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Trends in poverty, inequality UPSC NOTE

 Key Findings:

  • Poverty rates declined significantly between 2011-12 and 2022-23:

  • Rangarajan Committee lines: 29.5% to 10% (1.77% points/year decline)

  • Tendulkar Committee lines: 21.9% to 3% (1.72% points/year decline)

  • Inequality in consumption expenditure decreased:

  • Rural Gini coefficient: 0.278 to 0.269 (0.009-point decline)

  • Urban Gini coefficient: 0.358 to 0.318 (0.04-point decline)

Data Comparability Issues:

  • Unit-level data vs. fact sheet data: Estimates based on the fact sheet (averages) might differ slightly from unit-level data (more accurate).

  • Changes in reference period: The NSSO uses different recall periods for data collection.

  • MMRP (Modified Mixed Reference Period) estimates might be more accurate but not directly comparable to previous years that used MRP (Mixed Reference Period).

  • Rangarajan committee poverty lines (2009-10, 2011-12) are comparable to 2022-23 estimates (both use MMRP).

  • Changes in methodology (2022-23): More items and multiple visits might improve estimates but hinder comparability with prior years.

Measurement Issues:

  • Poverty line definition:

  • Tendulkar Committee used an urban poverty line based on calorie norms (indirectly).

  • Rangarajan Committee defined a new poverty basket with a focus on adequate nutrition and essential non-food items.

  • Public expenditure: The HCES captures limited public spending on subsidized/free items, underestimating household well-being.

Limitations:

  • No single method for measuring poverty perfectly.

  • Higher poverty line cutoff results in a higher number of people classified as poor.

Overall:

  • The data suggests a significant decline in poverty and some decrease in inequality in India between 2011-12 and 2022-23. 

  • However, data comparability issues and limitations in capturing public expenditure require consideration for a more nuanced understanding.


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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Trends in poverty, inequality UPSC NOTE
Trends in poverty, inequality UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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