farmers and casual workers engaged in non-agricultural activities constitute the bulk of the rural poor

Poverty Measurement

  • Measurement redefined through the Expert Group in 1993
    • Chairman: Prof D T Lakdawala
    • Projected a monthly PCI of Rs 49 (rural) and Rs 57 (urban) at all-India level to be adopted at the base line. This was anchored in the recommended per capita daily intake of 2400 calories in rural areas
    • 1973-74 was taken as base year
    • PL defined at the state level, separately for urban and rural households
    • Each line is updated by a state-specific price index (state CPIAL and state CPIIW)
    • There is no countrywide poverty line as such
    • For estimating state specific poverty lines, the standardised commodity basket corresponding to poverty line at the national level to be valued at the prices in each state in the base year i.e. 1973-74.
    • The group estimated that rural poverty ratio has declined from 56.4% in 1973-74 to 39.1% in 1987-88.
    • Urban poverty had come down from 49.2% to 40.1%
    • The overall poverty ratio had therefore declined from 54.9% in 1973-74 to 39.3% in 1987-88
  • Poverty decline captured in terms of two distinct components
    • Growth component <increase in avg per capita expenditure>
    • Distribution component <changes in the distribution of per capita expenditure across households>
  • Economic inequality
    • Strong evidence of divergence in per capita consumption across states
    • Increase in rural-urban inequalities at the all-India level
    • Rising inequality within states has moderated the effects of growth on poverty reduction
    • Overall improvement of living standards may hide instances of impoverishment among specific occupation groups
  • NSS 61st round
    • Rural: 28.3 pc, Urban: 25.7 pc, All India: 27.5 pc – uniform recall period
  • National Commission on Enterprises in the Unorganised Sector
    • 77 pc of the total population of the country in 2004-05 had per capita consumption expenditure of less than Rs. 20 a day
  • Ministry of Rural Development does the BPL census in rural areas. However, no such census is conducted by the Ministry of Housing and Urban Poverty Alleviation in Urban areas
    • MoHUPA reasons that it is very costly to conduct the census and that the size of urban poverty alleviation programme handles by the ministry had hitherto been very small
  • Do the poverty debate really well


Estimates of poverty

  • Arjun Sengupta Committee (NCEUS): 77 pc (Rs 20 per capita per day)
  • NC Saxena Committee (Min of Rural Devt): 50 pc
  • Tendulkar Committee (Planning Commission): 37.2 pc (Rural: 41.8, Urban: 25.7)
  • Methodology of all the three committees

Interim Report of S R Hashim Committee on Identification of BPL in urban areas


The expert group submitted an interim report recommending that poverty in urban areas be identified through identification of specific vulnerabilities in residential, occupational and social categories.

It said that those who are houseless, live in temporary houses where usage of dwelling space is susceptible to insecurity of tenure and is affected by lack of access to basic services should be considered residentially vulnerable.

Houses with people unemployed for a significant proportion of time or with irregular employment or whose work is subject to unsanitary or hazardous conditions or have no stability of payment for services should be regarded occupationally vulnerable.

Households headed by women or minors or where the elderly are dependent on the head of household or where the level of literacy is low or members are disabled or chronically ill should be considered socially vulnerable, it said.

The expert group is yet to finalise the detailed methodology for an ordinal ranking of the poor on the basis of vulnerability.

Problems with measurement of poverty in India

  • Multiple indicators, depending on which agency or department is counting are used for identification of the poor
  • Divergence of official estimates of poverty ratio with the actual incidence of poverty
  • No poverty census in urban areas
  • Use of different methodologies for estimation and identification of BPL households
  • Restricting the identification of poor in states to the cap fixed by the Planning Commission
  • Variation in estimates
  • Wrong targeting of beneficiaries of welfare schemes

Non-income dimensions of poverty: Multi-dimensional poverty index

Poverty Alleviation Schemes


  • Poverty alleviation programmes can be in form of employment generation programmes or social assistance programmes so that different dimensions of poverty are addressed.
  • At present there are three centrally sponsored employment programmes in operation
    • MNREGS: Rural, wage employment
    • SGSY: Rural, self-employment
    • SJSRY: Urban, self and wage employment
    • 2006
    • Launched in 200 most backward districts in the first phase. At present 619 districts are covered under the NREGS
    • During 2008-09, 4.51 crore households were provided employment under the scheme
  • Swarnajayanti Gram Swarozgar Yojana
    • 1999 after restructuring the Integrated Rural Development Programme (IRDP) and allied programmes, viz., Development of Women and Children in Rural Areas (DWCRA), Training of Rural Youth for Self-Employment (TRYSEM), Supply of improved tool-kits to rural artisans (SITRA), Ganga Kalyan Yojana (GKY) and Million Wells Scheme (MWS)
    • Self-employment programme for rural poor
    • Objective is to bring the assisted swarozgaris above the poverty line by providing them income generating assets through bank credit and government subsidy
    • Centre: State – 75:25; 90:10 for NE states
  • Swarna Jayanti Shahari Rozgar Yojana (SJSRY)
    • It is a unified centrally sponsored scheme launched a fresh in lieu of the erstwhile urban poverty alleviation programmes, viz, Nehru Rozgar Yojana (NRY), PM’s Integrated Urban Poverty Eradication Programme (PMIUPEP), and Urban Basic Services for the Poor (UBSP)
    • Revamped in 2009
    • Self-employment + Wage employment
  • The revamped SJSRY has 5 components
    • Urban Self-Employment Programme (USEP)
    • Urban Woman Self-help Programme (UWSP)
    • Skill Training for Employment Promotion amongst urban poor (STEP-UP)
    • Urban Wage Employment Programme (UWEP)
    • Urban Community Development Network

History of poverty alleviation/employment generation programmes

Poverty and  Inclusive Growth

  • Direct relationship between aggregate poverty and average consumption
  • Growth in aggregate income is hence needed for reduction in aggregate poverty



  • Justice Wadhwa committee on the Public Distribution System
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