Poverty is a social phenomenon where few sections of society is unable to live sustainable life. Planning Commission(now NITI Aayog) is the aithoriy, which publishes the poverty estimates based on various rounds of National Sample Survey Organization (NSSO) on monthly per capita consumption expenditure. In India the poverty line is defined on the basis of calories a day has been fixed for urban areas and 2400 calories in rural areas.

Universal Recall Period, consumption data for all items are collected for a 30 day recall period.

Causes of Rural Poverty:-

• Rapid population growth.

• Lack of capital.

• Lack of alternative employment opportunities other than agriculture.

• Excessive population pressure on agriculture.

• Illiteracy

• Regional disparities

• Joint family system

• Child marriage

• Lack of proper implementation of PDS ( Public Distribution System).

Causes of Urban Poverty:-

• Migration from rural areas.

• Lack of skilled labor.

• Lack of housing facilities.

• Limited job opportunities in cities.

• Lack of vocational training.

Poverty and its Study in India:- Various economists and organizations have studied the extent of poverty in India. Some of them are as follow:

Dandekar and Rath’s study of poverty in India:- Dr. VM Dandekar and Mr. Nilkantha Rath estimated the value of the diet with 2250 calories as the desired lowest level of nutrition.

Montek Singh Ahluwalia’s study of Rural poverty:- MS Ahulawalia studied the trends in incidence of rural poverty in India for the period 1956-57 to 1973-74. He used the concept of the poverty line, i.e. an expenditure level of rupees 15 in 196-61 for rural areas and rupees 20 per person for urban areas.

Estimate Poverty by the Seventh Finance Commission 1978:- The Seventh Finance Commission attempted to have a more inclusive concept of the poverty line. Since the NSS data cover the only household consumer expenditure, thus to get a more inclusive measure of welfare or deprivation, an estimate of the benefit of public expenditure was added to the private consumer expenditure norm for calculating the augmented poverty line.

Tendulkar Committee Report:- This committee moved away from just calorie criterion definition to a broader definition of poverty that also includes expenditure on health, education, clothing expenditures in addition to food. According to this report, 41.8% population in rural areas and 25.7% population in urban areas were living below the poverty line.

Rangarajan Report on Poverty:- The expert group under the Chairmanship of Dr. C Ranganrajan to review the methodology for measurement of poverty in the country constituted by the Planning Commission in June 2012 has submitted its report on 30th June 2014. The report retained consumption expenditure measures of NSSO as the basis for specifying poverty. Based on this, it pegged the total number of poor in India at 363 million or 29.6% of the population. This is higher than 269.8 million poor people or 21.9% pegged by the Suresh Tendulkar Committee.

Highlights of the Report:-

• The daily per capita expenditure is pegged at rupees 32 for rural areas and rupees 47 for urban areas.

• Poverty line based on the average monthly per capita expenditure is pegged at rupees 972 for rural areas and rupees 1047 for urban areas.