{"id":69665,"date":"2025-10-21T15:32:09","date_gmt":"2025-10-21T10:02:09","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=69665"},"modified":"2025-10-24T16:45:09","modified_gmt":"2025-10-24T11:15:09","slug":"poverty-measurement-in-india-revisiting-the-rangarajan-line-and-the-shift-to-multidimensional-poverty","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/poverty-measurement-in-india-revisiting-the-rangarajan-line-and-the-shift-to-multidimensional-poverty\/","title":{"rendered":"Poverty Measurement in India &#8211; Revisiting the Rangarajan Line and the Shift to Multidimensional Poverty"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Poverty Measurement in India Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fifteen years after the C. Rangarajan Committee <\/b><span style=\"font-weight: 400;\">redefined India\u2019s poverty line, a recent study by economists from the RBI\u2019s Department of Economic and Policy Research (<\/span><b>DEPR<\/b><span style=\"font-weight: 400;\">) <\/span><b>has updated the poverty estimates for 20 major states<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Done using the<\/span><b> 2022\u201323<\/b><span style=\"font-weight: 400;\"> Household Consumption Expenditure Survey (<\/span><b>HCES<\/b><span style=\"font-weight: 400;\">), the findings reveal <\/span><b>substantial inter-state variation<\/b><span style=\"font-weight: 400;\"> and highlight the <\/span><b>transformation in India\u2019s poverty landscape.<\/b><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Background &#8211; Revisiting the Rangarajan Committee\u2019s Methodology<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The Rangarajan Committee (2014)<\/b><span style=\"font-weight: 400;\"> was set up by the erstwhile Planning Commission to review poverty measurement.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It estimated the <\/span><b>national poverty line<\/b><span style=\"font-weight: 400;\"> at \u20b9972\/month for rural areas (approx. \u20b932\/day), and \u20b91,407\/month for urban areas (~\u20b947\/day).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This placed <\/span><b>29.5% <\/b><span style=\"font-weight: 400;\">of India\u2019s population below the poverty line in 2011\u201312. <\/span><b>Since then, no government-endorsed poverty line<\/b><span style=\"font-weight: 400;\"> has been established.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Key Findings &#8211; RBI Economists Update (2022-23)<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Major State-level trends: Odisha and Bihar <\/b><span style=\"font-weight: 400;\">emerged as big movers, showing the largest poverty reduction.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Odisha:<\/b><span style=\"font-weight: 400;\"> Rural poverty (2011\u201312) &#8211; 47.8%; rural poverty (2022\u201323) &#8211; 8.6%<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bihar:<\/b><span style=\"font-weight: 400;\"> Urban poverty (2011\u201312) &#8211; 50.8%; urban poverty (2022\u201323) &#8211; 9.1%<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Kerala<\/b><span style=\"font-weight: 400;\">: Rural poverty (2011\u201312) &#8211; 7.3%; rural poverty (2022\u201323) &#8211; 1.4%<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Himachal Pradesh<\/b><span style=\"font-weight: 400;\">: Urban poverty (2011\u201312) &#8211; 8.8%; urban poverty (2022\u201323) &#8211; 2.0%<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lowest rural poverty (2022\u201323)<\/b><span style=\"font-weight: 400;\">: Himachal Pradesh (0.4%)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lowest urban poverty (2022\u201323)<\/b><span style=\"font-weight: 400;\">: Tamil Nadu (1.9%)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Highest rural and urban poverty (2022\u201323)<\/b><span style=\"font-weight: 400;\">: Chhattisgarh (25.1% &amp; 13.3%)<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Methodological Approach<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The study <\/span><b>did not use consumer price index (CPI) inflation<\/b><span style=\"font-weight: 400;\"> to adjust the 2011\u201312 lines, as the consumption baskets differ &#8211;\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Food weight:<\/b><span style=\"font-weight: 400;\"> 57% in rural PLB vs. 54% in rural CPI<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Food weight<\/b><span style=\"font-weight: 400;\">: 47% in urban PLB vs. 36% in urban CPI<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Instead, <\/span><b>a new price index <\/b><span style=\"font-weight: 400;\">was constructed matching the Rangarajan Poverty Line Basket (<\/span><b>PLB<\/b><span style=\"font-weight: 400;\">) weights to better reflect price changes.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This updated index was applied to derive state-specific poverty lines for 2022\u201323.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>The Broader Debate &#8211; Measuring Poverty in India<\/b><\/h2>\n<ul>\n<li><b>Divergent estimates:<\/b>\n<ul>\n<li><b>SBI research (using 2023\u201324 HCES data):<\/b><span style=\"font-weight: 400;\"> Rural poverty &#8211; 4.86%; urban poverty &#8211; 4.09%<\/span><\/li>\n<li><b>World Bank (2022)<\/b><span style=\"font-weight: 400;\">: Poverty in India stood at 10.2% (2019).<\/span><\/li>\n<li><b>IMF (2022):<\/b><span style=\"font-weight: 400;\"> Asserted that the poverty rate in India was a much lower 0.8% in 2019, aided by the government\u2019s food transfers.<\/span><\/li>\n<li><b>These variations<\/b><span style=\"font-weight: 400;\"> highlight the<\/span><b> sensitivity of poverty estimates to methodology<\/b><span style=\"font-weight: 400;\">, data source, and welfare accounting.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>The shift to multidimensional poverty:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Based on the global Multidimensional Poverty Index (MPI), the Indian MPI looks at poverty through three lenses\u2014<\/span><b>health, education, and standard of living.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">These are represented by <\/span><b>12 indicators<\/b><span style=\"font-weight: 400;\"> including nutrition, mortality, schooling, sanitation, electricity, assets, and bank accounts.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This shows that poverty lines are seemingly a thing of the past, and <\/span><b>poverty estimations now goes beyond just money and consumption.\u00a0<\/b><\/li>\n<li><b>NITI Aayog (2024)<\/b> <b>estimates<\/b><span style=\"font-weight: 400;\">: 24.82 crore people exited multidimensional poverty between 2013\u201314 and 2022\u201323, and MPI reduced from 29.17% to 11.28%.<\/span><\/li>\n<li><b>World Bank (2022) estimates:<\/b><span style=\"font-weight: 400;\"> India\u2019s poverty headcount ratio at 23.9% (using the $4.2\/day line for lower-middle-income countries).<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Analysis &#8211; Changing dynamics of poverty measurement:<\/b>\n<ul>\n<li><b>The Rangarajan line<\/b><span style=\"font-weight: 400;\"> provided a monetary lens, <\/span><b>focused on minimum consumption expenditure.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">The current MPI approach integrates human development factors, aligning with the <\/span><b>SDGs <\/b><span style=\"font-weight: 400;\">(Goal 1: No Poverty).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The RBI study underscores that <\/span><b>poverty reduction is not uniform<\/b><span style=\"font-weight: 400;\"> across states, reflecting disparities in growth, welfare delivery, and employment generation.<\/span><\/li>\n<li><b>Methodological issues<\/b><span style=\"font-weight: 400;\">\u2014such as updating PLBs, data gaps, and regional cost differentials\u2014remain central to India\u2019s poverty discourse.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Way Forward<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Periodic revision of poverty lines: <\/b><span style=\"font-weight: 400;\">Update the poverty line basket (PLB) to reflect changing consumption patterns and price structures.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Integration of monetary and multidimensional measures: <\/b><span style=\"font-weight: 400;\">Combine income or consumption metrics with MPI indicators for a holistic poverty assessment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Data transparency and timely surveys: <\/b><span style=\"font-weight: 400;\">Ensure regular HCES releases to enable evidence-based policymaking.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Targeted State-level interventions: <\/b><span style=\"font-weight: 400;\">Focused policies for lagging states like Chhattisgarh, Jharkhand, and Uttar Pradesh.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Leverage digital welfare platforms<\/b><span style=\"font-weight: 400;\">: Use Aadhaar-linked DBTs and social registry databases for efficient delivery of benefits.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The RBI\u2019s updated poverty estimates mark an important revival of the monetary poverty debate in India.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While the <\/span><b>Rangarajan line remains a statistical benchmark<\/b><span style=\"font-weight: 400;\">, the policy focus has decisively<\/span><b> shifted toward multidimensional poverty<\/b><span style=\"font-weight: 400;\">\u2014capturing human capabilities and access to basic services.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The remarkable decline in poverty<\/b><span style=\"font-weight: 400;\">, especially in states like Odisha and Bihar, highlights the impact of growth and welfare synergy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">But persistent disparities<\/span><b> call for region-specific and evidence-based policy frameworks <\/b><span style=\"font-weight: 400;\">to ensure inclusive and sustainable development.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/who-is-poor-updated-rangarajan-poverty-line-india-10278352\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fifteen years after the C. Rangarajan Committee redefined India\u2019s poverty line, a recent study by economists from the RBI has updated the poverty estimates for 20 major states.<\/p>\n","protected":false},"author":19,"featured_media":69993,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[3341],"class_list":{"0":"post-69665","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-poverty-measurement-in-india","9":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/69665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=69665"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/69665\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/69993"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=69665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=69665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=69665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}