Short essay on poverty

Thus in absolute sense, the concept of poverty is not related to the income and the distribution of consumption expenditure, which is usually done in the measure of relative poverty. Thus in the measure of absolute poverty, the absolute minimum consumption basket includes consumption of food grains, vegetables, milk products and other important items which are necessary for attaining healthy living along with access to other important non-food items. People whose consumption expenditures are found below this threshold limit are usually considered as poor.

For example, the one-dollar consumption expenditure per capita in PPP dollars is the absolute poverty line accepted internationally. This concept of absolute poverty is very much relevant to poor and less developed countries where large scale absolute poverty prevails. Relative poverty, on the other hand, considers over all distribution of income and the relative position of a household within that distribution pattern. Here in this concept of relative poverty, the relative position of one section of people is compared with another group.

This concept of relative poverty can also be extended to other countries to get a comparative estimate of poverty in a relative manner. Thus relative poverty is very much associated with the issues of inequality. Here the extent of income or consumption of the last quintile population poorest could be compared with the richest quintile showing a wide gap between the two. In terms of relative poverty the last quintile population would be termed as poor whereas in terms of absolute poverty criterion the same last quintile group may not be termed as poor as they are maintaining the income and consumption bucket above the minimum level that represents poverty line.

If half of the population of the country is maintaining its average income below the per capita income of the country then they can be termed as poor on the relative criterion although they maintain the minimum basket of goods and services to remain above the poverty line. Thus relative poverty looks at the angle of inequality.

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Thus, the concept of relative poverty is completely different from Absolute poverty. In order to determine the strategy of development of the country, it is quite essential to make an appropriate estimate of incidence of poverty in India. But appropriate and reliable data for the estimation of the extent of poverty is not available in India.

However, on the basis of NSS data on consumption expenditure, various estimates of the extent of poverty have been made by Minhas, Dandekar and Rath, P. Bardhan and Ahluwalia. But due to the differences in their concept of poverty, their results vary widely. The study of the extent of poverty made by Minhas covered the period 57 to Taking the annual per capita minimum expenditure of? Dandekar and Rath estimated their own standard of poverty line taking 2, calories as the desired minimum level of nutrition.

Their estimates revealed that in nearly 40 per cent of the rural population i. Total number of persons living below the poverty line also increased from million in to million in 69, although the proportion of population below the poverty line remained the same at 41 per cent. Bardhan advocated a lower standard for estimating the poverty line and thus considered Rs 15 per capita per month at prices for the rural poverty line and Rs 18 for the urban line.

Moreover, Bardhan concluded that the percentage of population below the poverty line rose from 38 per cent in to 55 per cent in Ahluwalia studied the incidence of poverty in India for the period 57 to Taking the same concept of poverty line of Rs 15 per month at prices for rural areas and Rs 20 per head per month for urban areas he estimated that This extent of poverty declined to He further estimated that in , about This revealed that the incidence of poverty in India fluctuated over the years.

In recent years, the Planning Commission has also estimated the incidence of poverty in India taking Rs 77 per capita per month at prices as the bare minimum consumption for drawing the poverty line for the rural population. Later on the Planning Commission revised per capita monthly expenditure for drawing poverty line at Rs Table These estimates revealed that the proportion of rural population lying below the poverty line declined from Again the proportion of urban population lying below the poverty line declined from Accordingly, these estimates revealed that the percentage of total population below the poverty line declined from The Planning Commission estimates the incidence of poverty in rural and urban areas of the country using the quinquennial survey data on household consumption expenditure released by the National Sample Survey Organisation NSSO , coupled with the poverty lines as set out in the Report of the Task Force on Projection of Minimum needs and Effective Consumption Demand, constituted by the Planning Commission in In view of the recent revisions in the aggregate private consumption expenditure made by CSO and the population data derived from census results, the poverty estimates for have been revised.

In view of the methodological issues raised in respect of the estimates on poverty and also poverty alleviation being an objective of economic and social development, the Planning Commission constituted an Expert Group on September for considering methodology and computational aspects of estimation of proportion and number of poor persons in the country.

While retaining the concept of poverty line as recommended by the Task Force, the Expert Group suggested certain basic changes in the price deflator to update the poverty line for its application in later years. This group suggested use of state specific price indices which can reflect the changes in cost of consumption basket of the people around the poverty line. It also relied exclusively on the National Sample Survey NSS data on consumption expenditure to assess the incidence of poverty without adjusting the NSS Consumption that is obtained from macro-aggregates of the national accounts.

The Expert Group has estimated the percentage of population living below the poverty line under the new estimating pattern, as given in Table The report of the Expert Group which was submitted in July , was subsequently released by the Planning Commission and its recommendations are under consideration.

The new estimate has also confirmed a steady decline in proportion of population below the poverty line. Together with the overall economic growth, the anti-poverty and employment generation programmes have helped in reducing the incidence of poverty over the long run. Accordingly, the poverty ratio in rural areas declined from Again the poverty ratio in urban areas also declined from Moreover, the poverty ratio of the country as a whole has also declined from In numerical terms, the number of persons living below the poverty line in India increased from million in to million in and then gradually declined to million in and then again increased to million in and then to million in Recent estimate of poverty was made by the Planning Commission on the basis of NSSO 55th round data for the year Accordingly, the rural poverty has declined to Again the poverty ratio in urban areas has also declined to Moreover, the poverty ratio of the country as a whole has declined to These two sets of estimates may not be strictly comparable to the earlier estimates of poverty.

Nonetheless, they provide clear evidence indicating a substantial decline in the overall poverty ratio in the country during the s. As per the recent estimate based on NSSO data, it is observed that in the country has million population living below the poverty line BPL ; out of which million live in rural areas and 67 million live in urban areas. Thus the Planning Commission estimate of poverty on the basis of the NSSO data is the latest official estimates of poverty and non official estimates on poverty are available beyond this data.

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Economic Surveys for and , on the basis of the result of 55th round of NSSO, had indicated that there has been an impressive decline in the incidence of poverty in the s. However, the extent of the actual decline in the proportion below the poverty line BPL between and has been a subject of an intense debate by academicians because of the change in methodology for collection of basic data in and possible non-comparability with earlier rounds of the consumer expenditure surveys.

Next official estimates of poverty incidence is based on the NSSO 61st round of large-scale sample survey in On the basis of the quinquennial large sample surveys on household consumer expenditure conducted by the National Sample Survey Organisation NSSO , incidence of poverty is estimated by the Planning Commission for the year Average per capita consumption expenditure for rural and urban population as per 61st Round 05 is Rs NSSO Data also reveals that rural population on an average spends about 55 per cent of its consumption on food and remaining 45 per cent on non-food items.

Tendulkar Constituted by the Planning Commission in December , which submitted its report in December The recomputed poverty estimates for the years and as recommended by the Tendulkar Committee have been accepted by the Planning Commission.

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As per the Tendulkar Committee Report, the national poverty line at prices was a monthly per capita consumption expenditure of Rs The above estimates of poverty line which refer to the national average, vary from state to state because of price differentials. It its report, the Tendulkar Committee mentioned that the proposed poverty lines have been validated by checking the adequacy of actual private expenditure per capita near the poverty lines on food, education and health by comparing them with normative expenditures consistent with nutritional, educational and health outcomes.

In order to have a two point comparison of changes in head count ratio, the Expert Group has again re-estimated poverty ratio for The head count poverty ratio for and as released earlier by the Planning Commission on the basis of Lakdawala Methodology and also by using by the Tendulkar Methodology are shown in Table It is observed that as per Lakdawala methodology, the poverty ratio in general in India declined from But as per Tendulkar methodology, the same poverty ratio declined from However, in respect of both these two methodologies, the extent of poverty reduction is not much different.

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While the poverty ratio in India has declined from It may be observed that the success of some East Asian countries like China and Indonesia lies in faster average GDP economic growth being Moreover, the annual reduction in poverty ratio during the period was 0. The Planning Commission has updated the poverty lines and poverty ratios for the year as per the recommendations of the Tendulkar Committee using NSS 66th Round data from Household Consumer Expenditure Survey.

It has estimated the poverty lines at all India level as an monthly per capita consumption expenditure MPCE of Rs for rural areas and Rs for urban areas in Based on these cut-offs, the percentage of people living below the poverty line in the country has declined from Even in absolute terms, the number of poor people has fallen by Of this Accordingly, the total number of poor in the country has been estimated at The all India head count ratio HCR has declined by 7.

Brief Essay on Rural Poverty in India (768 Words)

Some of the bigger states such as Bihar, Chhattisgarh and Uttar Pradesh have shown only marginal decline in poverty ratio, particularly in rural areas. These estimates of poverty made by the Planning Commission are based on methodology recommended by the Tendulkar Committee, which includes spending on health and education, besides calorie intake. It is also observed that poverty has declined on an average by 1,5 percentage points per year between to The annual averages rate of decline during the period to is twice the rate of decline during the period to The Planning Commission has revised the estimates of poverty lines and poverty ratios for the year following the Tendulkar methodology using the NSS 68th Round data from Household consumer expenditure Survey.

Accordingly, the poverty line at all India level for is estimated at monthly per capita consumption expenditure MPCE of 7 Rs 27 per day for rural areas and Rs Rs 33 per day for urban areas. Based on these cut-offs the proportion of people living below the poverty line in the country has declined from In absolute terms there were However, this current estimate of poverty has triggered controversy among different people.

Some groups argue that the poverty ratio of is too low and far from reality. However, the impact of economic growth, agricultural and industrial development and effect of rural uplift and rural employment schemes cannot be totally denied. Thus it is observed that over a span of seven years the incidence of poverty declined from In India, recently, a serious poverty debate is going on which is related to the concept and the measurement of poverty.

The current debate centres on the estimation of price deflators, reference period for survey and also for determining the basis of poverty line. Accordingly, the incidence of poverty is considered to be overestimated. But, on the other hand, serious debate continued on the incidence of poverty after the release of official estimates of poverty by the Planning Commission for In this report it is found that between 94 and , overall poverty in India declined by 10 per cent and in rural areas by more than 10 per cent.

On this matter many scholars have questioned about the comparability of the and estimates due to the changes in the method of data collection. They observed that the incidence of poverty has been under estimated through over-reporting of expenditure by the surveyed households due to changes in the survey design. Two subsequent studies made by Sundaram and Tendulkar and Sen and Himangshu argued that such decline in the incidence of poverty between and would be in the range 7 per cent to 4.

A high degree of poverty differentials among the various states of India has been continuing from the very beginning. Although various measures were undertaken since the inception of planning for the eradication of poverty throughout the country and some degree of success has also been attained in reducing the poverty ratio in general among all the states but the high degree of poverty differentials still persist among different states of the country. State-wise poverty ratios have witnessed a secular decline from to The poverty is estimated from the state-specific poverty lines and the distribution of persons by expenditure groups obtained from the NSS data on consumption expenditure.

It is observed that though poverty has declined at the macro level, rural-urban and inter-state disparities at the poverty ratio are clearly visible. The state specific poverty ratios at the national and state levels and the poverty differentials among different states from to can be seen from Table It is observed that the poverty ratio both at the rural and urban level in different states has declined considerably but still a high degree of poverty differentials still exist between backward and relatively developed states of the country leading to mounting regional disparities.

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