Poverty in India: concepts,measurement and status

Vasantrao Naik Marathwada Krishi Vidyapeeth, Parbani, Maharashtra State, India, Navsari Agricultural University, Navsari, Gujarat State, India

Duflo: We are not very interested in measuring poverty. Other people do this. The people of the World Bank are doing this and they have made a great deal of effort to measure the poverty level. India itself has a good approach. At the end of the day it is important not to measure poverty when trying to understand how to deal with poverty. In a sense, this is a democratic argument and everyone should have something to say. Banerjee: This is a very good question. I think many aid policies, generally social policy, are ignoring the free will of the poor. They are seen as a type of despair - you give them this, and they will take it. On the other hand, the poor are trying to live a good life under the constraints they face. As you tell them, it's a healthy food so every day there is a special kind of food - eating chick peas everyday - for example they do not do it. So you have to find out how they want to live their lives.

Poverty is usually defined in terms of relative or absolute terms. Absolute poverty measures the poverty associated with the funds needed to meet the basic needs of food, clothing, evacuation centers etc. The concept of absolute poverty does not address the broader range of quality of life issues and the overall level of social inequality. Therefore, this concept does not recognize that individuals have important social and cultural needs. This similar criticism led to the development of the concept of relative poverty. Relative poverty defines poverty related to the economic status of other members of society. If people fall short of the universal standard of living in a particular social context, they will become poor people. An important criticism of these two concepts is that they are focused on income and consumption.

Economic poverty is reflected in two different concepts: absolute poverty and relative poverty. Absolute poverty is measured by the level of income fixed between time and country. The extreme global poverty measure we discuss about global poverty is the most important example of this concept. On the other hand, the concept of relative poverty is defined by the income level that can change from country to country over time. In most cases the relative poverty of the country is measured by the median income of the same country (ie income distribution intermediary's income). It is an indicator of economic inequality as it is defined in relative terms.