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Poverty is a widespread social evil in underdeveloped countries of the world, particularly in Asia and Africa. There is no standard definition of poverty for all the countries of the world.

Poverty is defined in (1) Absolute term (2) Relative term.


Absolute Term

Relative Term

When poverty is not related to income or consumption, expenditure distribution, it is absolute poverty.

When poverty is related to the distribution of income or consumption expenditure, it is relative poverty.

To measure absolute poverty minimum

standard is laid down, like the Planning

Commission of India has laid down “Daily Calories Consumption” as cut off for poverty line.

For rural areas- 2400 calories/day

For urban areas- 2100 calories/day


Another cut off of poverty line is the per capita income.

For rural areas- 76 per capita per mth. For urban areas- 88 per capital per mth.

The concept of relative poverty is more

relevant for the developed countries.


To measure poverty in relative term, income distribution is estimated and top 5-10% is compared with the bottom 5-10% of the population to find out the extent of disparity.

Important Fact

In 1999–00,

27% – Rural

24% – Urban

Therefore, 26% of total population were below poverty line.

In 2004–05, 22% of total population were below poverty line.

Target laid down in 10th Plan:

19.3% by 2007 (Rural- 21.1% & Urban- 15.1%)

11% by 2012


The Human Devlopment Report (HDR) 2010 measures poverty in terms of a new parameter namely Multidimensional Poverty Line (MPI). MPI shows the share of population which is poor in terms of living standards, health and education. According to this, India has a poverty index of .296 with a rank of 119 out of 169 countries.

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