Poverty, unemployment & inequality: measurement and policy
How India measures poverty, unemployment and inequality—from Tendulkar/Rangarajan lines to PLFS and the Gini—and the policy architecture that targets each.
The poverty line: a contested moving target
India's official poverty estimates rest on calorie-anchored consumption baskets measured by the National Sample Survey Office's (NSSO) consumer expenditure surveys. The benchmark calorie norms—2,400 kcal per capita per day rural, 2,100 urban—were fixed by the Y.K. Alagh Task Force (1979). Successive expert groups recalibrated the methodology:
- Lakdawala Committee (1993) retained calorie norms but used state-specific poverty lines updated by the CPI-Agricultural Labourers and CPI-Industrial Workers.
- Tendulkar Committee (2009) abandoned the pure calorie anchor for a wider basket including health and education, adopted the Mixed Reference Period, and set lines that yielded 37.2% poverty in 2004-05, later revised to 21.9% for 2011-12 (₹816 rural, ₹1,000 urban monthly per capita).
- Rangarajan Committee (2014) raised the threshold (₹972 rural, ₹1,407 urban), producing 29.5% for 2011-12—roughly 93 million more poor than Tendulkar.
The government has accepted neither the Rangarajan numbers officially nor produced a fresh poverty line since, because the 2017-18 Consumer Expenditure Survey was junked over data-quality concerns. The Household Consumption Expenditure Survey (HCES) 2022-23, released in 2024, is the first comprehensive consumption dataset in over a decade.
Multidimensional poverty
The NITI Aayog National Multidimensional Poverty Index (MPI), built on the global Alkire-Foster method (Oxford OPHI and UNDP), measures deprivation across three dimensions and twelve indicators—health (nutrition, child/adolescent mortality, maternal health), education (years of schooling, attendance) and standard of living (cooking fuel, sanitation, drinking water, electricity, housing, assets, bank accounts). NITI Aayog's 2023 National MPI: A Progress Review reported multidimensional poverty falling from 24.85% (2015-16) to 14.96% (2019-21), with a claim of about 135 million escaping poverty between 2015-16 and 2019-21. A candidate must distinguish headcount ratio (proportion poor) from intensity (average deprivation among the poor); the MPI is their product (M0 = H × A).
Inequality metrics
Inequality is captured by the Lorenz curve and the Gini coefficient (0 = perfect equality, 1 = perfect inequality). India's consumption Gini is comparatively moderate (~0.32-0.36), but wealth and income Gini are far higher; the World Inequality Lab (Chancel, Piketty et al., 2024) estimated the top 1% held about 22.6% of income and 40.1% of wealth in 2022-23, the highest concentration in over a century. Retain the distinction: consumption inequality understates the disparity that income and wealth measures expose.