Poverty estimates in India : some key issues

The paper provides an overview of the methodologies used by the Indian Planning Commission in the past 30 years. Using the Planning Commission poverty line, the paper computes poverty and inequality indices from the large sample surveys of NSS consumer expenditure data and demonstrates that the intertemporal changes in the poverty ratio has been more influenced by the changes in per capita consumption rather than class distribution. Interpersonal inequality in the consumption distribution, measured by the Lorenz ratio, remained fairly stable for a pretty long period, but showed signs of decline recently. The paper dwells on the quality of data on private consumption obtained from the National Sample Surveys on household consumer expenditure vis-à-vis the private consumption expenditure in the National Accounts Statistics, particularly the recent changes in the method of data collection in the former. The paper also discusses the importance of nonincome indicators such as infant mortality rate and school enrolment in the assessment of living standards.