In his inaugural speech at an international conference on poverty held in Patna on July 20-22, Chief Minister Nitish Kumar raised some serious issues on poverty measurement. In Bihar, the numbers of poor identified by the state’s own household census significantly exceeded the estimates made by the Planning Commission, based on surveys by the National Sample Survey. The Planning Commission transfers resources to Bihar based on its own estimates. So the state’s limited resources were under pressure.

A poverty line, defined as a social norm based on per capita real income or consumption, plays a normative role, dividing the population into the poor, who don’t meet the norm, and the non-poor, who have the associated social obligation of eradicating poverty. The poverty line also serves a second role: monitoring trends in poverty and assessing poverty alleviation policies. However, any poverty line, including the official one, could serve in the monitoring, but not the normative, role.

Indian poverty lines go back to Dadabhai Naoroji’s 1876 paper on poverty. They have been anchored in a social norm, defined as “the cost of subsistence basket of goods” by Naoroji, “an irreducible minimum standard of living” by the National Planning Committee (NPC) of 1938, and “minimum level of living” by the Perspective Planning Division (PPD) of the Planning Commission in 1962.

The NPC and PPD, in defining their poverty line based on real consumption expenditure per capita, had a basket of goods in mind. All definitions, implicitly or explicitly, refer to a minimum per capita nutritional energy requirement in kilocalories per day. But none link the poverty lines rigidly to them.

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