Poverty Line Definitions and Calculations

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Questions and Answers

What is the primary determinant of whether a person is considered poor?

  • Owning assets like a car
  • Income or consumption level below a minimum threshold (correct)
  • Living in a rural area
  • Lack of educational qualification

Why does the poverty line vary between countries?

  • Social norms and levels of development differ (correct)
  • Variances in government assistance programs
  • Different countries have various currency values
  • Population density impacts poverty lines

What calorie requirement is accepted on average for rural areas in India?

  • 2100 calories per person per day
  • 2400 calories per person per day (correct)
  • 1800 calories per person per day
  • 3000 calories per person per day

What was the poverty line fixed at for urban areas in 2011-12?

<p>Rs 1000 per month (B)</p> Signup and view all the answers

How is the food requirement calculated when estimating the poverty line?

<p>Based on calorie needs multiplied by food prices (D)</p> Signup and view all the answers

Why is the monetary expenditure required higher for urban areas compared to rural areas?

<p>Prices of essential products are generally higher in urban centers (C)</p> Signup and view all the answers

How frequently is the poverty line estimated?

<p>Every five years (C)</p> Signup and view all the answers

What additional needs are considered while determining the poverty line in India?

<p>Food, clothing, fuel, and medical requirements (B)</p> Signup and view all the answers

What was the percentage of people below the poverty line in India in 2011-12?

<p>22% (D)</p> Signup and view all the answers

Which social group in India is reported to be the most vulnerable to poverty?

<p>Scheduled Castes and Scheduled Tribes (B)</p> Signup and view all the answers

What was the average annual decline in the number of poor from 2004-05 to 2011-12 in India?

<p>2.2 percentage points (C)</p> Signup and view all the answers

Why did the number of poor in India remain approximately 407 million between 1993-94 and 2004-05 despite the decline in poverty ratio?

<p>The population increased significantly. (D)</p> Signup and view all the answers

As per the content, which of the following groups had the highest percentage below the poverty line?

<p>Scheduled Tribes (A)</p> Signup and view all the answers

What was the poverty ratio in rural areas of India in 1993-94?

<p>50% (D)</p> Signup and view all the answers

Which organizations commonly use a uniform standard of $1.90 per person per day for poverty lines?

<p>International organizations like the World Bank (B)</p> Signup and view all the answers

What trend is suggested for people below the poverty line in India for the upcoming years?

<p>It may decline to less than 20%. (B)</p> Signup and view all the answers

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Flashcards

Poverty Line

The minimum income or consumption level needed to meet basic needs like food, clothing, and shelter. It varies based on time, location, and social norms.

Calorie Requirement

The amount of calories a person needs daily to maintain their health. Varies based on factors like age, sex, and activity level.

Monetary Expenditure Calculation

A method used to determine the poverty line in India. It considers essential items like food, clothing, fuel, and healthcare, and multiplies them by their prices.

Food Requirement Formula

The current formula for determining the poverty line in India focuses on fulfilling the necessary calorie requirements through food consumption.

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Periodic Poverty Line Adjustment

The poverty line is reevaluated every five years to account for rising prices and economic changes.

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Urban vs. Rural Poverty Line

The poverty line in India is higher in urban areas than in rural areas due to the increased cost of essential goods in cities.

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Example Poverty Line in Rural India

A family of five in rural India earning less than Rs. 4,080 per month in 2011-12 was considered below the poverty line.

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Example Poverty Line in Urban India

A family of five in urban India earning less than Rs. 5,000 per month in 2011-12 was considered below the poverty line.

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Why Do Poverty Lines Differ?

Different countries have different poverty lines because their costs of living, economic conditions, and social standards vary.

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Poverty Ratio vs. Number of Poor

The decline in the poverty ratio indicates that fewer people are living below the poverty line, though it may not necessarily mean that the overall number of poor people has decreased, as the number of people in general may be increasing.

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Rural vs. Urban Poverty Reduction

The socioeconomic factors that contribute to poverty can vary significantly between rural and urban populations, leading to different dynamics in poverty reduction.

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Vulnerable Groups to Poverty

Groups like Scheduled Castes and Tribes, as well as rural agricultural laborers and urban casual laborers, have a higher prevalence of poverty due to factors like discrimination, lack of access to resources, and unstable employment.

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Unequal Poverty Distribution

The poverty ratio is not evenly distributed across all social and economic groups in India. Certain groups experience higher levels of poverty due to social and economic inequalities.

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Poverty Reduction in India

The data shows a significant decrease in poverty in India, with the proportion of people below the poverty line dropping from 45% in 1993-94 to 22% in 2011-12. This trend suggests a positive movement towards poverty reduction but further efforts are crucial to address the remaining challenges.

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World Bank Poverty Standard

The World Bank utilizes a uniform standard for measuring poverty line across developing countries, based on a minimum availability of $1.90 per person per day (2011, ppp). This allows for comparisons between countries and helps track global poverty trends.

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Study Notes

Poverty Line Definitions and Variations

  • Poverty is defined as an income or consumption level below a minimum needed for basic needs.
  • This minimum varies across time and countries.
  • Countries use a specific poverty line based on their developmental level and social norms.
  • For example, lacking a car might indicate poverty in the US, but not in India, where car ownership is considered a luxury.

Calculating Poverty Lines in India

  • Criteria like food, clothing, footwear, fuel, education, and medical needs are considered.
  • These necessities are multiplied by their prices in rupees.
  • The calorie requirement is the basis of the food calculation.
  • Rural areas require 2400 calories per person per day, while urban areas require 2100 due to differing activity levels.
  • Food items like grains, pulses, vegetables, milk, and oil provide needed calories.
  • The monetary expenditure for these quantities is adjusted for price changes.
  • In 2011–12, the poverty line was ₹816 per month in rural areas and ₹1000 in urban areas. This difference is due to higher prices in urban regions.

Poverty Line Determination and Updates

  • The poverty line is estimated periodically (generally every 5 years) through sample surveys conducted by the National Sample Survey Organization (NSSO).
  • The World Bank uses a $1.90 per person per day standard for international poverty comparisons.
  • Poverty declined from 45% in 1993–94 to 22% in 2011–12.
  • The number of poor decreased from 407 million in 2004–05 to 270 million in 2011–12.
  • Despite a decrease in the poverty ratio between 1993–94 and 2004–05, the actual number of poor remained high.

Poverty and Vulnerable Groups

  • Poverty rates are unevenly distributed across social and economic groups.
  • Scheduled Castes and Scheduled Tribes have a higher proportion of poverty.
  • Rural agricultural laborers and urban casual laborers are also more vulnerable to poverty.
  • In 2011–12, 43% of Scheduled Tribes, 34% of urban casual workers, 34% of rural casual farm laborers, and 29% of Scheduled Castes fell below the poverty line.

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