Woes of Poverty Estimation

It is crucial to acknowledge the historical context of poverty measurement in India. Early efforts in the 1960s primarily focused on calorie deprivation, neglecting essential non-food items like clothing, housing, and other assets. Over time, criticism grew regarding the casual treatment of education, health, and basic amenities, especially with the withdrawal of public agencies from their provisioning. The methodology’s reliance on judgmental factors for determining the poverty basket, diverse food habits, price calculations, and the mismatch between consumption data from the National Sample Surveys (NSS) and national income accounts drew further scepticism.

We are witnessing a shift towards measuring poverty using select dimensions in line with global methodologies. However, this transition has not yet been met with enthusiastic support, and many have criticised this approach. Some even speculate that it is an attempt to discard the traditional consumption-based poverty estimation method based on NSS data, further fuelled by doubts raised by the Economic Advisory Council to the Prime Minister regarding the reliability of NSS data.