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Poverty Line



Poverty Line

Poverty line is based on the income or consumption levels. It is based on the price of basic necessities and is usually determined by the respective governments.

A person is considered poor or below ‘the poverty line’, if his or her income or consumption level falls below a given "minimum level" necessary to fulfil basic needs.


Basic needs vary from country to country and from time to time.
Each country uses an imaginary line, ‘the poverty line’, that is considered appropriate for its existing level of development and its accepted minimum social norms.

The poverty line in India will vary drastically from the poverty line in USA.

  • In USA, which is a developed nation, not having a car will be considered as being below the poverty line
  • In India, a developing nation, having a car is a luxury

This shows us that every country according to its economic status draws its own ‘poverty line’.

Now let us see the norms that determine the ‘poverty line’ in India.
A minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirements determine the poverty line in India

Poverty Line in India

Now let us see how the minimum food requirement is calculated.

(All calculations are usually done separately for rural areas and urban areas.)

  • The desired calorie requirement for an individual is first calculated
  • As the calorie requirement varies depending on age, sex and the type of work that a person does, it is calculated on an average basis.
  • Food items such as cereals, pulses, vegetable, milk, oil, and sugar are taken into consideration when the required calories are calculated.
  • Once the calorie requirement is arrived at, the amount of money required to purchase these food items is calculated.
  • Now this required amount is multiplied by the number of people in the family.
  • Then the Government sees if the total income of the family is sufficient to meet the food requirement.
  • If the family income is less than the required amount, then the family it is considered to be below the ‘poverty line’.

Similarly clothing, footwear, fuel and light, educational and medical requirement are also calculated and multiplied by their prices in rupees.

The grand total is used to determine the ‘poverty line’ as seen above in the food requirement.

As mentioned earlier, in India, the poverty line is determined separately for rural areas and urban area.

Particulars Rural Area Urban Areas
Calorie requirement 2400 calories/person/day 2100 calories/person/day
Amount required Rs 328 /month/person Rs 454 /month/person
Poverty line for a family of 5 Rs 1,640 /month Rs 2,270 /month

(A family would be considered below the poverty line if the family income is below the said amount)

The poverty line is estimated periodically once in five years, by conducting sample surveys.

These surveys are carried out by the National Sample Survey Organisation (NSSO).

The World Bank uses it own uniform standard for the poverty line , world over.

For your information :
The National Sample Survey Organisation or NSSO is an organization in the ministry of statistics of the Government of India. It is the largest surveying body in India, with a staff of round 10000.

The major activities of the NSSO pertain to Survey Design, Field Operations, Processing of data collected and releasing of the results based on surveys. It also carries out surveys on unemployment and poverty.

NSSO consists of four divisions:

1. Field Operation Division

2. Data Processing Division

3. Survey Design & Research Division

4. Coordination & Publication Division

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