Introduction
Poverty in India is officially estimated through consumption expenditure rather than household income, primarily relying on Monthly Per Capita Consumption Expenditure (MPCE) derived from Household Consumption Expenditure Surveys (HCES) conducted by the National Sample Survey Office (NSSO) under MoSPI. Over the decades, India has transitioned from purely calorie-based consumption lines to comprehensive multidimensional assessments of deprivation.
1. NSSO Recall Period Methodologies
The statistical measurement of consumption expenditure hinges on the reference or recall periods used during household surveys:
- Uniform Reference Period (URP): Employs a uniform 30-day recall period for all food and non-food consumption items, used historically in earlier survey rounds.
- Mixed Reference Period (MRP): Utilises a 365-day recall period for five low-frequency non-food expenditure items (clothing, footwear, education, institutional health, and durable goods), while retaining a 30-day recall period for all other items.
- Modified Mixed Reference Period (MMRP): Uses a 7-day recall for perishables and spices, a 365-day recall for low-frequency non-food items, and a 30-day recall for the remaining basket of goods, adopted in the modern HCES rounds such as 2022-23.
2. Evolution of Expert Committees on Poverty Estimation
The methodological framework for establishing the poverty line has evolved through several high-level committees:
- Y.K. Alagh Committee (1979): Anchored the national poverty line strictly to minimum nutritional requirements, prescribing a daily intake of 2400 kcal per person in rural areas and 2100 kcal in urban areas. It relied on a uniform national price index without accounting for inter-state price variations.
- D.T. Lakdawala Committee (1993): Maintained Alagh's calorie norms but introduced state-specific poverty lines to capture regional price variations. It used the Consumer Price Index for Agricultural Labourers (CPI-AL) for rural areas and the Consumer Price Index for Industrial Workers (CPI-IW) for urban areas under the URP framework.
- Suresh Tendulkar Committee (2009): Moved away from calorie intake norms to an explicit consumption basket incorporating private spending on health and education. Adopting the MRP method, it standardized urban and rural poverty lines based on urban consumption baskets, pegging the 2011-12 poverty line at ₹816 per capita/month (rural) and ₹1,000 per capita/month (urban).
- C. Rangarajan Committee (2014): Re-anchored the line to normative food requirements (calories, protein, and fat) combined with essential behavioral non-food expenditure using MMRP. For 2011-12, it recommended a higher threshold of ₹972 per capita/month for rural areas and ₹1,407 per capita/month for urban areas.
3. Transition to Multidimensional Poverty Measurement
Recognizing the limitations of purely monetary measures, India has complemented consumption-based indices with non-income deprivation assessments led by NITI Aayog:
- National Multidimensional Poverty Index (MPI): Developed using National Family Health Survey (NFHS) data and the Alkire-Foster methodology. It covers three equally weighted dimensions—Health, Education, and Standard of Living—spanning 12 specific indicators (including Antenatal Care and Bank Account ownership beyond the Global MPI).
- Poverty Reduction Trends: According to NITI Aayog estimates, multidimensional poverty in India fell sharply from 29.17% in 2013-14 to 11.28% in 2022-23.
Conclusion
The evolution of poverty estimation in India—from basic calorie minimums to consumption baskets and the National MPI—reflects a comprehensive understanding of deprivation. Aligning updated Household Consumption Expenditure Survey metrics with multidimensional tracking supports targeted social welfare delivery and advances India's commitment to SDG Target 1.2.