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CONCEPT OF POVERTY LINE
Meaning: The poverty Line is a cut-off point on the line of distribution, which usually divides the population of the country into poor and non-poor.
- The concept of the poverty line is used to measure the extent of poverty in a country.
- People having income below the poverty line are called "Poor; and.
- People with income above the poverty line are called "Non-Poor".
- Poverty line tries to capture the socially acceptable minimum living standards, which the society tries to fulfill.
Determination of Poverty Line in India
- In India, the "Monthly Per Capita Expenditure or MPCE" method is used to determine the poverty line. According to this method, the monetary value (per capita expenditure) of the minimum calorie intake is calculated.
- Minimum Calorie Intake: The Planning Commission has defined the poverty line based on recommended nutritional requirements of 2400 calories per person per day for rural areas and 2100 calories per person per day in urban areas. Higher calorie intake has been fixed for rural areas because the rural worker has to do greater physical work as compared to the urban worker.
- The monetary value of minimum calorie intake: According to the Planning Commission (Tendulkar Methodology), the minimum Monthly Per Capita Consumption Expenditure (MPCE) in 2011-12 is worked out to be 816 per person in rural areas and 1,000 in urban areas.
- Poverty Line Divides the Poor from the Non-Poor: There are many kinds of poor; the poor, the very poor and the poor. Similarly, there are various kinds of non-poor: the middle class, the upper-middle class, the rich, the very rich and the absolutely rich. The poverty line divides the poor from the non-poor.
