36.1 crore Indians cannot afford minimum expenditure norm set by government's Rangarajan poverty line

India has more poor people than the entire population of the USA

In an editorial entitled "New Estimates of Poverty in India", Review of Agrarian Studies has taken note of a decade long silence from the Government of India on the extent of poverty as measured by consumption expenditure, a proxy for income. It underlines that the government has shifted from measuring and reporting poverty in terms of consumer expenditure to measuring poverty in terms of different aspects of living standards. The fact remains that the latter is not a substitute for the former.

It states that "the last official estimate of poverty was provided by the Planning Commission in 2013. It was based on the poverty line recommended by the Expert Group chaired by Professor Suresh Tendulkar and with data from the Consumer Expenditure Survey of 2011–12. The proportion of population that was poor was estimated to be 25.7 per cent in rural India and 13.7 per cent in urban India."

Dissatisfied with Prof. Tendulkar Group's poverty line, the Indian National Congress led United Progressive Alliance (UPA) government constituted another Expert Group under the chairmanship of C. Rangarajan. The poverty line recommended by the new Expert Group was a little higher than the Prof. Tendulkar Group's poverty line. It included expenditure on some essential non-food items in addition to expenditure on the food required for survival. The Expert Group estimated that 30.9 per cent of the rural population and 26.4 per cent of the urban population in 2011–12 fell below the poverty line.

Post 2011–12, no official data on consumer expenditure was released till early 2024. Data from the 75th round of the National Sample Survey conducted in 2017–18 was not released on grounds of poor quality. After a gap of 12 years, a Consumer Expenditure survey was conducted in August 2022–July 2023, and data was released in June 2024. 

It has come to light that because of changes in sample design, changes in items in the questionnaire, and changes in methods of data collection, the data from the latest round of Household Consumer Expenditure Survey (HCES) are not strictly comparable with data from earlier rounds. 

The editorial observes that in recent years, "the NITI Aayog has computed a Multidimensional Poverty Index (MPI) developed by the Oxford Poverty and Human Development Initiative (OPHI), an elaboration of the Human Development Index. The MPI is an index based on 12 indicators that capture deprivations in health, education, and living standards (such as the number of years of schooling, levels of child mortality, access to toilets and electricity), using data from different rounds of the National Family Health Survey (NFHS). The most recent update of the MPI, based on data from NFHS-5 conducted in 2019–21, indicates that the head count ratio of MPI in India has fallen to 14.96 from 24.85 in 2015–16." These improvements in MPI are not a substitute for measuring income poverty.

Startling figures on expenditure poverty 

The editorial draws attention towards how quarter of all Indians are below the poverty line (26.4 per cent). This estimate is drawn on unit data from the Household Consumer Expenditure Survey (HCES) 2022–23 and recalculating the Rangarajan poverty line for each State and rural-urban area, C. A. Sethu, L. T. Abhinav Surya, and C. A. Ruthu ( December 2024, Review of Agrarian Studies). 

This estimate contradicts the claim by B. V. R. Subrahmanyam, the CEO, NITI Aayog that the poverty ratio in India had fallen to below five per cent made in early 2024. 

The editorial asserts that there are 361 million Indians who cannot even afford the minimum expenditure norm set by the Rangarajan-led Expert Group. This includes 246.7 million poor persons in rural India and 114.4 million poor persons in urban India. 

It concludes that in terms of the absolute number of people in poverty, India ranks first in the world.