---
title: "Poverty, Unemployment & Inequality: Measures"
description: "Compare how India measures poverty, unemployment and inequality—from Tendulkar and Rangarajan lines to PLFS and the Gini—and the policy architecture targeting"
url: "https://modeldiplomat.com/learn/lessons/upsc-indian-economy-poverty-unemployment-inequality-measurement-and-policy"
---

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Poverty, unemployment & inequality: measurement and policy

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# 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.

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