With the release of the first round of the Household Consumer Expenditure Survey (HCES) 2022-23, India should contemplate establishing a new poverty line, according to Bibek Debroy, Chairman of the Economic Advisory Council to the Prime Minister. Speaking at a Data Users Conference on the HCES, Debroy highlighted the absence of an official poverty line since the Tendulkar Committee’s recommendations, noting that the multidimensional poverty index is not a substitute for a poverty line. “Should we now have a new poverty line using this data?” he queried.
Historically, the now-defunct Planning Commission periodically estimated poverty lines and ratios based on the HCES data, with the last available results from 2011-12. The Tendulkar Committee, formed in December 2005, submitted its report in 2009, setting poverty lines for 2004-05. However, criticisms that the Tendulkar poverty line was too low led to the formation of the Rangarajan Committee to review the methodology. Despite this, the Planning Commission updated the 2011-12 poverty estimates using the Tendulkar methodology.
Recently, the NITI Aayog released a multidimensional poverty index showing that 250 million people moved out of poverty between 2015 and 2024. At the conference, Debroy acknowledged the improved HCES 2022-23 methodology but noted it renders comparisons with previous surveys difficult. He also questioned whether the decline in the Gini coefficient, indicating reduced inequality, is beneficial. “As the economy grows and prospers, inequality tends to widen a little bit,” he remarked. The consumption expenditure survey results indicate that inequality in India has decreased over the past decade.
