How India measures poverty

"How many Indians are poor?" is a question with several honest answers. A poverty line based on consumption gives one number; a measure based on deprivation in health, education and living standards gives another; an international line gives a third. For UPSC, you need to understand how each is built, what it shows and what it misses.

Poverty lines based on consumption

India's official approach has long been to set a poverty line — a level of monthly per capita consumption expenditure below which a person is considered poor — and then estimate how many people fall below it using household consumption surveys.

The committees

The Tendulkar estimates became the basis for official poverty figures. The government did not formally adopt the Rangarajan line.

The data problem

Consumption-based poverty estimates depend on household consumption expenditure surveys. The survey conducted in 2017–18 was not released after concerns about data quality, which left a long gap in official consumption data. New Household Consumption Expenditure Surveys were conducted in 2022–23 and 2023–24, allowing fresh estimates — but changes in survey methods make comparisons with 2011–12 difficult.

Multidimensional poverty

Income or consumption alone does not capture poverty fully. A household may have some cash but lack clean cooking fuel, sanitation or access to schooling.

The global MPI

The Global Multidimensional Poverty Index, developed by the Oxford Poverty and Human Development Initiative and UNDP, measures deprivations across health, education and living standards.

NITI Aayog's National MPI

NITI Aayog publishes a National Multidimensional Poverty Index based on data from the National Family Health Survey (NFHS). It uses 12 indicators across the three dimensions:

• Health — nutrition, child and adolescent mortality, maternal health.
• Education — years of schooling, school attendance.
• Standard of living — cooking fuel, sanitation, drinking water, electricity, housing, assets and bank accounts.

A person is considered multidimensionally poor if they are deprived in at least a third of the weighted indicators.

NITI Aayog's analysis released in early 2024 estimated that the share of the population in multidimensional poverty fell from about 29 per cent in 2013–14 to about 11 per cent in 2022–23, which it described as roughly 25 crore people moving out of multidimensional poverty over that period. Improvements in cooking fuel, sanitation, housing and bank accounts contributed significantly.

International poverty lines

The World Bank sets an international extreme poverty line based on purchasing power parity (PPP). For many years it was $1.90 and then $2.15 a day; in 2025 it was updated to $3.00 a day (in 2021 PPP terms) using new price data. The World Bank's estimates, based on India's recent consumption surveys, show a large decline in extreme poverty in India over the past decade.

Because the line, the PPP base and the survey data all change, comparisons across years must be made carefully, using consistent methods.

The debates

• Consumption versus income — India measures consumption, which is smoother and easier to survey than income, but may understate the insecurity of volatile incomes.
• The level of the line — critics argue that official lines are too low to represent a dignified life.
• Survey design and comparability — changes in questionnaires and recall periods can shift estimates.
• Multidimensional versus monetary — the MPI captures access to services, but may overstate progress if access (e.g. a gas connection) does not translate into use (e.g. regular refills).
• Vulnerability — many people just above the line can fall back into poverty after a health shock, crop failure or job loss.

Why measurement matters for policy

Poverty estimates shape:

• the targeting of welfare schemes (who counts as eligible);
• the allocation of funds between states;
• the evaluation of policy — whether programmes are working.

Better measurement — regular, credible surveys and multiple indicators — is itself a policy priority.

Practice questions

1. Prelims-type: Which survey provides the data for NITI Aayog's National MPI? Which committee's methodology produced a 21.9 per cent poverty estimate for 2011–12?
2. Mains-type (150 words): How does the multidimensional approach to poverty differ from a consumption-based poverty line?
3. Mains-type (250 words): "Poverty in India has declined, but vulnerability remains high." Discuss with reference to different measures of poverty.