Determination of Poverty Line

In India, poverty is determined using Monthly Per Capita Expenditure Method. In this method, the monetary value per capita expenditure of the minimum calorie intake is calculated.

Minimum Calorie Intake: The Planning Commission of India (currently known as NITI Aayog, has used recommended nutritional requirements (2,400 calories per person per day for rural areas and 2,100 calories per person per day for urban areas) as the basis for defining the poverty line. The calorie intake for rural areas is fixed at a higher rate because the rural workers have to do more physical work as compared to the urban workers.

Monetary Value of Minimum Calorie Intake: According to NITI Aayog (Planning Commission), the minimum Monthly Per Capita Consumption Expenditure (MPCE) in the year 2011-12 was ₹816 per person in rural areas and ₹1,000 in urban areas.

Poverty Line divides the Poor from the Non-poor: The poverty line divides the poor from the non-poor. There are various kinds of poor and non-poor. Poor includes absolutely poor, very poor, and poor. However, Non-poor includes Billionaires, Millionaires, Very Rich, Rich, Upper Middle Class, Middle Class, and Not so Poor.

In order to take care of the changes in the price levels of a country, the method of calculating the poverty line is updated from time to time.

Poverty refers to a state in which an individual is unable to fulfil even the basic necessities of life. The minimum requirements include food, clothing, shelter, education, and health facilities. A nation suffers from a cycle of poverty when a large portion of the population is deprived of even the most basic necessities of life for an extended period. If the minimum needs are not fulfilled, a person has to undergo pain and suffering. Sickness and disabilities render him helpless in all aspects of life. Generation after generation person who lives in poverty grows in poverty and dies in poverty. The population either breeds or multiplies itself.