India needs a new poverty line estimate, says EAC-PM chairman Bibek Debroy

Bibek Debroy, the chairman of Economic Advisory Council to the Prime Minister

India needs a new estimate of poverty going forward, given that the estimate given by the Tendulkar committee is over a decade old, Bibek Debroy, chairman, Economic Advisory Council to the Prime Minister said on June 19.

“We still do not have an official poverty going beyond Tendulkar and the multidimensional poverty index is not quite a poverty line. Should we now have a new poverty line, to which this (Household Consumption Expenditure Survey (HCES)) data can be applied,” Debroy said at the data user conference organised by the ministry of statistics and programme implementation in Delhi.

The current poverty line is based on the recommendations of an expert group headed by Suresh Tendulkar.

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The government also uses a multidimensional poverty index (MDPI), which calculates poverty based on 22 indicators besides income.

As per MDPI, 25 crore people exited poverty between 2015 and 2024.

Debroy also discussed the criticisms surrounding the ministry’s work and noted that the current initiatives were steps in the right direction.

“Historically, MoSPI has not been good at communicating to the world what it has done and why it has done it,” he said.

Debroy also pointed out that the new HCES data, released by the ministry earlier this month, would also help determine inequality estimates.

He highlighted that it was important to look at state-wise gini coefficients to determine inequality levels across states, as a countrywide estimate may not present the full picture.

Gini coefficient is a measure of inequality used by statisticians to determine how unequal the income or consumption is between different classes.

The methodology was used by Thomas Piketty in his paper to determine that income inequality has increased in India.

The consumption expenditure results show that consumption inequality has declined over the last decade.

Using data from HCES, which tracks consumption trends across households, Niti Aayog earlier this year had claimed that poverty had declined to 5 percent in 2022-23.

SBI Research, in its report, had pointed out that rural poverty was at 7.2 percent in 2022-23 compared with 25.7 percent in 2011-12, whereas urban poverty had declined to 4.6 percent from 13.2 percent earlier.