Mint Quick Edit | Debroy’s right, we need a revised poverty line

The multidimensional poverty index released by Niti Aayog showed 248 million people lifted out of poverty between 2013-14 and 2022-23.
The multidimensional poverty index released by Niti Aayog showed 248 million people lifted out of poverty between 2013-14 and 2022-23.

Summary

  • EAC-PM Chairman Bibek Debroy has said India may require a new way to measure poverty. We now have new household consumption survey data, but the Tendulkar panel’s line is outdated. A revised poverty line could give us harder-to-dismiss estimates.

India may need a new way for measuring poverty that revises the thresholds set years ago by the Tendulkar panel, Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister, was cited as having said on Wednesday. His comments come amid a debate over how well India has fared on reducing poverty. 

Readings on the multidimensional poverty index (MPI) released by Niti Aayog had shown 248 million people lifted out of poverty between 2013-14 and 2022-23, but doubts over its formula led many critics to reject the claim. 

In recent years, India has lacked poverty numbers measured the standard old way—by a cut-off on one dimension derived from consumption sufficiency. While we finally have new household survey expenditure data to draw upon, applying old poverty lines to it yields a rather low poverty ratio. 

Also read: We need a bridge consumption survey to accurately analyse Indian poverty

This isn’t very meaningful today, as it reveals only extreme indigence, while a larger proportion of people probably still live in what we should consider deprivation. Debroy’s proposal, therefore, needs to be taken up. The MPI affords us a rounded view, but we also need a revised single-dimension poverty line that can give us harder-to-dismiss estimates of basic poverty.

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