9. Poverty

Absolute poverty

Living below a fixed minimum level of income or consumption, called the poverty line

Relative poverty

Having much less than others in the same society; measured against average income

Poverty line

The minimum consumption expenditure needed to meet basic needs

Headcount ratio

Share of the population living below the poverty line

Poverty gap

How far, on average, the poor fall below the poverty line

Chronic and transient poverty

Chronic poverty lasts for years; transient poverty is temporary, caused by shocks such as a drought or job loss

Vicious circle of poverty

Low income leads to low savings and investment, which keeps income low. The idea is linked to Ragnar Nurkse

Working Group (1962)

Planning Commission; a poverty line of about Rs 20 per person per month at 1960-61 prices

Dandekar and Rath (1971)

First systematic estimate; based on a calorie norm of 2,250 per person per day

Alagh Task Force (1979)

Calorie norms of 2,400 (rural) and 2,100 (urban) per person per day; adopted by the Planning Commission

Lakdawala Committee (1993)

State-specific poverty lines; price updating through CPI-AL (rural) and CPI-IW (urban)

Tendulkar Committee (2009)

Moved away from the calorie norm to a common basket for rural and urban areas, including spending on health and education. Poverty line for 2011-12: about Rs 816 (rural) and Rs 1,000 (urban) per person per month

Rangarajan Committee (2014)

Higher lines of about Rs 972 (rural) and Rs 1,407 (urban) per month; not adopted by the Government

Tendulkar

2004-05

37.2%

Tendulkar

2011-12

21.9% (rural 25.7%, urban 13.7%)

Rangarajan

2011-12

29.5%

Lakdawala

1993-94

36%

Remember

• 2011-12 is the last year for which an official national poverty line estimate was released based on a full consumption survey.

• Since 2022-23 the NSO has run new Household Consumption Expenditure Surveys (HCES), and these use a Mixed Modified Reference Period (MMRP).

• The Planning Commission, which published the estimates, no longer exists; NITI Aayog now works on multidimensional poverty.

Health

Nutrition, child and adolescent mortality, maternal health

Education

Years of schooling, school attendance

Standard of living

Cooking fuel, sanitation, drinking water, electricity, housing, assets, bank account

2021 report (NFHS-4, 2015-16)

About 25% of the population multidimensionally poor; Bihar had the highest and Kerala the lowest poverty

2023 report (NFHS-5, 2019-21)

About 15%; roughly 13.5 crore people moved out of multidimensional poverty

NITI Aayog discussion paper (January 2024)

Headcount fell from 29.17% in 2013-14 to 11.28% in 2022-23; 24.82 crore escaped poverty. Uttar Pradesh, Bihar and Madhya Pradesh saw the largest fall in numbers

International Poverty Line

Raised in June 2025 from $2.15 per day (2017 PPP) to $3.00 per day (2021 PPP)

Lower-middle-income line

Revised from $3.65 to $4.20 per day

India at $3.00 per day

Extreme poverty fell from 27.1% in 2011-12 to 5.3% in 2022-23, or about 7.5 crore people

India at $4.20 per day

Fell from about 57.7% in 2011-12 to about 23.9% in 2022-23

Lorenz curve

Shows the cumulative share of income held by cumulative shares of the population. The farther the curve from the equality line, the greater the inequality

Gini coefficient

A number from 0 (perfect equality) to 1 (perfect inequality) based on the Lorenz curve

Kuznets curve

Inequality first rises and then falls as income grows; an inverted-U shape

Palma ratio

Income share of the top 10% divided by that of the bottom 40%

VB-G RAM G Act, 2025

Replaced MGNREGA, 2005 from 1 July 2026. Guarantees 125 days of wage employment (earlier 100 days) to every rural household whose adult members volunteer for unskilled manual work. MGNREGA gave a legal right to work and was a demand-driven scheme

DAY-NRLM

Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (2011): builds women's Self-Help Groups to raise rural incomes. DAY-NULM (2013) does so for urban areas

PM Awas Yojana (2015)

Housing for all, in urban (PMAY-U) and rural (PMAY-G) areas

National Food Security Act, 2013

Covers up to 75% of rural and 50% of urban population; 5 kg of foodgrain per person per month. Antyodaya Anna Yojana households get 35 kg per household

PM Garib Kalyan Anna Yojana

Free foodgrain to NFSA beneficiaries; extended for five years from January 2024

National Social Assistance Programme (1995)

Pensions for the elderly, widows and persons with disabilities among the poor

PM-KISAN (2019)

Income support of Rs 6,000 a year in three instalments to farmer families

Ayushman Bharat PM-JAY (2018)

Health cover of up to Rs 5 lakh per family per year

PM Ujjwala Yojana (2016)

Free LPG connections to women from poor households

Jal Jeevan Mission (2019)

Tap water connection to every rural household

Quick Recall

• Tendulkar 2011-12: 21.9%; Rangarajan 2011-12: 29.5%.

• Alagh: 2,400 (rural) and 2,100 (urban) calories; Lakdawala: state-specific lines.

• National MPI: NITI Aayog, 12 indicators, NFHS data; global MPI has 10 indicators (UNDP and OPHI).

• MPI = H × A (headcount ratio × intensity).

• World Bank: $3.00 a day (2021 PPP); India 5.3% in 2022-23.

• MGNREGA was replaced by VB-G RAM G from 1 July 2026; 125 days of work.

• Gini coefficient: 0 is equality and 1 is full inequality.