Poverty estimates in India: Old and new methods, 2004-05

Durgesh Pathak and Srijit Mishra ()

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: This paper provides estimates of poverty and inequality across states as also for different sub-groups of population for 2004-05 by using the old and new methods of the Planning Commission. The new method is critically evaluated with the help of some existing literature and its limitations discussed with regard to doing away with calorie norm, use of median expenditure as a norm for education when the distribution is positively skewed, difficulty in reproducing results for earlier rounds acting as a constraint on comparisons, and using urban poverty ration of the old method as a starting point to decide a consumption basket. More importantly, it discusses the implications on financial transfers across states if the share of poor is only taken into account without accounting for an increase in the total number of poor. Despite these limitations, on grounds of parsimony and prudence the state-specific poverty lines suggested in the new method, as also in the old method, are used to calculate incidence, depth (intensity) and severity (inequality among poor) estimates of poverty for different sub-groups of population, viz., NSS regions, social groups and occupation groups.

Keywords: Household type (occupation groups); inequality (Gini); NSS regions; Planning Commission; poverty; rural; social groups; urban (search for similar items in EconPapers)
JEL-codes: D63 I32 I38 I39 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2011-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2011-015

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