Model Answer
0 min readIntroduction
Poverty, a multifaceted socio-economic phenomenon, is typically assessed using different metrics. These metrics can be broadly categorized into absolute and relative measures. While absolute poverty defines a minimum level of income or consumption necessary to meet basic needs, relative poverty defines poverty in relation to the economic status of other members of the society. Understanding these distinctions is crucial for formulating effective poverty alleviation strategies. India, over the years, has employed various methodologies to estimate poverty, evolving from a nutritional intake based approach to a consumption expenditure based approach.
Absolute vs. Relative Measures of Poverty
The core difference between absolute and relative poverty lies in their reference points. Here’s a detailed comparison:
| Feature | Absolute Poverty | Relative Poverty |
|---|---|---|
| Definition | Lack of essential resources to satisfy basic needs (food, shelter, clothing). | Lack of resources compared to others in the same society. |
| Reference Point | A fixed standard, usually a poverty line based on minimum caloric intake or expenditure. | The average standard of living in a particular society. |
| Focus | Survival and basic necessities. | Inequality and social exclusion. |
| Example | Individuals earning less than $2.15 per day (World Bank’s international poverty line – 2022). | Individuals earning less than 60% of the median household income in a country. |
Poverty Estimation in India
India primarily uses an absolute measure of poverty to estimate the poverty levels. Historically, the estimation was based on the nutritional intake of individuals, specifically the caloric requirement of 2400 calories per person per day in rural areas and 2100 calories in urban areas.
Evolution of Poverty Estimation in India
- Pre-Independence: Poverty was largely assessed qualitatively.
- 1962: Y.K. Alagh Committee defined poverty based on nutritional requirements.
- 1979: Poverty Line Exercise (PLE) conducted by the Planning Commission.
- 2009-10: Tendulkar Committee adopted a consumption expenditure based approach, linking poverty to the nutritional norm and also considering expenditure on essential non-food items like education and health. The poverty line was set at ₹816 per month for rural areas and ₹1000 for urban areas.
- 2013-14: Rangarajan Committee recommended a higher poverty line, increasing the expenditure norms and accounting for regional variations.
- 2022-23: NITI Aayog is currently working on a more comprehensive and multi-dimensional poverty index (MPI) to provide a more nuanced understanding of poverty.
Currently, the National Multidimensional Poverty Index (MPI) released by NITI Aayog is used alongside the consumption expenditure based poverty estimates. The MPI considers deprivations across three dimensions – Health, Education, and Standard of Living – and 12 indicators. However, the official poverty line remains anchored in the absolute measure of consumption expenditure.
Conclusion
In conclusion, while relative poverty highlights societal inequalities, India predominantly relies on absolute measures of poverty, specifically consumption expenditure, to define and estimate poverty levels. This approach allows for tracking progress in meeting basic needs and setting targeted poverty alleviation goals. The shift towards the Multidimensional Poverty Index represents a move towards a more holistic understanding of poverty, but the absolute measure remains central to official poverty estimation.
Answer Length
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