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Poverty Estimation in India

There has been no official estimate of poverty in India after 2011-12. However, many private estimates are available...

Context:  There has been no official estimate of poverty in India after 2011-12. However, many private estimates are available.

Poverty estimation in India:

  • Poverty can be defined as a condition in which an individual or household lacks the financial resources to afford a basic minimum standard of living.
  • Reliable estimation of poverty is the first step towards eradication of poverty as it provides input for the design, implementation and monitoring of anti- poverty programmes.
  • Two critical components of the estimation of poverty in India:
    • Information on the consumption expenditures;
    • These expenditures are evaluated with reference to a given poverty line.
  • In 2011, 21.9% of Indians were considered to be living below the national poverty line.
  • Globally, 8% lived on less than the international poverty line (WB) of US$1.90 per person per day.
  • Issues with estimates of poverty in India:
  • Vary in a wide range: From as high as 35% of India’s population in 2017-18 (by S. Subramanian) to a low of 1.4% (by Bhalla, Bhasin and Virmani) found for 2019-20.
  • No clear conclusion/consensus on whether poverty rose after 2011-12 or fell.
  • Why do these differences arise?
  • Due to varying consumption expenditure data used.
    • A modified version of data (by Bhalla) from the Consumer Pyramid Household Survey (CME) shows that poverty has declined in India.
    • While the National Statistical Office (NSO) data (by S. Subramanian) that poverty increased in India.
    • The only consumption expenditure survey conducted by NSO in 2017-18 was abandoned.
  • Due to different poverty lines used:
    • The consumption aggregates from the PLFS estimate poverty at 17.9% in 2020-21, compared with 21.9% in 2011-12.
    • The latest (Panagariya and More) report a poverty ratio of 32% in 2019-20 and 26% in 2020-21 using the same PLFS consumption data.

Good news for India:

  • A consumption expenditure survey is currently underway.
  • This will update the national accounts and inflation indices.


  • The new methodology adopted: The absence of a comparable survey means it won’t help answer what happened to poverty after 2011-12.
  • No public discussion on the new methodology.


The discourse on poverty estimation has played an important role in highlighting the living conditions of the poor and the effectiveness of government policy. Thus, the adoption of a scientific methodology that will generate uniform-error-free data is the need of the hour.

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