What is Poverty line?

Economy and Finance

What is Poverty line?

12 Jul 2023 Zinkpot 159

Poverty line is the standard monetary income that one must have to afford the basic amenities of life, like food and housing.
If a person’s income is over the poverty line, the government considers it sufficient to cover the costs of housing, clothing, medication, food, and utility. Being poor or living below the poverty line implies that someone is officially impoverished.
The government of India uses the ‘Below Poverty Line’ as a criterion for determining economic disadvantage and identifying individuals and households in need of government help.
There are different ways in which the poverty line can be estimated in India. Some of them are as follows:
- Income method: In this method, there is a certain minimum income. If a personal income goes below this level, then he or she is considered below the poverty line and it is assumed that his income is not enough to fulfill the basic needs.
- Consumption method: A minimum nutritional food requirement is measured, and energy obtained from this food is measured in calories. If the calorie requirement is not fulfilled, then the person is below the poverty line.
- Expenditure method: In this method, the poverty line is estimated by using the expenditure of the person at a minimum level of food requirement, clothing, housing, etc.
It is vital to identify and estimate the poor in India to know the impact of welfare schemes, for the generation of new poverty estimation plans, and the constitutional requirement of identification of vulnerable society.
Depending upon the country’s social and economic status required to attain the basic needs, the poverty line may vary from one country to another.