Report of the Study Group on the Concepts and Estimation of Poverty Line

Abstract

The 1984 report by the Planning Commission of India revises the poverty line definition for the Seventh Five-Year Plan, building on insights from previous plans and expert critiques. It establishes a dual framework using average and minimum caloric norms—2400 calories/day for rural and 2100 for urban populations, with minimum thresholds at 25% below these averages. Corresponding expenditure cut-offs define average and severe poverty, with Rs. 59.15/month (rural) and Rs. 73.51/month (urban) for average poverty, and Rs. 45.91/month (rural) and Rs. 61.20/month (urban) for severe poverty. The report advocates periodic updates using NSSO surveys and adjustments for price and consumption changes. Analysis methods include bi-variate log-normal distributions calibrated to consumption patterns, considering additional factors like clothing, education, and housing adequacy. Findings reveal that over half of rural and nearly half of urban populations fall below caloric norms, highlighting the need for targeted interventions. The report provides a comprehensive framework for measuring and updating poverty lines to improve the design and effectiveness of poverty alleviation programs in India.