Defining Poverty in India: From Dandekar-Rath to the Present

How do you decide who is poor? The answer seems simple until you try to measure it. In India, defining the poverty line has been one of the most contested and consequential exercises in economic policy – shaping who receives food subsidies, who qualifies for welfare programs, and how many millions are counted as deprived. From the foundational work of Dandekar and Rath in 1971 to the World Bank’s current global benchmarks, India’s approach to measuring poverty has gone through multiple revisions, each reflecting both methodological advances and intense political debate.

Before the poverty line: early attempts at measurement 🔗

Efforts to quantify poverty in India predate independence. Dadabhai Naoroji, in his landmark work Poverty and the Un-British Rule in India, proposed one of the earliest poverty lines based on the cost of a basic subsistence diet. After independence, the Planning Commission constituted a working group in 1962 that established separate poverty thresholds for rural and urban areas – Rs 20 and Rs 25 per capita per year, respectively. These were rough estimates, not grounded in systematic survey data, and they quickly revealed the need for a more rigorous framework.

The Dandekar-Rath study: India’s first systematic poverty assessment 🔗

VM Dandekar and N Rath changed the conversation in 1971. Drawing on data from the National Sample Survey (NSS) for 1960-61, they conducted what is widely recognised as the first systematic assessment of poverty in India. Their central argument was straightforward: the poverty line must be derived from the expenditure adequate to provide 2,250 calories per day, applied uniformly to both rural and urban areas. This was a significant departure from earlier approaches, which had focused on vague subsistence criteria without anchoring the threshold to nutritional data.

The calorie-based approach had an intuitive logic – if a person could not afford enough food to sustain basic physical functioning, they were, by definition, poor. Dandekar and Rath used this to estimate the share of the Indian population that could not meet this basic nutritional floor, concluding that poverty in the 1960s remained largely unchanged at around 41%. Their work generated immediate debate on the appropriate calorie norms and whether variations by age, sex, and occupation should be factored in. Despite its limitations, the Dandekar-Rath study set the methodological template for decades of poverty measurement in India.

Committees and revisions: building on the calorie framework 🔗

The Dandekar-Rath framework was refined rather than replaced through subsequent official efforts.

The Alagh Committee (1979) 🔗

The Planning Commission set up a task force under YK Alagh to formalise the poverty line for policy use. The Alagh Committee constructed separate poverty lines for rural and urban areas based on nutritional requirements and linked consumption expenditure, and recommended that future estimates be updated by adjusting for inflation. This introduced a calorie-differentiated approach: 2,400 calories per day for rural areas and 2,100 for urban areas, reflecting the greater physical labour demands in rural settings. Poverty lines were set at Rs 49.09 per capita per month for rural areas and Rs 56.64 for urban areas at 1973-74 prices.

The Lakdawala Committee (1993) 🔗

By the early 1990s, there was growing concern that the price adjustment methodology was distorting poverty estimates. The Lakdawala Committee recommended that consumption expenditure continue to be calculated on the basis of calorie consumption, but introduced state-specific poverty lines to account for regional price differences. It suggested updating these lines using the Consumer Price Index for Industrial Workers (CPI-IW) in urban areas and Consumer Price Index for Agricultural Labour (CPI-AL) in rural areas. The assumption was that these price indices adequately captured the consumption patterns of the poor – an assumption that would later come under serious criticism.

A methodological overhaul: the Tendulkar Committee (2009) 🔗

By the 2000s, several flaws in the calorie-based approach had become undeniable. Consumption patterns among the poor had changed significantly since the 1973-74 baseline, price indices were not accurately capturing regional and temporal variations, and earlier poverty lines assumed the state would fully provide for health and education – an assumption increasingly at odds with reality.

In 2005, the Planning Commission constituted an expert group under Suresh Tendulkar, which submitted its report in 2009. The committee recommended four major changes. First, it proposed a decisive shift away from calorie-based poverty estimation towards a broader consumption expenditure approach. Second, it introduced a uniform poverty line basket across rural and urban India. Third, it explicitly incorporated private expenditure on health and education into the poverty calculation. Fourth, it revised the price adjustment procedure to correct for geographical and temporal distortions.

The results were striking. Under the Tendulkar methodology, India’s poverty rate for 2004-05 was estimated at 37.2% – considerably higher than earlier official estimates. The new poverty threshold translated to Rs 816 per month (roughly Rs 27 per day) in rural areas and Rs 1,000 per month (Rs 33 per day) in urban areas. When the Planning Commission cited these figures in a Supreme Court affidavit, public reaction was swift and outraged – Rs 32 a day was widely seen as far too low a threshold to represent any meaningful standard of living. Critics pointed out that this sum could not buy even a kilogram of sugar in urban markets, let alone cover food, clothing, transport, and medical costs.

The Rangarajan Committee (2014): a higher bar 🔗

In response to widespread dissatisfaction, the Planning Commission constituted a new expert panel in 2012 under C Rangarajan, which submitted its report in 2014. The Rangarajan Committee used an independent household survey by the Centre for Monitoring Indian Economy (CMIE) rather than relying solely on NSSO data. It also introduced a different conceptual framework: a household was considered poor if it was unable to save, combining normative nutritional standards based on ICMR norms with a behavioural assessment of non-food expenditure.

The Rangarajan thresholds were significantly higher – Rs 972 per month (Rs 32 per day) in rural areas and Rs 1,407 per month (Rs 47 per day) in urban areas. Under this methodology, 454 million people (38.2% of the population) were below the poverty line in 2009-10, compared to 354 million under the Tendulkar measure for the same year. The gap between the two estimates illustrated how profoundly the choice of methodology determines the official count of the poor – and, by extension, the scale of government entitlements and welfare programs.

Who measures poverty today? 🔗

Since the dissolution of the Planning Commission and the establishment of NITI Aayog in 2015, India has not released a new official poverty line. NITI Aayog, functioning as a policy think tank rather than an implementing body, has deprioritised income-based poverty estimation in favour of the Multidimensional Poverty Index (MPI), which tracks deprivations across health, education, and living standards. The last large-scale Household Consumption Expenditure Survey was conducted by the National Sample Survey Office (NSSO) in 2022-23 after a gap of over a decade, and its results are expected to generate fresh estimates of poverty in the coming years.

India and the World Bank’s international poverty line 🔗

While India debates its domestic thresholds, global comparisons rely on the World Bank’s international poverty line, which uses Purchasing Power Parity (PPP) to make cross-country income comparisons meaningful. The World Bank periodically revises this line as new price data becomes available. In September 2022, the extreme poverty line was updated from $1.90 to $2.15 per day (in 2017 PPP terms). Most recently, in June 2025, the World Bank set the international poverty line at $3.00 per day in 2021 PPP terms.

For India specifically, the more relevant benchmark is the lower-middle-income country (LMIC) poverty line, since India falls in that classification. Under the LMIC poverty line of $4.20 per day (2021 PPP), approximately 24% of India’s population – nearly one in four people – was estimated to be poor in 2022. At the extreme poverty line of $3.00 per day, just 5.3% of India’s population falls below the threshold, reflecting decades of economic growth since 1991. However, using the upper-middle-income benchmark applied to countries like China and Mexico, more than 80% of Indians would still be counted as poor – a reminder that where you draw the line changes everything.

The deeper debate: what does the poverty line actually measure? 🔗

Across all these committees and revisions, a fundamental tension persists. A poverty line is simultaneously a statistical construct, a political instrument, and a moral statement about minimum human dignity. When set too low, it understates deprivation and shrinks the beneficiary pool for welfare programs. When set too high, it can stretch administrative capacity and fiscal resources. Critics like economist Utsa Patnaik have argued that India’s official poverty lines – even after Tendulkar’s revision – represent a serious understatement of nutritional deprivation, because price index adjustments over decades cannot capture the true rise in the cost of living.

The move towards multidimensional poverty measurement reflects a broader recognition that income and consumption alone cannot capture the full experience of poverty. A person may cross the monetary threshold but still lack access to clean water, quality education, or basic healthcare. Conversely, state provision of these services may mean that a household with low expenditure is not, in any meaningful sense, poor. India’s evolving approach to the poverty line mirrors this complexity – a country still working out, in real time, what it means to be poor and what the state owes its poorest citizens.

What do you think? Does measuring poverty purely through consumption expenditure capture what it truly means to live in deprivation in India today? And if the poverty line is set too low, who bears the real cost – the statisticians or the millions left out of welfare schemes?

References

1. https://mospi.gov.in
2. https://www.prsindia.org/tags/dandekar-and-rath
3. https://byjus.com/free-ias-prep/how-are-poor-people-identified/
4. https://launchpadeducation.in/poverty-estimation-in-india/
5. https://prepp.in/news/e-492-tendulkar-expert-group-2009-indian-economy-notes
6. https://en.wikipedia.org/wiki/Poverty_in_India
7. https://www.drishtiias.com/to-the-points/paper3/poverty-estimation-in-india
8. https://www.niti.gov.in
9. https://www.worldbank.org/en/news/factsheet/2022/05/02/fact-sheet-an-adjustment-to-global-poverty-lines
10. https://www.worldbank.org/en/news/factsheet/2025/06/05/june-2025-update-to-global-poverty-lines
11. https://www.dataforindia.com/world-bank-poverty/