Question

How is poverty line Fixed in India?

Answer 1

Following are the important method to fix the poverty line in India :

1. In order to estimate the consumption cut-off, the private consumption expenditure is taken into consideration.
2. In case of private consumption expenditure, both food and non-food items of rural and urban areas are taken into consideration.
3. The per capita consumption of calories is considered for the food items. In case of non-food items, only socio-economic factors such as literacy level health, life expectancy, birth rate, death rate, etc., are shown. For this purpose, a Frequency distribution is constructed and class interval range denotes the level of calorie consumption. The lower class indicates lower level of calorie consumption whereas the higher class show higher range of calorie consumption.
4. Every frequency counts the number of calories belonging to the respective consumption class.
5. The Head Count Ratio is calculated to find out the percentage of poor and non-poor population for the rural and urban areas, particularly the Below Poverty Line population.