Poverty Line


 
 
Concept Explanation
 

Poverty Line

Poverty Line: Poverty line is an imaginary line used by any country to determine its poverty. It is considered appropriate by a country according to its existing social norms. It varies from time to time, place to place and country to country. The most common method of determining poverty is income or consumption levels i.e. people will be considered poor if their income or consumption level falls below a given ‘minimum level’ (poverty line) necessary to fulfill the basic needs.

Poverty Line Estimation in India: In India, a subsistence level or minimum level of food requirement (as determined by its calorific value), clothing, footwear, fuel, lighting, educational and medical requirements, etc are determined for estimating the poverty line. Since in rural and urban areas, the nature of work and the prices of goods are different, the calorific requirement and expenditure per capita are also different. The money value required for buying these calorie requirements (given in the last column) in terms of foodgrains and other items is revised periodically based on rise in prices of these goods. In urban areas, the prices of essential items is higher when compared to the rural areas and so, the poverty line is higher despite having low calorific requirement per day.

Organisations Involved in Estimating Poverty Line: Surveys for determining poverty line are carried out by the National Sample Survey Organisation (NSSO). It is an organisation under the Ministry of Statistics and Programme Implementation of the Government of India. It conducts surveys at the interval of 5 years. It is the largest organisation in India conducting regular socio-economic surveys. It was established in 1950. For determining the poverty line in various countries and for their comparison, international organisations like the World Bank use a uniform standard method. As per this method, the poverty line is level of minimum availability of the equivalent of $1 per person per day.

 
 


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