Previous Year Question
Which of the following methods has/have been used to estimate poverty in India?
Head Count Ratio
Calorie intake
Household Consumption Expenditure
Per Capita Income
Select the correct answer from the codes given below.
Codes:
2 and 3
1, 2 and 3
3 only
1, 2, 3 and 4
Correct Answer: B
Detailed Solution
India's traditional official methodology for poverty estimation has primarily been based on household consumption expenditure.
At different stages, calorie norms were used to determine the poverty line, while the extent of poverty was expressed through the Head Count Ratio.
1. Head Count Ratio — Correct
The Head Count Ratio indicates the percentage of the total population living below a specified poverty line.
It can be expressed as—
Head Count Ratio = Number of persons below poverty line ÷ Total population × 100
For example, if 20 out of 100 persons are below the poverty line, the Head Count Ratio is 20%.
It measures the incidence or extent of poverty, although it does not measure how far below the poverty line a poor person lies.
2. Calorie Intake — Correct
Calorie requirements played an important role in India's earlier official poverty methodologies.
The Alagh Task Force, in particular, linked poverty-line consumption expenditure to nutritional norms of approximately 2400 kcal per person per day in rural areas and 2100 kcal per person per day in urban areas.
The calorie-based foundation also continued to influence the subsequent Lakdawala methodology.
However, the Tendulkar Committee recommended moving away from directly anchoring poverty lines to the old calorie-intake norms. Thus, calorie intake should be understood here as a historically used method.
3. Household Consumption Expenditure — Correct
For a long period, India's official monetary poverty estimates relied on data from NSS/NSSO Household Consumer Expenditure Surveys.
Household consumption expenditure was converted into measures such as Monthly Per Capita Consumption Expenditure (MPCE) and compared with the applicable poverty line.
If the relevant consumption expenditure of a person or household fell below the poverty line, it was classified as poor.
4. Per Capita Income — Incorrect
Per Capita Income is an average-income measure—
Per Capita Income = National Income ÷ Population
It does not reveal the distribution of income. Two countries or States may have similar per capita incomes but very different levels of poverty.
India's traditional official poverty-estimation methodology has relied on household consumption expenditure rather than aggregate per capita income.