Poverty in India and it's Estimation
Poverty is a curse which has plagued our land for decades and still continues to affect millions of people in our country making it home to an unbelievably large number of people living in abject poverty. Even though India's economy is continually growing, poverty is a major challenge, especially in the rural parts of the country. Poverty estimation thus becomes crucial for two main reasons - to get an idea about the success of various government schemes and to formulate new schemes to ensure elimination of poverty from the society.
Historical background: Poverty in India rose rapidly under the British Raj peaking in the 1920s. Famines and diseases caused deaths of millions of people during the late 19th and early 20th centuries. Reportedly around 6 to 10 million people died in India during 1976-1979 due to famines while another 6 to 8 million people perished in 1896-1898 famine. The Bengal famine of 1943 caused the death of around 1.5 million people due to starvation and another 2 to 3 million people due to epidemics. British taxation policies and the policies which forced the diversion of agricultural land from growing staple food crops to cash crops for export are considered to be the major reasons for the catastrophe caused by these famines.
PS-
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- Headcount refers to the percentage of population living in poverty
Post Independence poverty estimation
1950's - Minhas used calories as the basis of poverty estimation and proposed a poverty line based on annual expenditure. According to his estimates the poverty rate in India was 65% in 1956-57 and 59% in 1960.
1960's - Estimates of poverty in India varied widely in the 1960's. The studies backed by the Indian government showed that poverty remained generally constant at around 40% in the 1960's. However independent studies mostly concluded that poverty rates increased through the 1960's.
Lakdawala Committee's Poverty Estimates (1993) - Calories were used as the basis of poverty estimation, with different poverty lines being calculated for each state. A standard list of commodities were drawn up and priced in each state of the nation, using 1973–74 as a base year. This basket of goods was then re-priced each year according to the inflation.
Tendulkar Committee's Poverty Estimates (2009) - Earlier poverty lines did not consider health and education as it was assumed that they would be provided by the government. Tendulkar Committee incorporated private expenditure on health and education while estimating poverty. There were also differences in the price adjustment procedures when compared to earlier methods.
Rangarajan Committee's Poverty Estimates (2014) - The committee was set up after national outrage over the poverty line suggested by the Planning Commission. It appended Tendulkar Committee's calculations and fixed a new poverty line.
Faint brown color represents the urban data, medium brown color represents the rural data and the dark brown color represents the combined data.
Multidimensional Poverty Index (MPI):
The poverty line based approach for poverty estimation was abandoned by the NITI Aayog and the multidimensional method was adopted. The MPI is based on health, education and standard of living, where each contribute 33.33% to the index. You can read more on MPI here.
Points to note -
- The above visual is based on National Multidimensional Poverty Index baseline report by NITI Aayog, which is based on NFHS (National Family Health Survey) - 4 (2015-2016).
Statewise comparison of various dimensions in the National MPI:
Data from NFHS-4 (2015-2016) is shown in faint blue and NFHS-5 (2019-2020) provisional estimates are shown in dark blue wherever available.
Points to note -
- The criteria for the estimation of the percentage of population deprived of the respective indicators is given in the National Multidimensional Poverty Index baseline report.
Comparison of India with it's neighbors and some developed countries:
Points to note -
- Percentage of population living on less than $1.90, $3.20, $5.50 per day, international PPP dollars as of 2020 is given as per the data from World Poverty Clock. More information on PPP dollars can be found here.
- The results of Global MPI 2020 by the Oxford Poverty & Human Development Initiative (OPHI) and the United Nations Development Programme are based on estimates for surveys conducted between 2014-2019 for various developing countries. More information on Global MPI can be found here.
References -