Question

What is the poverty line in India and how many people live below that figure?

Answer 1

Hint:More than a twenty five percent of the population living in rural areas of India is below the poverty line.
According to the Tendulkar poverty line 7% of the people are living in poverty in India. In urban areas about 13.7% of the population are living below the poverty line.

Complete answer:
The government of India uses the poverty line as a benchmark to indicate economic disadvantage and to identify individuals and households who are in need of government assistance and aid. Various parameters are used to determine the poverty line which vary from state to state and within states.
The income or consumption levels is used as a general method to estimate poverty level in India and if the income or consumption falls below a given threshold level, then the household is said to be Below the Poverty Line (BPL).
NITI Aayog’s task force is responsible for poverty estimation in India. The task force uses the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation for poverty estimation (MOSPI). Earlier the Planning Commission was responsible for calculating the poverty line in India which was replaced by NITI Aayog. The number of people in India living below the poverty line is 8.4 crore in 2017.

Note:Consumption expenditure is used for poverty line estimation in India not the income levels because of the following reasons:
- Income of self-employed people, daily wage labourers etc. is highly variable both temporarily and spatially, while consumption pattern is much stable than income level.
- Even in the case of regular wage earners, they also earn additional side incomes, which is difficult to take into account.
- Data Collection: In case of consumption based poverty line, sample based surveys use a reference period in which households are asked about their consumption of the last 30 days and is taken as the representative of general consumption.