Describe How The Poverty Line Is Estimated In India

Today we are going to discuss a very important topic which is how the poverty line is estimated in India. What are the characteristics of poverty life in India and across the world? Which are the method to estimate the poverty line across the world and India? We will also discuss many other aspects of the poverty line. Also, like to mention here that the details provided here in this post are based on the data and research published by Niti Ayog in 2021.

Describe How The Poverty line is Estimated in India

In India, the poverty line is estimated using various methods which may or may not relate to each other, and the estimation process has evolved over the years. In the coming part of our post, we will discuss these methods of estimation one by one.

The poverty line is an estimate to define the capacity of an individual to spend on himself (and his dependents) which is the minimum level one must spend just to survive. If one is able to spend ( or consume) this minimum threshold, the individual is known to be living above the poverty line and if not, then he or she is called to live below the poverty line or  BPL in short.

India has shown tremendous growth over the last two decades and is among the world’s fastest-growing economies along with China. The Indian government has been able to a large number of people out of the poverty line but still, it is the home of most people living below the poverty line.

Describe How The Poverty Line Is Estimated In India

As per the report of the World Bank published in 2018-19, India was on its way to lift its entire population from extreme poverty by 2022. But then the COVID-19 outbreak has taken the plans for a toss. Infect poverty and the unemployment growth rate have been at the highest for many years.

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Many people have lost jobs and hence fall back into the below-poverty line region. In the remaining part of this post, we would be able to identify on Describe how the poverty line is estimated in India.

The Indian government has been instrumental in providing food for the needy and allocated nearly 200n Lakh metric tons of grains for disadvantaged people. As of date almost all of the allocated grains have been distributed across PAN India.

Indian government along with the state government, has also initiated various housing schemes which give the people living below the poverty line a free house and to date provides free houses to millions of people across the country.

In spite of efforts by the Indian government and state governments, Still, 25% of India’s population is still living under the poverty line and failed to fulfil their basic needs of living. If you look at the absolute numbers the same figure would be approx 40 crore (400,000,000) people still living below the poverty line and struggling even for basic needs. In the global ranking of poorest county India is in 66th position across the universe. Hence a lot of efforts are still to be made to change the lifestyle of the public.

Describe How The Poverty Line Is Estimated In India

United Nations has also defined a threshold level for those Below Poverty Line; however is it worth noting that the methods that are applicable for one country may not able applicable to another country because of the money inflations, and social and economic conditions. In the remaining part of the post, we will discuss about our topic of Describe How The Poverty Line Is Estimated In India.

Methods For Estimating the Poverty Line In India

Now lets us come to the point of methods for identifying if an individual is living below or not. There are various methods for it across the world, but the limit of expenditure that may be true for the United States may be a great living standard here in India. There we should be adhering to the standard methods applicable in India. You might sometimes be asked to explain the two methods to estimate the poverty line.

There are various methods for deciding the poverty line in India; however, we would be concentrating mainly on two methods, the monetary expenditure value method and the calorie consumption count method.

The primary method used to calculate the poverty line in India is based on the recommendations of the Expert Group on Estimation of Proportion and Number of Poor, which was chaired by Dr. C. Rangarajan and submitted its report in 2014. Here’s an overview of the process:

Monetary Expenditure Value Method

In the Monetary expenditure value method of estimating the poverty line, we estimate the level of an individual with the amount of money one should spend for a minimum living standard on mandatory items that are needed for living, for example, food, drinking water, clothes, and home. The same is different for urban as well as rural.

As per the latest notification by Niti Ayog, for rural areas, the poverty line threshold is Rs 972 whereas for Urban areas this is Rs 1407 per month. Hence if an individual is not able to do the expanse of Rs 972 in rural areas (and Rs 1407 in Urban Areas), that individual is said to be a line under the poverty line or below the poverty line.

Calorie Consumption Count Method

In the calorie consumption count method, the poverty line is assumed basis the calorie count one should consume to have a minimum healthy life. As in the case above in the monetary expenditure value method, the value is different for both Urban and Rural areas basis the lifestyle of individuals.

For the rural areas, the Calorie Consumption Count is 2400 kcal whereas for the urban areas, the same is 2100 kcal. The difference is understood also as the rural population has gone through hardship in their daily life and hence needed high calories count.

One thing to be noted is that this monetary range is variable with time; however, the calorie consumption count method is likely to be stable. The reason is because of the money inflation the value of Rs will be variable, whereas the minimum calories count for food consumption will remain constant. Hope by now we are well versed with our initial query of Describe How The Poverty Line Is Estimated In India

Distribution of People Living under the Poverty Line in India

There is an uneven distribution of people living under BPL across the states, for example, Kerala has registered the lowest number of people living below the poverty line, and only 0.71% of Kerala people live below the poverty line. Also, the Kottayam district of Kerala has the first district across India which is BPL Free. Interestingly, Kerala also has a 100% literacy rate, which shows a clear inverse correlation between poverty and education. Describe How The Poverty Line Is Estimated In India Has a direct link with Education.

Hence governments across the state are putting efforts into making the people educated and this will help in taking them out of poverty as educated people will have more opportunities for jobs and work.

On the same line, Bihar is considered to be the poorest state in India with approximately 52% of the people living below the poverty line in Bihar.

Describe How The Poverty Line Is Estimated In India

Summary on Describe How Poverty Line is Estimated in India

In this post, we have tried to describe the Poverty Line & how it is Estimated In India. If we have to summarize the entire post in a few lines, the crux would be that the Indian government is working hard with state governments to ensure a better lifestyle for individuals. BPL(Below Poverty Line) is a relative term that signifies the minimum expenditure one needs to do on food, clean water, clothes, and house. The other method of measuring this below the poverty line is the minimum calorie intake one has to take in order to survive. More on Poverty Line Estimation can be read here.

The threshold is varied and updated continuously over the years. The same is different for rural and urban areas. Governments are providing various schemes so that the lifestyle of each and every individual can be improved.


Here are a few of the FAQs pertaining to the poverty line estimation in India-

Discuss the major reasons for poverty in India.

Lack of education is the primary reason for poverty in India. The same can be understood with the example of Kerala. Kerala has a 100% literacy rate whereas it has the lowest BPL % (only 0.71%) across India.

Explain two methods to estimate the poverty line in India in class 9 questions.

The primary two methods for estimating the poverty line in India are the monetary expenditure value method and Calorie Consumption Count Method.

What is the poverty line?

A Poverty line is an imaginary situation where an Individual is not even able to do minimum expenditure on food, water, clothes, and housing, which are needed for survival.

Who are the Poorest of the Poor?

As per the data and different research Women, children & old people are often considered as the poorest of the poor in society. The reason is that poor family they will have a lesser chance of having equal access to the resources available in that particular family.

How poverty line is estimated periodically in Class 9?

Poverty line estimation methods are mentioned above. However, out of the two mentioned methods, the monetary expenditure value method changes frequently whereas Calorie Consumption Count Method is most likely to stay as per the current for a long time to come, as the food required to live or to survive will be the same in coming times also.

What are the two methods of estimating the poverty line class 9?

There are two methods for estimating the poverty line (1) Monetary Expenditure Value Method & (2) Calorie Consumption Count Method. Both of the methods are mentioned in detail in the above post.

What is BPL?

BPL is the abbreviation of the below-poverty line. The poverty line estimation method is mentioned in the post above, in detail.

Which is the poorest state in India?

Bihar is considered the poorest state in India as approximately 52% of its population is living under the poverty line. Bihar (51.91%), Jharkhand (42.16%), Uttar Pradesh (37.79%), Madhya Pradesh (36.65%), and both Meghalaya & Assam (32.67%) are the poorest state of India (BPL Population is written in Bracket)

Hope the above post on Poverty will be able to answer our question on Describe How The Poverty Line Is Estimated In India. However, we urge you to kindly let us know in the comment section if any other questions are still unanswered.

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