At a rally in poll-bound Madhya Pradesh on Monday, Prime Minister Narendra Modi said more than 13.5 crore Indians had escaped poverty in the last five years under the BJP-led NDA government at the Centre. As election season heats up, BJP politicians are expected to continue campaigning on its government’s poverty alleviation credentials. The Congress, during its 10 years at the Centre in the UPA government, also made similar claims on poverty reduction. In 2014, the Congress said more than 140 million people were lifted from poverty during its decade in power. But poverty has been officially measured only a handful of times since Independence, and its definition – at what rupee-value the poverty line is set – and how the population living in poverty is counted have been debated by a series of government committees and academics over the years. Five official committees have so far estimated the number of people living in poverty in India. Since 2021, India has abandoned the poverty line measure to opt for the Multidimensional Poverty Index. The changing definitions and measurement methods have meant that it is difficult to track the prevalence of poverty over time and make comparisons across government tenures. A look at how poverty has been measured in India – under the UPA and NDA governments. How poverty is measured In 1962, a government working group made the first attempt to set a poverty line using the Indian Council of Medical Research’s recommendation for a balanced diet. Expenditure on healthcare or education was not considered since it was assumed those services would be provided by the government. The first poverty line, though not official but widely used by the government, was set at Rs 20 and Rs 25 per person per month for rural and urban areas, respectively. In 1971, an independent study by economists V N Dandekar and N Rath set the poverty line at the minimum expenditure required to provide 2,250 calories per day. Minimum calorie consumption went on to become the basis of future poverty line calculations. Dandekar and Rath set the poverty line at Rs 15 and Rs 22.5 per person per day in rural and urban areas, respectively. India began officially counting the population living in poverty after the Y K Alagh Task Force established a poverty line in 1979. Using average calorie allowances depending on age, gender, and occupation, the daily minimum calorie requirements were set at 2,400 calories in rural areas and 2,100 calories in urban areas. Based on the 1973-74 prices, the poverty line was Rs 49.09 and Rs 56.64 per person per month in rural and urban areas, respectively. In 1993, though the D T Lakdawala Expert Group’s report did not redefine the poverty line, it created a separate line for each state using regional consumer price indices to calculate the value of a basket of goods that reflected the consumption patterns of poor households. In 2009, the Tendulkar Expert Group recommended moving away from the minimum calorie norms to instead target nutritional outcomes, adding private expenditure on healthcare and education, and using a more accurate and granular method of data collection. The poverty line was set at a daily minimum expenditure of Rs 26 and Rs 32 per person in rural and urban areas, respectively. In 2014, the Rangarajan Committee revised the Tendulkar poverty line by creating separate consumption baskets for rural and urban areas, including food items that ensure recommended calorie, protein and fat intake and non-food items like clothing, education, health, housing and transport. The daily per capita expenditure was raised to Rs 47 and Rs 32 for urban and rural areas, respectively, at 2011-12 prices. However, the poverty line has come under repeated criticism for inadequately measuring the minimum standard of living, with calorie intake as the primary basis. Studies found that many households that were above the poverty line in terms of expenditure were still unable to fulfill the minimum calorie requirements. Such a poverty line, it was said, not only fails to account for regional differences, but it also does not address the ‘multidimensional’ nature of poverty and its impacts. In 2010, the United Nations Development Programme and the Oxford Poverty and Human Development Initiative created the Multidimensional Poverty Index (MPI), which measures “acute deprivations in health, education, and living standards that a person faces simultaneously” in addition to income and expenditure levels. It includes outcome-based indicators like malnourishment, school attendance and years of schooling, and access to water, sanitation, electricity and cooking fuel. According to the global MPI, a person is considered poor if they are deprived in a third or more of these indicators. India adopted the MPI, with some modifications, in 2021. The national MPI is measured now by the NITI Aayog using National Family Health Survey (NFHS) data collected every five years. Poverty at the national level Given the different ways poverty has been measured over the years, the available data is limited and conflicting. For instance, while the NITI Aayog MPI said 53.7% (625 million) of Indians were poor in 2004-05, the global MPI put the figure at 55.1% (645 million). The Tendulkar Expert Group appeared to undercount the poor even more at 37.2% (408 million) in 2004-05. According to the national and global MPIs, about 420 million and 415 million people, respectively, escaped poverty between 2004-05 and 2019-21. As per the Tendulkar Expert Group, between 2004-05 and 2011-12, about 138 million people were lifted from poverty. Poverty under the UPA and NDA governments Under the UPA-I and UPA-II government, poverty data was collected only three times. In 2004-05, as per Tendulkar figures updated using MPI, Odisha and Bihar were the only two states where more than half the population was poor. By 2009-10, according to the Tendulkar data, only Bihar’s incidence of poverty was more than 50%. But in 2011-12, the last year under the UPA for which data is available using the Tendulkar method, no state had more than 40% poverty. Chhattisgarh, Jharkhand and Madhya Pradesh are the other large states that featured among the worst for poverty rates in these years. Arunachal Pradesh, Mizoram and Nagaland were the only states to see an increase in the poverty rate between 2004-05 and 2011-12. During this period, nine states saw poverty decline by at least 20-percentage points. After India switched to its version of the MPI, poverty data has been published for 2015-16 and 2019-21 based on the NFHS data for the corresponding years. In 2015-16, Bihar was again the only state with more than 50% of the population living in poverty. In six states, more than a third of the population was poor. In eight states and UTs, the proportion of poor people was below 5%. In the 2019-21 database, Bihar still had the highest proportion of poor people at just under 34% but it was also the only state to cross the one-third mark. Now, 23 states and UTs have less than 10% of their population living in poverty. Between 2015-16 and 2019-21, Bihar also saw the biggest decline in poverty – a reduction of 18 percentage-points. Madhya Pradesh, Uttar Pradesh and Odisha, among India’s poorer states, also saw considerable declines at around 15 percentage-points. No state has seen poverty increase in these years. There are, however, differences in the poverty rates between the NITI Aayog MPI and the global MPI owing to differing calculation methods. For most states, the global figure is higher than the national figure by less than 2 percentage-points. In Odisha though, the gap is 5 percentage-points and more than 3 percentage-points in West Bengal and Madhya Pradesh.
