Poverty in India Part - 2

This blog describes in detail what poverty is and how it is measured in India. The history of Indian poverty measurement, as well as the most recent poverty estimation in India, were also covered.

India has one of the world's fastest growing economies and is a significant emerging market. However, persistent social and economic ills like poverty, unemployment, and inequality prevent people from meeting their most basic needs and prevent them from dying with dignity. Poverty is a curse on humanity in the twenty-first century and is never justified in any way. There will be an urgent call to lift those who are struggling "below the poverty line" out of poverty at the national and international levels (BPL). These socially evil forces not only prevent people and communities from providing for their daily needs, but they also pose a significant barrier to both personal and national development. In India, poverty, inequality, and unemployment are the main three forces that prevent people from meeting their most basic needs. Beyond these significant economic factors, India's society bears witness to a number of social aspects of poverty, including grinding poverty, widening inequality, and rising unemployment.

The problems Poverty is like a plague because it affects practically all of the world's nations and has a wide range of manifestations. Poverty has more dimensions than just social ones; it also has economic, political, historical, geographic, cultural, and other facets. As a result, it is challenging to formulate a specific definition of poverty. The definition of poverty is always based on the norms of the society in which it exists. But in recent years, the definition of poverty has been improved and broadened. In order to develop an effective plan to address the underlying causes of poverty in the modern world, a clearer and more scientific definition of poverty is required. Societies have attempted a number of different attempts to define poverty. Human poverty refers to having little to eat and little to wear, whereas economic poverty refers to not being able to maintain a minimally adequate level of living. It is common to think of poverty as the inability to sustain the bare necessities for a minimum standard of living. Depending on the society, this minimal quality of living could be different. While the idea of a basic level of living is explained by biological requirements and nutritional standards. Other elements like school enrollment, protection from infant mortality and malnutrition, access to immunization and health care, opportunity for women's empowerment, general level of life, asset ownership, etc. are necessary for a modern view of poverty. Poverty is a societal phenomena that occurs when a segment of the population is unable to meet even their most basic needs. The widely accepted concept of poverty in India places more emphasis on a subsistence level of living than a decent standard of living. Absolute poverty and relative poverty are the two main categories of poverty in terms of economics. Absolute poverty is the complete lack of the necessities of life, such as food, shelter, health care, and education. It is based on the people's absolute necessities, and when those needs are not effectively met, someone is said to be poor. Thus, the term "deprivation" is used to describe the absolute form of poverty. The majority of the world's developing and impoverished nations face an extreme form of poverty, when residents struggle to meet even their most basic necessities. Based on the price of the recommended minimum calorie intake basket of food, an absolute poverty level is established. Absolute poverty is not a result of structural evil factors like inequality and deprivation. In situations of extreme poverty, the family's combined income is insufficient to buy the bare needs for even basic physical efficiency. In other words, the family's overall income is insufficient to cover even their most basic necessities.

The idea that poverty cannot be understood in any other way than its absolute form has come under intense criticism since it contradicts human physiology. Later, this criticism led to a more extensive academic discussion that conceptualized relative poverty since it typically ensures that there are enough resources to maintain a socially acceptable standard of living. Relative poverty is associated with high income nations, when people live in poverty because they are unable to support themselves or be equal to other members of society. The standard of living among the population varies greatly. It represents the severe economic hardship, despondency, and division brought by by wealth and income disparities. The level of average income affects the relative poverty line. Inequality and variations in level of life are the foundation of relative poverty. One of the negative effects of inequality is the development of relative poverty. The following is a relative definition of poverty:

Data collection procedure of NSSO

Indeed the poverty calculation uses the quinquennial National Sample Survey Organization (NSSO) data. Until 1993-94, information on consumption expenditure collected by NSSO was based on the Uniform Recall Period (URP) 30 days of all consumption items. Since 1999-2000, NSSO was started using Mixed Recall Period (MRP) for collecting information on consumption expenditure from households. Under MRP method the information on five broad items of household consumer expenditure with low frequency of purchase (low frequency items for short) namely, clothing, footwear, education, institutional medical care and durables is collected on a year-long recall basis while information on consumption expenditure on all other items is collected on the basis of a month-long recall period. In the case of URP, all information on consumption expenditure is collected on a month-long recall period basis. In other words, there are three sets of estimation of poverty lines are being prominently in uses, first set of estimation is URP collects the information all the consumption material for 365 day recall period, and with combination of URP and MRP being used to calculate the poverty separately low frequency items (clothing, footwear, durables, education and institutional health expenditure) for 365 day recall and remaining items for 30 day recall. In the 66th round (2009-10) of National Sample Survey household consumption expenditure in MRP method for food items 7- day recall period, 365- day recall period of low frequency items and 30- day recall period for the remaining items.

Both the Uniform Recall Period (which took consumption into account and collected consumer expenditure data for all items from the 30-day recall period) and the Mixed Recall Period are used to measure India's poverty (Mixed Recall Period took consumption in which the consumer expenditure data for five non-food items, namely, clothing, footwear, durable goods, education and institutional medical expenses are collected from 365-day recall period and the consumption data for the remaining items are collected from30-day recall period.). Cost of living is viewed as the primary cause of poverty.

In August 2008, the Rural Development Ministry appointed the Dr. N.C. Saxena committee in opposition to the Tendulkar committee. The New BPL criterion, which proposes the automatic inclusion of socially excluded groups and the automatic exclusion of those who are comparatively well-off, is the position advocated by this committee. The committee proposed a new score-based ranking technique and suggested that each rural and urban resident consume 2400 and 2100 calories per day, respectively, for a monthly cost of Rs. 700 and Rs. 1000. According to the committee, India had a 49.1 percent poverty rate in 2004–2005. India has a 77 percent poverty rate, according to the Arjun Sengupta committee, which was constituted by the National Commission for Enterprises in the Unorganized Sector (NCEUS). The Committee determines the poverty line using the same NSSO data and a standard of Rs. 20 per day per individual. According to World Bank estimates from 2005, 41.6% of Indians live in poverty, defined as earning less than $ 1.25 a day (PPP). Nominally, an urban region costs Rs. 21.69 per day whereas a rural location costs Rs. 14.3 per day. According to their estimates, 456 million Indians were poor. The new international poverty line for the World Bank is based on $2 per day. According to research by Abbijith Sen, even if we use the calorie norm, the percentage of Indians living in poverty is substantially higher: in urban areas, it is 80%, and in rural areas, it is 64%. This estimate is considerably more accurate than the official estimate. Both the URP and the MRP-based estimates of poverty in India use the cost of living as their primary criterion. Following are estimations of India's poverty ratio based on the URP and MRP.

The blog discussed different definitions of poverty and the distinctions between an absolute and a relative definition. Poverty, its measurement, and its technical aspects were covered in the module. Additionally, the timeline of Indian poverty measurement, which began after Independence, was covered. New estimates of poverty and their critique were also discussed.