Poverty Estimates in India

Poverty Estimates in India: State Bank of India (SBI) survey claims that poverty has dropped to under 5% in urban and rural areas, however a research paper from The Foundation for Agrarian Studies counters this, estimating that 26.4% of India's population remains poor.

  • Determination: In India, the poverty line is determined based on consumption expenditure rather than income levels.
  • Poverty Line Issues and Discrepancies: Poverty line hasn’t been updated since 2011-12.

oThe government has not released official estimates based on the 2022-23 survey, leading to conflicting poverty estimates from NCAER (below 10%) and SBI (under 5%).

oMethodology to adjust poverty line: Consumer Price Index (CPI).

  • Issues with CPI: Uses outdated weights and fails to reflect the consumption patterns of the poor.
  • Associated committees:

o Tendulkar Committee (2009): Tendulkar Committee’s methodology set the poverty line at Rs 1,632 for rural areas and Rs 1,944 for urban areas and poverty ratio at 21.9%.

o Rangarajan Committee (2014): Rangarajan Committee, reviewed the Tendulkar method, proposed a different approach, estimating the poverty ratio at 29.5% for 2011-12

ü Though this estimate was never officially approved by the government.