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


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  • Durgesh C. Pathak

    (Indira Gandhi Institute of Development Research)

  • Srijit Mishra

    (Indira Gandhi Institute of Development Research)


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.

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Bibliographic Info

Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2011-015.

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Length: 42 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:ind:igiwpp:2011-015

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Keywords: Household type (occupation groups); inequality (Gini); NSS regions; Planning Commission; poverty; rural; social groups; urban;

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  1. Srijit Mishra, 2009. "Poverty and Agrarian Distress in Orissa," Development Economics Working Papers 22934, East Asian Bureau of Economic Research.
  2. Durgesh Chandra Pathak, 2010. "Poverty and inequality in Uttar Pradesh during 1993-94 to 2004-05: A Decomposition analysis," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-014, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. M. H. Suryanarayana & Dimitri Silva, 2007. "Is Targeting the Poor a Penalty on the Food Insecure? Poverty and Food Insecurity in India," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 8(1), pages 89-107.
  4. M.H. Suryanarayana, 2011. "Policies for the Poor: Verifying the Information Base," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(1), pages 73-88.
  5. Sreenivasan Subramanian, 2010. "Identifying the Income-Poor: Some Controversies in India and Elsewhere," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 46, Courant Research Centre PEG.
  6. V.M. Rao, 2010. "Policy making in India for rural development: data base and indicators for transparency and accountability," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 3(3), pages 222-236.
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Cited by:
  1. Srijit Mishra, 2011. "Food, hunger and ethics," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-023, Indira Gandhi Institute of Development Research, Mumbai, India.
  2. Srijit Mishra, 2014. "Incidence of poor and poverty risk in India across NSS regions for rural and urban areas, 2004-05 and 2009-10," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-021, Indira Gandhi Institute of Development Research, Mumbai, India.


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