Poverty in India: Measurement, Data & Government Efforts

India has made remarkable progress in reducing poverty over the past three decades — but the problem is far from solved. Measuring poverty is contested. Different methods give different numbers. And the policy debate around how to fight poverty is sharper than ever. For UPSC, poverty is tested across GS-II (social justice) and GS-III (economics). You need to know the measurement methods, key committee recommendations, current data, and the government programmes that address poverty. All of it.

What Is Poverty? Absolute vs Relative

Absolute poverty defines a minimum level of income or consumption required for basic survival — food, shelter, clothing. Those below this line are poor. This is the dominant approach in India and most developing countries.

Relative poverty defines poverty in relation to the average living standard of a society. Someone is relatively poor if they earn significantly less than the median. This is more common in developed countries.

India uses the absolute poverty approach. The question has always been: where to draw the line?

Poverty Line: The Evolution of Measurement

Pre-Tendulkar: The Alagh/Lakdawala Approach

India's first official poverty line was based on caloric norms — the minimum daily calorie intake required for a person to function (2400 kcal/day in rural areas; 2100 in urban areas). The Alagh Committee (1979) formalised this.

The Lakdawala Committee (1993) updated the method. It set poverty lines at state level based on the cost of achieving the caloric norm, using the Consumer Price Index for Agricultural Labourers (CPIAL) for rural and CPI for Industrial Workers (CPIIW) for urban.

Problem: Over time, the poverty line's value declined relative to actual consumption. By the 2000s, it was clear that the official poverty count dramatically understated the number of poor.

Tendulkar Committee (2009): The Official Revision

The Suresh Tendulkar Committee (2009) was appointed by the Planning Commission to revise the methodology. Key changes:

• Moved from a calorie-norm approach to a consumption expenditure approach
• Used monthly per capita consumption expenditure (MPCE) as the measure
• Poverty lines (2011-12): ₹816/month in rural areas; ₹1000/month in urban areas (per person)
• Estimated poverty ratio: 21.9% (2011-12) — down from 37.2% in 2004-05

The Tendulkar line was criticised for being too low — implying that someone spending ₹27 per day in rural India (in 2012 prices) was above the poverty line, which seemed unrealistically minimal.

Rangarajan Committee (2014): The Higher Estimate

The C. Rangarajan Committee (2014) proposed revised and higher poverty lines:

• Rural: ₹972/month per person
• Urban: ₹1407/month per person

Under Rangarajan, poverty incidence was estimated at 29.5% (2011-12) — significantly higher than the Tendulkar estimate for the same year. This showed how sensitive poverty counts are to where you draw the line.

The Rangarajan line has not been officially adopted as the government's poverty line. India still uses Tendulkar-based estimates for most official purposes.

Poverty Lines Summary

Multidimensional Poverty Index (MPI)

The monetary poverty line has a fundamental problem — it only measures income/consumption. But poverty is multi-dimensional. A person may be above the income poverty line but lack access to education, clean water, health care, electricity, or sanitation.

The Multidimensional Poverty Index (MPI) captures this. Developed by Sabina Alkire and James Foster at the Oxford Poverty and Human Development Initiative (OPHI) in 2010, adopted by the UNDP for its Human Development Reports.

India's MPI: NITI Aayog

NITI Aayog has developed the National MPI for India, with 12 indicators across three dimensions:

A person is considered multidimensionally poor if they are deprived in at least one-third of the weighted indicators.

India's MPI Progress

India lifted approximately 415 million people out of multidimensional poverty between 2005-06 and 2019-21 according to OPHI/UNDP data — the fastest absolute reduction globally in that period. This is a remarkable achievement.

States with significant reduction: Rajasthan, Uttar Pradesh, Bihar, Madhya Pradesh, Odisha — historically lagging states made fastest progress.

BPL: Below Poverty Line Surveys and Identification

BPL lists are used to identify households eligible for targeted government programmes (PDS, housing, scholarships, etc.). The quality of BPL identification has been a persistent problem.

Socio-Economic and Caste Census (SECC) 2011: The most recent comprehensive socioeconomic survey of rural and urban households. It uses deprivation-based criteria rather than income, to identify households for different programmes. Automatic inclusion criteria (highest priority): household is shelterless, destitute, manual scavengers, bonded labourers, primitive tribal groups. Automatic exclusion: households with motorised vehicles, refrigerators, landline phones, formal income above ₹10,000/month, etc.

The SECC data is used for the PM Awas Yojana, MGNREGA prioritisation, and other schemes.

Government Programmes: Fighting Poverty

MGNREGA: Guaranteed Employment

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 is the world’s largest employment guarantee programme. It guarantees 100 days of unskilled wage employment per year to every rural household willing to do manual work.

Impact on poverty:

• Provides income floor for the poorest households in lean agricultural seasons
• Creates durable assets (roads, ponds, irrigation channels)
• Increased rural wages — MGNREGA has acted as a de facto rural minimum wage, raising even non-MGNREGA agricultural wages
• Women's participation: ~55% of MGNREGA workers are women — the programme has been transformative for women's economic participation
• Served as a crucial safety net during COVID-19 (2020-21)

Challenges: Wage payment delays; muster roll fraud; quality of assets created; coverage doesn't reach urban poor.

PDS: The Food Safety Net

The Public Distribution System provides subsidised food grains through a network of Fair Price Shops (ration shops) across India. The National Food Security Act (NFSA), 2013 legalised entitlements:

• Priority Households: 5 kg of foodgrain per person per month at subsidised rates (₹2/kg wheat, ₹3/kg rice — effectively free under PM Garib Kalyan Anna Yojana)
• Antyodaya Anna Yojana (AAY): Poorest of the poor — 35 kg per household per month

PM Garib Kalyan Anna Yojana (PMGKAY): Launched during COVID-19 in April 2020 to provide free food grains over and above NFSA entitlements. Extended multiple times; finally merged with NFSA from January 2024 — making the regular NFSA allocation effectively free.

Coverage: ~81.35 crore (813.5 million) persons are covered under NFSA — about 67% of rural and 50% of urban population.

PM-KISAN: Income Support for Farmers

PM Kisan Samman Nidhi (PM-KISAN) provides ₹6,000 per year (in three instalments of ₹2,000) directly to farmer families. All landholding farmers are eligible. Transfers are Direct Benefit Transfers (DBT) to bank accounts.

As of 2024: Over 9 crore farmer-families receive PM-KISAN.

Housing and Sanitation

PM Awas Yojana (Rural and Urban): Subsidised housing for the poor — financial assistance for construction of pucca houses. Rural component has achieved significant coverage.

Swachh Bharat Mission: Construction of household toilets, elimination of open defecation. This has significant poverty-linkage — poor sanitation has large health costs on poor households.

Global Comparison: India and World Poverty

The World Bank uses international poverty lines:

• $2.15/day (2017 PPP): Extreme poverty
• $3.65/day: Lower-middle income poverty line
• $6.85/day: Upper-middle income poverty line

Under the $2.15/day line, India's extreme poverty has fallen sharply:

• 1990: ~45% of population
• 2011: ~21%
• 2019: ~10-12%
• 2022: ~5% (World Bank estimates)

India has contributed the largest absolute reduction in global extreme poverty of any country in the past 30 years.

But at the $3.65/day line (more relevant for India's income level), a much larger proportion — roughly 40-50% — remains poor by global standards.

Poverty: Key Debates for UPSC Mains

Income vs Multidimensional measurement: Should India use a monetary poverty line or an MPI? The MPI captures the complexity of deprivation better — but is harder to update frequently and less directly linked to policy triggers.

Targeting vs Universalism in PDS: Targeted PDS (identifying BPL households) has high exclusion errors (poor people left out because of wrong identification). Near-universal PDS (as PMGKAY effectively implemented) avoids exclusion errors but costs more. The NFSA's broad coverage is a pragmatic middle ground.

Jobless growth: India's economy has grown rapidly, but growth has not generated proportionate formal employment. This "jobless growth" means growth benefits are concentrated among capital owners and skilled workers, not the poor majority. Poverty reduction through growth alone is insufficient.

FAQ: Poverty in India

1. What is the poverty line in India according to the Tendulkar Committee? The Tendulkar Committee (2009) set the poverty line at ₹816 per month per person in rural areas and ₹1,000 per month per person in urban areas (at 2011-12 prices). This equals about ₹27/day in rural areas. Under this line, 21.9% of India's population was poor in 2011-12.

2. What is the difference between Tendulkar and Rangarajan poverty lines? The Tendulkar line uses minimum consumption expenditure based on a reference basket. The Rangarajan Committee set higher thresholds (₹972 rural, ₹1407 urban for 2011-12), giving a higher poverty estimate of 29.5% vs Tendulkar's 21.9%. Both are contested; neither is universally accepted.

3. What is Multidimensional Poverty Index (MPI)? The MPI measures poverty across three dimensions — health, education, and living standards — using 12 indicators. A person is multidimensionally poor if deprived in at least one-third of weighted indicators. India's national MPI shows remarkable improvement — from 24.85% (2015-16) to 14.96% (2019-21).

4. How has MGNREGA helped reduce poverty? MGNREGA guarantees 100 days of wage employment to rural households, providing an income floor during lean agricultural seasons. It has raised rural wages broadly, increased women's economic participation (55%+ women workers), and created rural infrastructure. It served as a crucial safety net during COVID-19.

5. How many people are covered under the PDS in India? Under the National Food Security Act (2013), approximately 81 crore (810 million) people are entitled to subsidised/free foodgrains. Under PMGKAY (now merged with NFSA), beneficiaries receive foodgrains free of cost. This is the world's largest food security programme.

Related: Unemployment in India: Types, Data & Solutions Related: MGNREGA: Objectives, Provisions & UPSC Notes Related: Green Revolution in India: Impact & Legacy