Measurement of Poverty: Pre and Post-Independent India
Pre-Independent India
Dadabhai Naoroji was the first person to debate the idea of poverty line in pre-independent India. He determined the poverty limit using the “Jail Cost of living”. To calculate the cost of an adult prisoner’s consumption, he selected items from the prisoner’s menu based on the going rate.
1. Dadabhai Naoroji referred to this expenditure as the expense of living in jail. He categorized the population into two parts, as only adults are imprisoned.
- He assumed that children made up one-third of the entire population. Only about half of them (i.e. 1/2 of 1/3 = 1/6) consumed a small portion, whereas the other half (i.e. 1/2 of 1/3 = 1/6) consumed half of an adult’s diet.
- Adults made up two-thirds of the population, and they consume a full diet.
2. Weighted Average of consumption of the three segments: The average poverty line is three-fourths of the adult jail cost of living.
Post-Independent India
Several attempts have been made to identify the number of poor in the country.
- The Planning Commission established a Study Group in 1962. This Planning Commission is now known as NITI Aayog.
- “Task Force on Projections of Minimum Needs and Effective Consumption Demand” was established in 1979.
- For the same reason, expert groups were formed in 1989 and 2005.
In addition to these organisations, various individual economists have also tried to create such a mechanism.