ASSIGNMENT ON

DEFINE MEASURE TO DEFINE

POVERTY, POVERTY LINE &
VARIOUS APPROACHES

By
RITIKA WAHI, SECTION B
Roll No: - A3256119077

SUBMITTED TO: - DR. CHANDRIKA

What is Poverty ?
Poverty is a state or condition in which a person or community lacks the
financial resources and essentials for a minimum standard of living. Poverty
means that the income level from employment is so low that basic human
needs can't be met. Poverty-stricken people and families might go without
proper housing, clean water, healthy food, and medical attention. Each nation
may have its own threshold that determines how many of its people are living
in poverty.

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).

Measures to define poverty

NITI Aayog as a policy think tank has replaced Planning Commission, which
was earlier responsible for calculating the poverty line in India.

 Planning Commission Expert Group (1962), working group constituted by

the Planning Commission formulated the separate poverty lines for rural and
urban areas (₹20 and ₹25 per capita per year respectively).
 VM Dandekar and N Rath (1971), made the first systematic assessment of
poverty in India, based on National Sample Survey (NSS) data.
 Alagh Committee (1979): Task force constituted by the Planning
Commission under the chairmanship of YK Alagh, constructed a poverty
line for rural and urban areas on the basis of nutritional requirements and
related consumption expenditure
 Lakdawala Committee (1993): Task Force chaired by DT Lakdawala,
based on the assumption that the basket of goods and services used to
calculate Consumer Price Index-Industrial Workers (CPI-IW) and Consumer
Price Index- Agricultural Labourers (CPI-AL) reflect the consumption
patterns of the poor
 Tendulkar Committee (2009) Expert group constituted by the Planning
Commission and, chaired by Suresh Tendulkar, was constituted
to review methodology for poverty estimation and to address the
following shortcomings of the previous methods

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.

APPROACHES

The monetary approach

This is the traditional approach, which most people and experts hold (even if
they don’t know they do). It basically defines poverty as the lack of material
resources, i.e. income. That is, people are poor if they don’t have money.

Capability approach
The Capability approach, proposed by novel prize laureate Amartya Sen, goes
beyond the materialistic understanding of poverty of the monetary approach. It
notes that material resources are not enough to guarantee well-being since their
presence doesn’t entail their enjoyment. As we mentioned before, a rich person
with a disease might not be able to enjoy his wealth. He may actually be greatly
deprived, or, in other words, be poor.

Social Exclusion
The Social Exclusion approach also notes the narrowness of the monetary
approach, but focuses on the processes of marginalization to specific groups.
For example, some people may have good jobs, but if they are marginalized by
the majority because of their race/religion/ethnicity/etc., then they cannot be
said to have a good life. According to this approach, a person may be suffering
poverty if he or she is being excluded by other members of society.

Participatory approaches
Participatory approaches do not bother to ask the experts what poverty is.
Rather, they seek to understand poverty from the perspective of the poor. They
gather the testimonies of greatly deprived people on what poverty is. Based on
these testimonies, they note common themes and propose a broad conception of
poverty which includes many dimensions.

The right approach

These four approaches to poverty have different focuses and note many
important aspects of what poverty is. But we would be reducing it if we were to
equate one of those aspects to poverty itself. Rather, the variety of focuses
should lead us to conclude first that poverty is not about the lack of one thing,
but of many. In other words, poverty is multidimensional.

Conclusion

 Poverty is eradicated when there is a surplus in the economy and you allow for
wealth inequality. However wealth inequality destabilizes the
society. Poverty is often the result of personal failure but it is also the result of
bad luck.