Question

Q. Consider the following statements with reference to categorisation of poor in India:

Which of the above given statements is/are correct?

• A.
  1 only
• B.
  2 only
• C.
  Both 1 and 2
• D.
  Neither 1 nor 2

Answer 1

The correct option is D

Neither 1 nor 2
Explanation:

In India, 21.9$\%$ of the population lives below the national poverty line in 2011
In India, the proportion of the employed population below $\$$1.90 purchasing power parity a day in 2011 is 21.2 $\%$

Statement 1 is incorrect: The Below Poverty Line (BPL) is defined as an economic benchmark used in the identification of the economically weaker people and households. BPL is set by the Government of India based on a threshold income. The households or individuals having an income below this threshold value are considered to be under the below poverty line.

Poverty line solely depends on the per capita income in India rather than the level of prices. The poverty line is the minimum income required to purchase the basic goods and services that are essential to satisfy the basic human needs. The proportion of the population that is below this poverty line is called the poverty ratio or headcount ratio.
Hence, the headcount ratio is dependent upon the poverty line and not vice-versa, rather BPL is used as a measuring rod to determine headcount ratio or poverty ratio.

Statement 2 is incorrect: In India, Niti Ayog carries out poverty estimation. It estimates the levels of poverty in the country on the basis of consumer expenditure surveys conducted by the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation, which has now been subsumed under NSO. Earlier this task of carrying out poverty estimates was done by the Planning Commission, which has been replaced by NITI AAYOG.