Question

Explain two methods to estimate poverty line

Answer 1

There are two common methods to estimate the poverty line. They are:
·

☆ Income method:
As per government guidelines if the income of a person is below the set levels which is 40500 to 49000 in rural areas and 51500 to 60000 in urban areas the person is considered poor.
·

☆ Consumption method:
The government has also set a limit for calorie intake, if a person is unable to consume the expected level due to financial constraints the person is considered to be poor.

Answer 2

The two methods are;

1.Income method:

 In this method,the poverty line is estimated with the help of minimum income required.For the year 2011-12,the poverty line for a person was fixed at RS 816 per month for rural areas and RS 1000 per month for urban areas.Higher amount has been fixed in urban areas because of high prices of many essential products in urban centres.

2.Consumption method:

   In this method,the average calorie requirement of a person is multiplied to the current prices.The accepted average calorie required in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.

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