Poverty and Poverty Line in India

It has been estimated that in the rural areas of India, more than a quarter of the population is below the poverty line. Thus, it can be understood that out of the total population in any given village in the country around 25% of the population of that village resides under the line of poverty. In the same way, this percentage revolves around 13% in the urban parts of the country.

In India, the popular method to do the poverty estimation is by analyzing the consumption of the 

income by the people, be it individually or the family as a whole. If the income of an individual or the family fails to meet the stage or the level of minimum income consumption then that individual or the family is said to be under the line of poverty.

Calculation of the poverty line: The task force set by the Niti Ayog estimates the percentage of poverty in the country. The task force calculates the poverty estimation based on the data recorded by National Sample Survey Office NSSO. The survey is conducted under the Ministry of Statistics and Program Implementation. The planning commission was replaced by the NITI Ayog. The planning commission was previously responsible for the calculation of the poverty index.

Consumption expenditure is the basis for the calculation of the poverty line in India. The following are the reasons for the calculation of the poverty line based on consumption expenditure instead of income levels in India,

The income variation: The income of most of the daily wage workers in the country keeps varying at regular intervals of time. At the same time, the pattern of consumption remains the same.

An additional source of income: Even in the case of daily wage workers in India, many of them own an additional source of income. The additional source of income may be a single one of the multiple ones. This brings variation in the income calculation of these workers and thus gets difficult to calculate the exact earnings.

Need for Poverty estimation in India

The need for poverty estimation in India does not only gets restricted to the purpose of academics. Instead, it is also one of the crucial ways of tracking the reach of the various policies that the governments start on the population of the country. The understanding of the success of the policies started with an aim of raising the population from below the poverty line to above the poverty line is been studied by the estimation of poverty in the country.

Secondly, the estimation of poverty in the sort of the line of poverty is been utilized to formulate the plans for poor centric poverty elimination.

The different types of poverty measurement

Absolute poverty measurement

As per the UN World Summit for Economic Development, the condition of absolute poverty can be framed as the immense deprivation of the needs of the human. These various human needs include education, health, sanitization facilities, clean drinking water, food and information.

Relative poverty method

This type of poverty is present when the income of the household is below the median income in the given country. This method is usually used by developed countries around the world.

What is the poverty line?

The meaning of poverty line can be defined as the stage of personal income of an individual or a family that is lower than the standards set by the government.

Reason for poverty in India?

The reason for poverty in India is many and those include, an immense population, a higher rate of illiteracy, over-dependence on the sole bread earner, unemployment, and so on.

Conclusion

A country like India with the existence of an immense population makes it difficult for the estimators of the poverty index to find an accurate number. The various methods adopted by the government help us to find the calculation to a major extent but it gets difficult to conclude that the exact number prevails that it is been found in the survey. But the methods of poverty estimation up to a very much extent help the government in raising the population from below the poverty line to above the poverty line. It is the result of the data estimation that helps the government in understanding the percentage of the population residing below the poverty line. With the help of this data, the government forms various schemes and policies that are utilized to improve the life of the people.