GROUP E - Poverty line calculation in India

There are some different ways of in which the poverty line can be estimated

• If the personal income goes below, this level his or her considered below the poverty line and it is assumed that his income is not enough to fulfill their basic needs. Poverty Line is used for the measurement of the extent of poverty in a country. People who are living or have income below the poverty line are known as Poor. However, people who are living or have income above the poverty line are known as Non-poor. 

• Poverty line is to determine it by the monetary value (per capita expenditure) of the minimum calorie intake. In India, the minimum calorie intake requirement is 2,400 calories in rural areas and 2,100 calories in urban areas. The calorie limit fixed for rural areas is higher because people engage in heavy work more in rural areas than in urban areas. After fixing the calorie limit, the money expenditure necessary for this calorie intake is calculated.

• Another way to define the poverty line is based on per capita expenditure. The minimum consumption expenditure per person a month is Rs. 816 in rural areas and Rs. 1000 in urban areas. People who are not able to considered below poverty line. This is the poverty line in terms of income. But the government uses Monthly Per Capita Expenditure (MPCE) instead of income of households to identify the poor.