Define poverty. How is poverty line calculated in India.
Answers
Explanation:
Poverty is the state of not having enough material possessions or income for a person's basic needs. Poverty may include social, economic, and political elements. Absolute poverty is the complete lack of the means necessary to meet basic personal needs, such as food, clothing, and shelter.
Answer:
Poverty Estimation
A common method used to estimate poverty in India is based on the income or consumption levels and if the income or consumption falls below a given minimum level, then the household is said to be Below the Poverty Line (BPL).
Poverty Line Calculation: Poverty estimation in India is now carried out by NITI Aayog’s task force through the calculation of poverty line based on the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI).
NITI Aayog as a policy think tank has replaced Planning Commission, which was earlier responsible for calculating the poverty line in India.
Consumption Versus Income Level: Poverty line estimation in India is based on the consumption expenditure and not on the income levels because of the following reasons:
Variation in Income: Income of self-employed people, daily wage laborers etc. is highly variable both temporally and spatially, while consumption pattern are comparatively much stable.
Additional Income: Even in the case of regular wage earners, there are additional side incomes in many cases, which is difficult to take into account.
Data Collection: In case of consumption based poverty line, sample based surveys use a reference period (say 30 days) in which households are asked about their consumption of last 30 days and is taken as the representative of general consumption.
Whereas tracing the general pattern of income is not possible.
Reference Period: It is the duration/period during which the survey is conducted by NSSO workers in which they ask certain questions to households.
Key Terms
Poverty: According to the World Bank, Poverty is pronounced deprivation in well-being and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.
Poverty Line: The conventional approach to measuring poverty is to specify a minimum expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs and this minimum expenditure is called the poverty line.
Poverty Line Basket: The basket of goods and services necessary to satisfy basic human needs is the Poverty Line Basket (PLB).
Poverty Ratio: The proportion of the population below the poverty line is called the poverty ratio or headcount ratio (HCR).
Need for Poverty Estimation
Impact of Welfare Schemes: Poverty estimates are not just important for academic purposes but are also crucial to track the impact and success of various government policies, especially social welfare schemes that are intended to eliminate poverty.
BPL Census is conducted by the Ministry of Rural Development (along with the partnership of state), in order to identify the poor households.
Poverty Elimination Plan: The Poverty estimates in the form of poverty line are used to formulate poor centric poverty elimination plans.
Constitutional Requirement: Poverty estimation paves the way for poverty elimination, that in turn prepares the ground for a just and equitable society.
Measurement of Poverty Line
Absolute Measurement of Poverty
Absolute Poverty: According to United Nations World Summit for Economic Development, absolute poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.
It depends not only on income but
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