India’s poverty measurement framework needs urgent revision to reflect rising living standards: Study | Current Affairs | Vision IAS
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India’s poverty measurement framework needs urgent revision to reflect rising living standards: Study

Posted 03 Mar 2025

2 min read

The study compares 2022-24 Household Consumer Expenditure Survey data with 2011-12, highlighting poverty and inequality changes.

Key Findings

  • Poverty headcount ratio (HCR): Poverty HCR, at the $1.90 PPP (Purchasing Power Parity) the poverty line, has dropped from ~ 12% in 2011-12 to 1% in 2023-24.
    • Poverty HCR: Percentage of a population living below defined poverty line.
  • Poorest households: Saw significantly higher growth in consumption expenditures than wealthier households.
  • Existing official poverty lines (Tendulkar and Rangarajan): Are outdated and don't reflect current deprivation.

The Study Proposes Two New Relative Poverty Thresholds:

  • Relative Poverty Line Based on the 33rd Percentile of Consumption: Instead of using a fixed poverty line, Poverty is defined based on the spending of the bottom 33% of the population.
  • Relative Poverty Line Based on Income: In Europe, poverty is defined as 60% of the median income (Middle income level when all incomes are arranged in order).
    • Applying this method to India, 16.5% of the population was below this threshold in 2023-24.

New Poverty Line Significance:

  • Reflects updated consumption patterns, addressing current deprivation.
  • Ensures poverty thresholds adjust automatically with economic growth.
  • Provides a more accurate measure of poverty in modern India.
  • Tags :
  • Poverty
  • Relative Poverty
  • Household Consumer Expenditure Survey
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