Poverty in India remains a critical socio-economic issue with complex causes and far-reaching consequences. The estimation of poverty is primarily done through consumption-based methods by government bodies like NITI Aayog, using data from national surveys. Causes range from lack of education, unemployment, and unequal resource distribution to social disparities. Poverty leads to poor health, limited access to education, and reduced quality of life. Various government schemes and policy solutions aim to alleviate poverty by improving income opportunities, social welfare, and access to basic services.

Poverty Estimation in India

Poverty estimation in India is primarily based on consumption expenditure levels rather than income, as consumption patterns are considered more stable and reliable. The government uses data from the National Sample Survey Office and the Household Consumption Expenditure Survey to calculate the poverty line. Various methods, including the Mixed Reference Period approach, are used to capture accurate consumption across different goods and services. Estimations also consider purchasing power parity and adjustments for inflation, helping to reflect real poverty levels more effectively.

Committees on Poverty in India

Several expert committees have been constituted over the years to improve poverty estimation methods and provide policy recommendations. These committees have played a vital role in shaping India’s poverty measurement approaches, addressing shortcomings in earlier methods, and suggesting adjustments based on changing consumption patterns and socio-economic factors.

Ending Poverty in India: A Goal for the 21st Century

• The United Nations defines poverty as the “denial of opportunities and choices for the realisation of a sustainable and decent standard of living.” 
• What is Poverty in India?
  • It is a complex issue that is influenced by a variety of factors, including economic inequality, lack of access to education and healthcare, and social exclusion.
• Types of Poverty:
  • Absolute poverty: condition where household income is below a necessary level to maintain basic living standards (food, shelter, housing).
  • Relative poverty: condition where household income is a certain percentage below median income.

Poverty Measurement in India: A Multidimensional Approach toward Poverty in India

• Poverty Line: The poverty in India is measured on the basis of poverty line quantified in terms of per capita consumption expenditure.
  • Data is obtained from the large sample survey of consumer expenditure data of the National Sample Survey Office (NSSO). 
  • Households with consumption expenditures below the poverty line are said to be “Below the Poverty Line (BPL)” and deemed to be poor.
• Pre-Independence Poverty Estimation: Poverty In India 
  • Poverty and Unbritish Rule in India (1901): In his book, Dadabhai Naoroji made the earliest estimate of the poverty line at 1867-68 prices (₹16 to ₹35 per capita per year) based on the cost of a subsistence diet and tried to define poverty in India. 
  • National Planning Committee (1938): Set up under the chairmanship of Jawaharlal Nehru, suggested a poverty line (₹15 to ₹20 per capita per month) based on a minimum standard of living, a different approach to measure poverty in India. 
  • The Bombay Plan (1944): It suggested a poverty line of ₹75 per capita per year.
• Post- Independence Poverty Estimation: A New approach to Poverty in India
  • Planning Commission Expert Group (1962): It formulated the separate poverty lines for rural and urban areas at ₹20 and ₹25 per capita per year respectively. 
  • VM Dandekar and N Rath (1971): They made the first systematic assessment, based on National Sample Survey (NSS) data to measure poverty in India. 
    • They suggested providing 2250 calories per day in both rural and urban areas. This was the first time that calories intake was taken into consideration to measure poverty in India. 

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• • YK Alagh Committee (1979): It constructed a poverty line for rural and urban areas on the basis of nutritional requirements and related consumption expenditure. 
  • Lakdawala Committee (1993): It suggested that consumption expenditure should be calculated based on calorie consumption as earlier. State specific poverty lines should be constructed. 
    • It asked for discontinuation of scaling of poverty estimates based on National Accounts Statistics to measure poverty in India. 
  • Tendulkar Committee (2009): The current official measures of poverty in India are based on the Tendulkar poverty line, fixed at daily expenditure of ₹27.2 in rural areas and ₹33.3 in urban areas is criticised by many for being too low.

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Current Levels of Poverty in India

• Niti Aayog: According to NITI Aayog’s National Multidimensional Poverty Index (MPI), India’s population living in multidimensional poverty in India was 14.96%. 
  • The rural areas of India experienced multidimensional poverty of 19.28%. 
  • In urban areas, the poverty rate was 5.27%. 
  • The poorest states in India are Bihar, Jharkhand, and Uttar Pradesh. 
• According to the data from the World Bank, about 10% of the Indian population lives on less than USD 2.15 a day, which is the international poverty line for lower-middle income countries.

Causes of Poverty in India

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Consequences of Poverty in India

Poverty affects every sphere of life. By linking poverty with the Sustainable Development Goals (SDGs), we can better understand the effects of poverty in India.

Here are some of the ways in which poverty impacts the SDGs:

• Goal 1: No Poverty: Without addressing poverty, it will be difficult to achieve the other SDGs. 
• Goal 2: Zero Hunger: Poverty is a major cause of food insecurity, hunger and malnutrition.
• Goal 3: Good Health and Well-being: Poverty is associated with inadequate access to healthcare, leading to health disparities, higher disease prevalence, and reduced life expectancy.
• Goal 4: Quality Education: Poverty can hinder access to quality education, making it difficult for children to attend school, and complete their education.
• Goal 5: Gender Equality: Women and girls living in poverty are more likely to experience violence, discrimination, and exploitation. 
• Goal 6: Clean Water and Sanitation: Poverty often limits access to clean water and sanitation facilities, contributing to waterborne diseases and health issues.
• Goal 7: Affordable and Clean Energy: Poor communities often lack access to affordable and clean energy sources, which negatively impacts environmental sustainability.
• Goal 8: Decent Work and Economic Growth: Reducing poverty is essential for promoting decent work and sustainable economic growth
• Goal 10: Reduced Inequalities: People living in poverty are more likely to be discriminated against and to have limited access to opportunities. 
• Goal 11: Sustainable Cities and Communities: Urban poverty is a major problem in urban areas. 
• Goal 13: Climate Action: Poverty makes it more difficult for people to adapt to the impacts of climate change. 
• Goal 16: Peace, Justice and Strong Institutions: Poverty is linked to social unrest and conflict, making it difficult to achieve peaceful, just, and inclusive societies.
• Goal 17: Partnerships for the Goals: Countries with high levels of poverty have fewer resources to invest in sustainable development.

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Poverty Alleviation Programs in India: A step to reduce poverty in India

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International Case Studies on Poverty Alleviation: Best learning to reduce poverty in India

• China: China has lifted over 800 million people out of poverty since 1978. 
  • Factors responsible for success: rapid economic growth, investment in education and healthcare, and social safety nets.
• Brazil: Brazil has lifted over 30 million people out of poverty since 2003. 
  • Factors responsible for success: economic growth, investment in education and healthcare, and social safety nets such as the Bolsa Família program.
• Bangladesh: Bangladesh has lifted over 100 million people out of poverty since 1990. 
  • Factors responsible for success: economic growth, investment in education and healthcare, and social safety nets such as the Grameen Bank.

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