Poverty and Development. Poverty-line and Programmes for eradication of Poverty in India.

The World Bank defines poverty in absolute terms. The bank defines extreme poverty as living on less than US$1.90 per day> (PPP), and moderate poverty as less than $3.10 a day. Types of Poverty Absolute poverty measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter. The concept of absolute poverty is not concerned with broader quality of life issues or with the overall level of inequality in society.

The concept of absolute poverty is based on absolute norms for living (measured in terms of consumption expenditure) laid down according: to specified minimum standard and all such individuals or groups whose consumption expenditure is found to be below this standard are classified as poor. Under the relative concept of poverty, a family (or an individual) is deemed to be poor if its level of income or consumption expenditure falls below a predetermined level.

Poverty in India is measured as the head-count ratio of the population living below the official ‘poverty line’, which is calculated using the methodology prescribed by the Expert Group on Methodology for Estimation of Poverty appointed by the Planning Commission in order to arrive at a threshold consumption level of both food and non-food items. The methodology uses the Consumer Expenditure Surveys (CES) conducted by the National Sample Survey Office (NSSO) of India once every five years to attain the poverty line; and, hence, poverty figures in India are obtained once every five years. The Planning Commission’s latest poverty line, using methodology suggested by the Tendulkar Committee in 2010, is apparently defined as the spending of Rs. 27.20 per capita per day in rural areas and Rs.33.40 per capita per day in urban areas.

Problems with measurement of poverty in India

  • Multiple indicators, depending on which agency or department is counting are used for identification of the poor
  • Divergence of official estimates of poverty ratio with the actual incidence of poverty
  • No poverty census in urban areas
  • Use of different methodologies for estimation and identification of BPL households
  • Restricting the identification of poor in states to the cap fixed by the Planning Commission
  • Variation in estimates
  • Wrong targeting of beneficiaries of welfare schemes

Non-income dimensions of poverty: Multi-dimensional poverty index

Poverty Alleviation Schemes


  • Poverty alleviation programmes can be in form of employment generation programmes or social assistance programmes so that different dimensions of poverty are addressed.
  • At present there are three centrally sponsored employment programmes in operation
    • MNREGS: Rural, wage employment
    • SGSY: Rural, self-employment
    • SJSRY: Urban, self and wage employment
    • 2006
    • Launched in 200 most backward districts in the first phase. At present 619 districts are covered under the NREGS
    • During 2008-09, 4.51 crore households were provided employment under the scheme
  • Swarnajayanti Gram Swarozgar Yojana
    • 1999 after restructuring the Integrated Rural Development Programme (IRDP) and allied programmes, viz., Development of Women and Children in Rural Areas (DWCRA), Training of Rural Youth for Self-Employment (TRYSEM), Supply of improved tool-kits to rural artisans (SITRA), Ganga Kalyan Yojana (GKY) and Million Wells Scheme (MWS)
    • Self-employment programme for rural poor
    • Objective is to bring the assisted swarozgaris above the poverty line by providing them income generating assets through bank credit and government subsidy
    • Centre: State – 75:25; 90:10 for NE states
  • Swarna Jayanti Shahari Rozgar Yojana (SJSRY)
    • It is a unified centrally sponsored scheme launched a fresh in lieu of the erstwhile urban poverty alleviation programmes, viz, Nehru Rozgar Yojana (NRY), PM’s Integrated Urban Poverty Eradication Programme (PMIUPEP), and Urban Basic Services for the Poor (UBSP)
    • Revamped in 2009
    • Self-employment + Wage employment
  • The revamped SJSRY has 5 components
    • Urban Self-Employment Programme (USEP)
    • Urban Woman Self-help Programme (UWSP)
    • Skill Training for Employment Promotion amongst urban poor (STEP-UP)
    • Urban Wage Employment Programme (UWEP)
    • Urban Community Development Network

History of poverty alleviation/employment generation programmes

Poverty and  Inclusive Growth

  • Direct relationship between aggregate poverty and average consumption
  • Growth in aggregate income is hence needed for reduction in aggregate poverty


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