Purchasing Power Parity (PPP) Of $3.2 Be Made India’s Formal Poverty Line.

Why in news?

• A recent International Monetary Fund (IMF) working paper suggests that $3.2 on PPP could be made an official poverty line since India has almost eliminated extreme poverty at 51.9 PPP (defined by World Bank).
• According to the IMF paper, number of people living in extreme poverty was 0.86 per cent of the population in 2020-21 up from 0.76 per cent during 2019-20 (pandemic year).
• Suggestion assumes significance since India does not have any official poverty line.
• Last poverty estimates were released by erstwhile Planning Commission following the methodology recommended by Tendulkar Committee for 2011-12.

Poverty estimation in India

• Planning Commission Expert Group (1962) formulated separate poverty lines for rural and urban areas (Z20 and Z25 per capita per year respectively).
• Dandekar Rath (1971) defined poverty line as expenditure adequate to provide 2250 calories per day in rural and urban areas.
• Subsequently different committees — Alagh (1979), Lakdawala Committee (1993), Tendulkar Committee (2009) did the poverty estimation.
• Latest estimation was by Rangarajan committee (2014), which defined poverty line as Monthly Per Capita Expenditure of Rs. 1407 in urban areas and Rs. 972 in rural areas.