Poverty in India: Measurement, Causes and Alleviation
UPSC notes on poverty in India: poverty-line committees, the Multidimensional Poverty Index, causes of poverty, anti-poverty programmes and development issues.
SyllabusGS I · Poverty and developmental issues
Prerequisites: Poverty and Developmental Issues — overview · Inclusive Growth and Employment
The Hook: 13.5 Crore Out of Poverty — By Which Measure?
In July 2023 NITI Aayog released National Multidimensional Poverty Index: A Progress Review 2023. It found that the share of Indians who were multidimensionally poor fell from 24.85% in 2015-16 to 14.96% in 2019-21, and that about 13.5 crore people moved out of multidimensional poverty in those five years.
But India has had no official income poverty estimate since 2011-12. So when someone says “poverty has fallen”, the first question an examiner wants you to ask is: poverty measured how — by money, or by deprivation?
The Core Concept
Concepts of poverty
| Concept | Meaning |
|---|---|
| Absolute poverty | Inability to meet a fixed minimum — food, clothing, shelter — measured against a poverty line |
| Relative poverty | Deprivation compared with others in the same society; tied to inequality |
| Multidimensional poverty | Simultaneous deprivations in health, education and living standards |
| Capability approach (Amartya Sen) | Poverty is the deprivation of basic capabilities — the real freedom to lead a life one values — not merely low income |
| Vicious circle of poverty (Ragnar Nurkse) | Low income → low saving → low investment → low productivity → low income |
| Chronic vs transient poverty | Persistent poverty vs falling into poverty after a shock (illness, crop failure) |
How India has measured poverty
graph TD
A[Dadabhai Naoroji 1901
first poverty line estimate] --> B[Alagh Task Force 1979
calorie norm: 2400 rural, 2100 urban]
B --> C[Lakdawala 1993
State-specific lines]
C --> D[Tendulkar 2009
moves away from calorie anchor]
D --> E[Rangarajan 2014
separate rural and urban baskets]
E --> F[NITI Aayog National MPI
2021 onwards]| Committee / estimate | Key methodology | Headline estimate |
|---|---|---|
| Dadabhai Naoroji (Poverty and Un-British Rule in India, 1901) | Cost of a subsistence diet | First poverty line in India |
| Alagh Task Force (1979) | Calorie norm: 2,400 kcal (rural), 2,100 kcal (urban) per person per day | Basis of official estimates till the 1990s |
| Lakdawala Expert Group (1993) | State-specific lines; updated with CPI-AL (rural) and CPI-IW (urban) | — |
| Tendulkar Expert Group (2009) | Dropped calorie anchoring; a single poverty line basket for rural and urban; included spending on health and education; mixed reference period | 37.2% (2004-05); 21.9% (2011-12) — Rs 816 (rural) and Rs 1,000 (urban) per person per month |
| Rangarajan Expert Group (2014) | Separate rural and urban baskets; food norms on calories, proteins and fats plus essential non-food items | 29.5% (2011-12) — Rs 972 (rural) and Rs 1,407 (urban) per person per month |
The Rangarajan estimate was not formally adopted, and no official consumption-based poverty estimate has been released since 2011-12. The Household Consumption Expenditure Survey (HCES) 2022-23 reported average monthly per capita consumption expenditure (MPCE) of Rs 3,773 (rural) and Rs 6,459 (urban), reviving the debate on updating the poverty line.
International line. The World Bank’s extreme poverty line was $2.15 a day (2017 PPP)**; in 2025 it was revised to **$3.00 a day (2021 PPP).
The Multidimensional Poverty Index
The Global MPI was launched in 2010 by UNDP and the Oxford Poverty and Human Development Initiative (OPHI), using the Alkire–Foster method. It has three dimensions and ten indicators. NITI Aayog’s National MPI uses the same three dimensions but 12 indicators — it adds maternal health and bank account.
| Dimension | Indicators (National MPI) |
|---|---|
| Health | Nutrition; child and adolescent mortality; maternal health |
| Education | Years of schooling; school attendance |
| Standard of living | Cooking fuel; sanitation; drinking water; electricity; housing; assets; bank account |
| National MPI release | Finding |
|---|---|
| Baseline report (2021) | Based on NFHS-4 (2015-16) |
| Progress Review (July 2023) | 24.85% (2015-16) → 14.96% (2019-21); about 13.5 crore exited MPI poverty |
| Discussion paper (January 2024) | 29.17% (2013-14) → 11.28% (2022-23, projected); about 24.82 crore exited |
Limits of the MPI: it measures access to services (a toilet, a cooking gas connection, a bank account) rather than their use or quality; it does not capture income shocks; and the 2022-23 figure relies on projections.
Why poverty persists: causes
| Type | Causes |
|---|---|
| Structural | Unequal land ownership, low agricultural productivity, small and fragmented holdings |
| Social | Caste and gender discrimination; exclusion of SCs, STs and minorities from assets and networks |
| Economic | Informal, low-wage employment; jobs not keeping pace with growth; inflation in food prices |
| Demographic | Large households, high dependency in poorer States |
| Health | High out-of-pocket health expenditure pushes households into poverty |
| Ecological | Drought, floods, degraded commons — tribal and dryland households are most exposed |
| Governance | Leakages, exclusion errors, weak local delivery |
What the State has done
| Programme | Year | Approach |
|---|---|---|
| MGNREGA | 2005 | Legal guarantee of 100 days of wage employment per rural household per year |
| National Food Security Act | 2013 | Subsidised grain for up to 75% of the rural and 50% of the urban population; 35 kg per Antyodaya household |
| PM Garib Kalyan Anna Yojana | 2020; free grain extended for five years from January 2024 | Free foodgrains to NFSA beneficiaries |
| DAY-NRLM | 2011 (as NRLM) | Self-help groups, credit and livelihoods for rural women |
| PM Jan Dhan Yojana | 2014 | Bank accounts for the unbanked; base of the JAM trinity (Jan Dhan–Aadhaar–Mobile, Economic Survey 2014-15) |
| Ayushman Bharat PM-JAY | 2018 | Health cover of Rs 5 lakh per family per year for secondary and tertiary care |
| PM-KISAN | 2019 | Rs 6,000 a year income support to landholding farmer families |
| Aspirational Districts Programme | January 2018 | 112 districts ranked on outcome indicators; extended to 500 blocks through the Aspirational Blocks Programme (2023) |
Development issues to discuss: growth vs distribution; regional disparity (poverty concentrated in a few large States and in tribal belts); urban poverty and informality; exclusion errors in targeting; dependency vs empowerment (“freebies” vs entitlements); and the shift from schemes to rights (work, food, education).
Memory Anchors
Committee sequence: “All Lines Turn Round” → Alagh (1979) · Lakdawala (1993) · Tendulkar (2009) · Rangarajan (2014)
Two numbers for 2011-12: Tendulkar 21.9, Rangarajan 29.5 — “the richer basket gives the higher line”: Rangarajan’s fuller basket raises the poverty line and therefore the poverty ratio.
MPI extras: National MPI = Global MPI + Maternal health + Bank account → “MB makes it 12”.
One-line Mains hook: Amartya Sen’s capability approach — poverty is the lack of real freedom to live a life one values, not just the lack of income.
For Prelims
- Tendulkar (2009) dropped the calorie anchor; 2011-12 poverty 21.9%.
- Rangarajan (2014) estimated 29.5% for 2011-12.
- Alagh Task Force (1979): 2,400 kcal rural, 2,100 kcal urban.
- Global MPI: UNDP + OPHI, 2010, 10 indicators; National MPI: NITI Aayog, 12 indicators (adds maternal health and bank account).
- NITI Aayog (July 2023): MPI headcount 24.85% → 14.96% between 2015-16 and 2019-21.
- MGNREGA: 100 days per household (not per person) per year.
For Mains
- Dimensions: economic (income, jobs), social (caste, gender, tribe), spatial (State and district disparities), human development (health, education), environmental (climate shocks), governance (targeting, leakages).
- Keywords: multidimensional deprivation, capability approach, inclusive growth, exclusion error, social protection floor, graduation from poverty, JAM trinity, rights-based approach.
- Value-addition: Tendulkar and Rangarajan estimates; NITI Aayog MPI 2023; HCES 2022-23; Aspirational Districts; Sen’s capability approach; SDG 1.
- Balanced position: deprivation has fallen sharply on access indicators; the next frontier is quality of services, secure livelihoods and protection against shocks (health costs, climate).
Common Traps
In the News
- July 2023 — NITI Aayog’s MPI Progress Review: 13.5 crore exited multidimensional poverty (2015-16 to 2019-21).
- January 2024 — NITI Aayog discussion paper: 24.82 crore exited multidimensional poverty between 2013-14 and 2022-23.
- 2024 — HCES 2022-23 results released, the first all-India consumption survey since 2011-12.
Practice
Prelims
Consider the following statements about poverty estimation in India:
- The Tendulkar Expert Group moved away from anchoring the poverty line to a calorie norm.
- The Rangarajan Expert Group estimated a lower poverty ratio for 2011-12 than the Tendulkar method.
- The Alagh Task Force used different calorie norms for rural and urban areas.
Which of the statements given above is/are correct?
Solution
Statement 1 is correct. Statement 2 is incorrect — Rangarajan estimated 29.5%, higher than Tendulkar’s 21.9%. Statement 3 is correct — 2,400 kcal (rural) and 2,100 kcal (urban).
Answer: C
NITI Aayog’s National Multidimensional Poverty Index has 12 indicators, against 10 in the Global MPI. Which two indicators has it added?
Solution
Maternal health (in the health dimension) and bank account (in the standard of living dimension). The other pairs are part of the Global MPI’s ten indicators.
Answer: A
How many of the following are among the dimensions or indicators of the Multidimensional Poverty Index used by NITI Aayog?
- Years of schooling
- Child and adolescent mortality
- Sanitation
- Assets
Solution
All four are indicators: years of schooling (education), child and adolescent mortality (health), sanitation and assets (standard of living). Note what is not an indicator: income or consumption.
Answer: D
Mains
“Income poverty lines understate the reality of deprivation in India.” In this context, discuss the significance and limitations of the Multidimensional Poverty Index.
Solution
Introduction: India’s last official income poverty estimates (Tendulkar 21.9%, Rangarajan 29.5%) relate to 2011-12. NITI Aayog’s National MPI measures deprivation across health, education and living standards, finding a fall from 24.85% to 14.96% between 2015-16 and 2019-21.
Body:
- Why income lines fall short: a household may cross the line yet lack clean water, schooling or nutrition; lines are rarely updated; Sen’s capability approach.
- Significance of the MPI: captures overlapping deprivations; disaggregates by State and district; guides targeting (Aspirational Districts); aligns with SDG 1.2; adds maternal health and bank account.
- Limitations: measures access, not quality or use; ignores income volatility and shocks; relies on survey intervals and projections; equal weights are a normative choice.
Conclusion: Income and multidimensional measures are complements. A regularly updated consumption-based line, read together with the MPI, gives a fuller picture of poverty and of what policy must target next.
Quick Revision
| Point | One-liner |
|---|---|
| First estimate | Dadabhai Naoroji, 1901 |
| Alagh (1979) | 2,400 / 2,100 kcal |
| Tendulkar (2009) | No calorie anchor; 21.9% in 2011-12 |
| Rangarajan (2014) | 29.5% in 2011-12 |
| Global MPI | UNDP–OPHI, 2010, 10 indicators |
| National MPI | NITI Aayog, 12 indicators |
| MPI trend | 24.85% → 14.96% (2015-16 to 2019-21) |
| HCES 2022-23 | MPCE Rs 3,773 rural, Rs 6,459 urban |
Key Takeaways
- Know the committees in order and their methodological shifts — calorie norm, State lines, no calorie anchor, richer basket.
- The MPI measures deprivation, not income; it has fallen sharply, but quality of services and shocks remain blind spots.
- Anti-poverty policy has moved from schemes to rights and from targeting households to transforming districts.
Related Topics
- Poverty — quick revision
- Poverty — practice questions
- Social Empowerment
- Inclusive Growth and Employment
- Social Justice and Welfare Schemes
- Agriculture and Food Security