Does India need a new poverty line?

The discussion on whether India needs a new poverty line centers on the criteria used to measure poverty and its implications for welfare benefits. This issue addresses the adequacy of current poverty thresholds, regional economic disparities, and the capacity of statistical machinery to capture accurate data.

Poverty Thresholds in India:

• Introduction to the Issue: The poverty line in India has evolved over time, with various committees proposing different definitions based on calorie intake and non-food expenditures. The Tendulkar Committee's thresholds from 2009 and 2011 remain the official benchmarks.
• Calorie-Based Definition: Initially, poverty was measured by calorie intake, determining the income needed to consume around 2,000 calories per day. This simplistic approach was later expanded to include essential non-food expenditures.
• Committee Recommendations: The Tendulkar Committee set the poverty line at Rs 447 per month in rural areas and Rs 579 in urban areas in 2009, revised to Rs 816 and Rs 1,000 respectively in 2011. Despite subsequent recommendations from other committees, these thresholds persist.

Measuring Poverty for Welfare Transfers:

• Urban vs. Rural Perspectives: It's crucial to avoid judging poverty thresholds through an urban lens, as purchasing power varies significantly across regions. A single definition may not encompass India's economic heterogeneity.
• Relative Poverty: Poverty can be viewed as relative to societal standards. A poverty threshold could be defined as an income below a certain percentage of the median income, varying by region.
• Statistical Machinery: Accurate poverty measurement requires robust statistical tools to capture household expenditures and incomes. The absence of a recent Census hampers this effort, making it difficult to implement effective poverty measurement on the ground.

Expansive Definition of Poverty:

• Amartya Sen’s Perspective: Economist Amartya Sen's view of development emphasizes expanding people's freedoms. Poverty should be seen as a lack of agency to aspire for a better life.
• Escaping State Dependence: In India, escaping poverty often means minimizing dependence on the state by accessing private services. This includes private security, healthcare, education, and other amenities.
• Measurement of Agency: Household surveys should include questions about interactions with the bureaucracy and government services. The fewer interactions needed, the greater the indicator of prosperity and reduced poverty.

UPSC Mains Questions:

Q. Discuss the evolution of poverty thresholds in India. How do different definitions of poverty impact welfare policies and their implementation?