Previous Year Question
Given below are two statements, one is labelled as Assertion (A) and the other as Reason (R).
Assertion (A): Poverty line differs across time and countries.
Reason (R): The basic needs of people vary across regions and overtime.
Select the correct answer from the code given below:
Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(A) is false, but (R) is true.
(A) is true, but (R) is false.
Both (A) and (R) are true and (R) is the correct explanation of (A).
Correct Answer: D
Detailed Solution
Assertion (A) is correct. The Poverty Line is the minimum income or consumption expenditure level below which individuals are classified as poor according to specified criteria. The Poverty Line may differ across countries, regions, and time periods because the cost of living, prices of goods and services, consumption requirements, and socioeconomic conditions are not identical.
Reason (R) is correct. The nature of people's basic needs and the cost of meeting them may change across regions and over time. For example, colder regions may require more warm clothing and heating for housing, while hotter regions may place greater importance on cooling and drinking water requirements. Similarly, necessary expenditure on education, healthcare, transportation, and housing may change over time.
Reason (R) correctly explains Assertion (A). Determining a Poverty Line involves assessing the availability and cost of minimum essential goods and services. When these requirements, prices, and living conditions change, the monetary value of the Poverty Line may also differ.
In India's historical poverty estimation, separate consumption expenditure thresholds were determined for rural and urban areas. According to the Tendulkar Methodology, the national-level monthly per capita consumption expenditure-based Poverty Lines in 2011–12 were ₹816 for rural areas and ₹1,000 for urban areas. These were estimates for that period, not current poverty lines.
For international comparisons, the World Bank uses international poverty lines based on Purchasing Power Parity (PPP). PPP helps compare economic values across countries by accounting for differences in prices and purchasing power.
The fundamental concept of poverty is associated with a minimum acceptable standard of living, but the quantity of resources and monetary cost required to achieve that standard may differ across locations and time periods.