The Planning Commission has periodically estimated poverty lines and poverty ratios for each of the years for which Large Sample Surveys on Household Consumer Expenditure have been conducted by the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation. These surveys are normally conducted on quinquennial basis. The last quinquennial survey in this series was conducted in 2009-10 (NSS 66^th round). However, since 2009-10 was not a normal year because of a severe drought, the NSSO repeated the large scale survey in 2011-12 (NSS 68^th round). The summary results of this survey were released on 20^th June 2013.

 

Estimates for 2004-05 and 2009-10

 

 

2.                  The methodology for estimation of poverty followed by the Planning Commission has been based on the recommendations made by experts in the field from time to time. In December, 2005, Planning Commission constituted an Expert Group under the Chairmanship of Prof. Suresh D. Tendulkar to review the methodology for estimation of poverty. The Tendulkar Committee submitted its report in December 2009 and computed poverty lines and poverty ratios for 2004-05. For comparison they also computed poverty lines and poverty ratios for 1993-94 with identical methodology. These were accepted by the Planning Commission.

 

3.                  The next Large Sample Survey of Household Consumer Expenditure was conducted in 2009-10. Following the Tendulkar Committee methodology, Planning Commission made estimates of poverty for 2009-10 which were released through a Press Note on 19^th March 2012.¹ Since several representations were made suggesting that the Tendulkar Poverty Line was too low, the Planning Commission, in June 2012, constituted an Expert Group under the Chairmanship of Dr. C. Rangarajan to once again review the methodology for the measurement of poverty.

 

¹ Tendulkar methodology uses implicit prices derived from quantity and value data collected in household consumer expenditure surveys for computing and updating the poverty lines.

 

 

 

 

4. The Rangarajan Committee is deliberating on this issue and is expected to submit its report by middle of 2014. Since the data from the NSS 68th round (2011-12) of Household Consumer Expenditure Survey is now available, and the Rangarajan Committee recommendation will only be available a year later, the Planning Commission has updated the poverty estimates for the year 2011-12 as per the methodology recommended by Tendulkar Committee.

 

Estimates for 2011-12

 

 

5.                  The estimates of state wise poverty lines for rural and urban areas for 2011-12 are given in Table 1. The percentage and number of persons below poverty line for all States/UTs for rural areas, urban areas and combined are given in Table-2. The all India poverty ratio is obtained as state-population weighted average poverty ratio, and the all India poverty line is the per capita per month expenditure that corresponds to the all India poverty ratio.

 

6.                  The NSSO tabulates expenditure of about 1.20 lakh households. Since these households have different number of members, the NSSO for purpose of comparison divides the household expenditure by the number of members to arrive at per capita consumption expenditure per month. This is called Monthly Per Capita Consumption Expenditure (MPCE) and is computed on the basis of three different concepts: Uniform Reference Period (URP), Mixed Reference Period (MRP), and Modified Mixed Reference Period (MMRP). As per Tendulkar Methodology, the poverty line has been expressed in terms of MPCE based on Mixed Reference Period. State-wise estimates of Average Monthly Per Capita Expenditure for rural and urban areas separately for the year 2011-12 are given in Table-3.

 

7.                  For 2011-12, for rural areas the national poverty line using the Tendulkar methodology is estimated at Rs. 816 per capita per month and Rs. 1,000 per capita per month in urban areas. Thus, for a family of five, the all India poverty line in terms of consumption expenditure would amount to about Rs. 4,080 per month in rural areas and Rs. 5,000 per month in urban areas. These poverty lines would vary from State to State because of inter-state price differentials.

 

8.                  The national level poverty ratio based on comparable methodology (Tendulkar Method) for 1993-94, 2004-05 and 2011-12 estimated from Large Sample Survey of Household Consumer Expenditure data of 50^th, 61^st and 68^th round respectively are given below.

 

 

 

Percentage and Number of Poor Estimated by Tendulkar method, using Mixed Reference Period (MRP)

 

 

 

9.                  The percentage of persons below the Poverty Line in 2011-12 has been estimated as 25.7% in rural areas, 13.7% in urban areas and 21.9% for the country as a whole. The respective ratios for the rural and urban areas were 41.8% and 25.7% and 37.2% for the country as a whole in 2004-05. It was 50.1% in rural areas, 31.8% in urban areas and 45.3% for the country as a whole in 1993-94. In 2011-12, India had 270 million persons below the Tendulkar Poverty Line as compared to 407 million in 2004-05, that is a reduction of 137 million persons over the seven year period.

 

10.              During the 11-year period 1993-94 to 2004-05, the average decline in the poverty ratio was 0.74 percentage points per year. It accelerated to 2.18 percentage points per year during the 7-year period 2004-05 to 2011-12. Therefore, it can be concluded that the rate of decline in the poverty ratio during the most recent 7-year period 2004-05 to 2011-12 was about three times of that experienced in the 11-year period 1993-94 to 2004-05.

 

11.              It is important to note that although the trend decline documented above is based on the Tendulkar poverty line which is being reviewed and may be revised by the Rangarajan Committee, an increase in the poverty line will not alter the fact of a decline. While the absolute levels of poverty would be higher, the rate of decline would be similar. To illustrate the point, details about the magnitude of decline in poverty ratio at various levels above and below the Tendulkar Poverty Line are presented in Chart-1.

 

 

 

 

 

12. The decline in poverty flows from the increase in real per capita consumption. The per annum increase in real MPCE for each of the ten deciles is presented at Chart-2. The clear inference is that: (a) the real MPCE increased by much more in the second period (2004-05 to 2011-12) as compared to the first (1993-94 to 2004-05), (b) that the increase was fairly well distributed across all deciles of the population, and (c) the distribution was particularly equitable in rural areas.

 

 

 

 

 

 

*******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

State specific Poverty Lines for 2011-12

		Monthly per capita
S.No.	States	(Rs.)
		RURAL	URBAN
1	Andhra Pradesh	860	1,009
2	Arunachal Pradesh	930	1,060
3	Assam	828	1,008
4	Bihar	778	923
5	Chhattisgarh	738	849
6	Delhi	1,145	1,134
7	Goa	1,090	1,134
8	Gujarat	932	1,152
9	Haryana	1,015	1,169
10	Himachal Pradesh	913	1,064
11	Jammu & Kashmir	891	988
12	Jharkhand	748	974
13	Karnataka	902	1,089
14	Kerala	1,018	987
15	Madhya Pradesh	771	897
16	Maharashtra	967	1,126
17	Manipur	1,118	1,170
18	Meghalaya	888	1,154
19	Mizoram	1,066	1,155
20	Nagaland	1,270	1,302
21	Odisha	695	861
22	Punjab	1,054	1,155
23	Rajasthan	905	1,002
24	Sikkim	930	1,226
25	Tamil Nadu	880	937
26	Tripura	798	920
27	Uttarakhand	880	1,082
28	Uttar Pradesh	768	941
29	West Bengal	783	981
30	Puducherry	1,301	1,309
	All India	816	1,000

Note: Computed as per Tendulkar method on Mixed Reference Period (MRP)

 

 

 

 

 

 

 

 

 

 

 

 

Table 2

 

Number and Percentage of Population below poverty line by states - 2011-12 (Tendulkar Methodology)

		Rural			Urban		Total
S.No.	States	%age of		No. of	%age of	No. of	%age of		No. of
				Persons		Persons			Persons
		Persons			Persons		Persons
				(lakhs)		(lakhs)			(lakhs)
1	Andhra Pradesh	10.96		61.80	5.81	16.98	9.20		78.78
2	Arunachal Pradesh	38.93		4.25	20.33	0.66	34.67		4.91
3	Assam	33.89		92.06	20.49	9.21	31.98		101.27
4	Bihar	34.06		320.40	31.23	37.75	33.74		358.15
5	Chhattisgarh	44.61		88.90	24.75	15.22	39.93		104.11
6	Delhi	12.92		0.50	9.84	16.46	9.91		16.96
7	Goa	6.81		0.37	4.09	0.38	5.09		0.75
8	Gujarat	21.54		75.35	10.14	26.88	16.63		102.23
9	Haryana	11.64		19.42	10.28	9.41	11.16		28.83
10	Himachal Pradesh	8.48		5.29	4.33	0.30	8.06		5.59
11	Jammu & Kashmir	11.54		10.73	7.20	2.53	10.35		13.27
12	Jharkhand	40.84		104.09	24.83	20.24	36.96		124.33
13	Karnataka	24.53		92.80	15.25	36.96	20.91		129.76
14	Kerala	9.14		15.48	4.97	8.46	7.05		23.95
15	Madhya Pradesh	35.74		190.95	21.00	43.10	31.65		234.06
16	Maharashtra	24.22		150.56	9.12	47.36	17.35		197.92
17	Manipur	38.80		7.45	32.59	2.78	36.89		10.22
18	Meghalaya	12.53		3.04	9.26	0.57	11.87		3.61
19	Mizoram	35.43		1.91	6.36	0.37	20.40		2.27
20	Nagaland	19.93		2.76	16.48	1.00	18.88		3.76
21	Odisha	35.69		126.14	17.29	12.39	32.59		138.53
22	Punjab	7.66		13.35	9.24	9.82	8.26		23.18
23	Rajasthan	16.05		84.19	10.69	18.73	14.71		102.92
24	Sikkim	9.85		0.45	3.66	0.06	8.19		0.51
25	Tamil Nadu	15.83		59.23	6.54	23.40	11.28		82.63
26	Tripura	16.53		4.49	7.42	0.75	14.05		5.24
27	Uttarakhand	11.62		8.25	10.48	3.35	11.26		11.60
28	Uttar Pradesh	30.40		479.35	26.06	118.84	29.43		598.19
29	West Bengal	22.52		141.14	14.66	43.83	19.98		184.98
30	Puducherry	17.06		0.69	6.30	0.55	9.69		1.24
31	Andaman & Nicobar Islands	1.57		0.04	0.00	0.00	1.00		0.04
32	Chandigarh	1.64		0.004	22.31	2.34	21.81		2.35
33	Dadra & Nagar Haveli	62.59		1.15	15.38	0.28	39.31		1.43
34	Daman & Diu	0.00		0.00	12.62	0.26	9.86		0.26
35	Lakshadweep	0.00		0.00	3.44	0.02	2.77		0.02
	All India	25.70		2166.58	13.70	531.25	21.92		2697.83

Notes: 1. Population as on 1st March 2012 has been used for estimating number of persons below poverty line. (2011 Census population extrapolated)

2. Poverty line of Tamil Nadu has been used for Andaman and Nicobar Island.

3. Urban Poverty Line of Punjab has been used for both rural and urban areas of Chandigarh.

4. Poverty Line of Maharashtra has been used for Dadra & Nagar Haveli.

5. Poverty line of Goa has been used for Daman & Diu.

6. Poverty Line of Kerala has been used for Lakshadweep.

 

 

 

Table 3

 

State-wise estimates of Average Monthly Per Capita Expenditure (MPCE) as per Mixed Reference Period (MRP) for 2011-12

 

S.No.	States/UTs	Rural	Urban
1	Andhra Pradesh	1563.21	2559.30
2	Arunachal Pradesh	1455.87	2241.63
3	Assam	1056.98	2090.18
4	Bihar	970.41	1396.65
5	Chhattisgarh	904.04	1776.21
6	Delhi	2690.24	3160.76
7	Goa	2460.77	2934.87
8	Gujarat	1430.12	2472.49
9	Haryana	1925.96	3346.32
10	Himachal Pradesh	1800.62	3173.30
11	Jammu & Kashmir	1601.51	2320.28
12	Jharkhand	919.59	1894.41
13	Karnataka	1395.10	2898.94
14	Kerala	2355.53	3044.22
15	Madhya Pradesh	1024.14	1842.35
16	Maharashtra	1445.89	2937.06
17	Manipur	1334.55	1448.91
18	Meghalaya	1315.11	2293.82
19	Mizoram	1384.44	2426.53
20	Nagaland	1756.70	2279.42
21	Odisha	904.78	1830.33
22	Punjab	2136.39	2743.07
23	Rajasthan	1445.74	2206.93
24	Sikkim	1445.06	2528.11
25	Tamil Nadu	1570.61	2534.32
26	Tripura	1194.14	1996.66
27	Uttarakhand	1551.42	2452.02
28	Uttar Pradesh	1072.93	1942.25
29	West Bengal	1170.11	2489.89
30	A & N Island	2508.19	4439.03
31	Chandigarh	2543.57	3000.27
32	Dadra and Nagar	1094.20	2346.15
33	Daman and Diu	2239.45	2163.94
34	Lakshwadeep	2533.07	2666.49
35	Puducherry	2309.92	2959.82
	ALL INDIA	1287.17	2477.02

 

Source: NSSO Report No. KI.(68/1.0) on Key Indicators of Household Consumer Expenditure in India 2011-12, NSS 68^th round, National Sample Survey Office

 

 

Chart 1

 

Decline in poverty at various points above and below the Tendulkar Poverty Line

 

(Annualized Rate of Decline on Y-axis and the variations from Tendulkar PL on X-axis)

 

RURAL AREAS

Per annum Rate of Decline in Poverty Ratio Rural

 

2.80
2.40			2004-05 to 2011-12
2.00
Tendulkar PL
1.60
1.20
0.80			1993-94 to 2004-05
0.40
0.00
minus 50%	minus 20%	plus 10%	plus 40%	plus 70%	plus 100%

 

 

URBAN AREAS

Per annum Rate of Decline in Poverty Ratio Urban

 

2.80
2.40				2004-05 to 2011-12
Tendulkar PL
2.00
1.60
1.20
0.80				1993-94 to 2004-05
0.40
0.00
minus 50%	minus 20%	plus 10%	plus 40%	plus 70%	plus 100%

 

Chart 2

 

Increase in Real Monthly Per Capita Consumption Expenditure (MPCE) – URP Annualized – for two periods

 

(Rate of Increase in Real MPCE on Y-axis and Decile class on X-axis)

 

 

RURAL AREAS

 

 

Avg = 3.40

 

 

 

 

 

 

 

 

 

Avg = 0.85

 

 

 

 

 

 

 

 

 

 

 

URBAN AREAS

1993-94 to 2004-05

URBAN

5.0

2004-05 to 2011-12

4.5

annum increase

4.0

Avg = 3.72

3.5

3.0

Avg = 1.49

2.5

2.0

1.5

per

1.0

0.5

0.0

1st

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

Decile