New Student Offer - Use Code HELLO

Register Now

Poverty: Definition, Types and Estimates in India

Published on Monday, August 26, 2019
Poverty: Definition, Types and Estimates in India


“It is a state in which a person or a community lacks the financial resources and essentials for a minimum standard of living.”
However different organizations have given their own definitions let have a look at it.
“Poverty is the inability of people to attain a minimum standard of living.”                                                                                                                                         -World Bank
“Poverty is the denial of choices and opportunities, a violation of human dignity.”                                                                                                                                 -United Nations

Types of Poverty

1. Absolute Poverty

  • In this certain minimum standards of living are defined and people living below these are termed as poor.
  • It is done by determining a poverty line basket.
  • It is also known as abject or extreme poverty.

2. Relative Poverty

  • It is measured in relation to the rich people of the country.
  • Usually, it is measured as a percentage of the population with income less than that of some fixed proportion.
  • People in this poverty may have all basic amenities and standard of living but their income is far below than national per capita income.

3. Situational Poverty

  • It is a temporary type of poverty.
  • It generally occurs due to job loss, disaster and some other unforeseen situations.

4. Generational Poverty

  • As per the name, it is passed from one generation to other.
  • It is complicated as it’s a vicious cycle and complicated as people are trapped and have low access of tools to come out of it.

5. Urban and Rural Poverty

  • Urban poverty is seen where the population is over 50000 and that of rural where the population is below 50000.
  • More population, lack of proper housing facilities are some problems that urban poor face and rural poor faces low job opportunities, lack of access etc.

Reference Period

NSSO does the survey and comes out with different reference periods

1. Uniform Reference period

  • In this the consumption expenditure on each item is recorded for a reference period of the last 30 days preceding the date of the survey

2. Mixed Reference Period

  • In this consumption expenditure of clothing, footwear, education, and durable goods is recorded for a period of last 365 days and the expenditure of all other items is recorded with a reference period of last 30 days.

3. Modified Reference Period

  • In this the consumption expenditure of edible oil, fruits, vegetables, spices, processed food, non-veg items is recorded for a period of last 7 days and for the remaining all items it is done on the same line as that of Mixed Reference period.

Work Towards Poverty Estimation

  • In the British era, the first estimate was done by Dadabhai Naoroji in his book Poverty and Un-British rule in India. In this, he formulated the poverty line ranging from Rs 16 to Rs 35 per capita per year based on 1967-68 prices.
  • In 1938 it was done by National Planning Committee.
  • In 1944 it was Bombay Plan
  • P D Ojha (1960-61)
    • He considered the average consumption of 2250 calories per person per day
    • The monthly expenses for rural and urban areas were Rs8-Rs11 and Rs15-Rs18 respectively and in terms of physical quantities, it was 518 gm and 432 gm respectively.
  • EPW Da Costa (1963-64)
    • The monthly expenses for rural and urban areas were fixed at Rs 15 and Rs 24 respectively.
  • Dandekar and Rath
    • The daily subsistence was 2250 calories per adult male
  • BS Minhas
    • He used consumption expenses instead of calories to study poverty.
    • The poverty line of annual per person expenditure was Rs 240.
  • PK Bardhan
    • It made use of agricultural labourer’s price index for poverty estimation.
    • Thus Rs 15 was considered as the national minimum at 1960-61 prices.
  • MS Ahluwalia
    • He studied poverty trend over a period of 1956-57 to 1973-74 and found out that poverty over a period has reduced.
    • He too considered Rs 15 as a national minimum at 1960-61 prices.
  • Minhas, Jain, Tendulkar
    • They considered the poverty lines as specified by the Planning commission.

Official poverty estimates as follows:

1. 7th Finance Commission

  • It calculated the augmented poverty line which included the monthly expenditure of a person on health, water and sanitation, road infrastructure, education etc taken by state governments to monthly consumer expenditure of a person.
  • Thus its estimate was higher than that was done by individual experts.

2. 6th Five Year Plan

  • The calorie requirement for rural and urban areas was 2400 and 2100 respectively.

3. Lakdawala Committee (1993)

  • It suggested calculating consumption expenditure on the basis of calorie consumption.
  • Also stated that state-specific poverty lines to update using Consumer Price Index of Industrial Workers (CPI-IW) in urban and Consumer Price Index of Agricultural Labour (CPI-AL) in the rural area.

4. Tendulkar Committee (2005)

  • The committee adopted the urban poverty line based on Lakadwala and converted it into MRP based consumption.
  • The poverty line was defined on the basis of monthly per capita expenditure and was Rs 447 and Rs 579 for rural and urban areas respectively.

5. Rangarajan Committee (2012)

  • The committee determined the poverty line based on a basket of goods and services and the associated level of monthly per capita consumption expenditure captured by NSSO.
  • It considered a modified mixed recall period.
  • Calorie requirement for the rural and urban area was 2154.91 and 2089.35 respectively.

Poverty Line

  • World Bank - $1.25 per person per day
  • Asian Development Bank - $1.51 per person per day

Poverty Alleviation Programme in India

  1. Poverty Alleviation Programme in India
  2. Integrated Rural Development Programme (IRDP)
  3. Jawahar Rozgar Yojana/Jawahar Gram Samriddhi Yojana
  4. Indira Awaas Yojana
  5. Sampoorna Gramin Rozgar Yojana
  6. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
  7. National Food for Work Programme
  8. National Rural Livelihood Mission
  9. Pradhan Mantri Kaushal Vikas Yojana
  10. National Social Assistance Programme
  11. Swarnajayanti Gram Swarojgar Yojana
ebook store

About us

ramandeep singh

Ramandeep Singh, your guide to banking and insurance exams. With 14 years of experience and 5000+ selections, Ramandeep understands the path to success, having transitioned himself from Dena Bank and SBI. He's passionate about helping you achieve your banking and insurance dreams.

  • Follow me:
Close Menu
Close Menu