Methodological nuances in estimating proportion and number of poor for states and India, 2022-23

The purpose of this exercise is methodological while also providing us with poverty estimates of rural, urban, and combined areas for States and India in 2022-23. The methodological nuances behind this are five-fold. First, matching items from Consumer Price Index (CPI, 2012 base) with items from Poverty Level Baskets (PLBs) of Tendulkar and Rangarajan and assigning PLB weights to the matched items. Second, computing the PLB-specific inflation index of 2022-23 over 2011-12. Third, calculating the PLB-specific poverty lines for 2022-23. Fourth, ascribing from grouped data of household consumption expenditure of 2022-23 the percentile associated with the monthly per capita expenditure (MPCE) that is greater than but nearest to the PLB-specific poverty line. Fifth, estimating proportion and number of poor. At the all-India level, for 2022-23, the updated Tendulkar poverty lines indicate a poverty incidence of 6.4 for rural, 3.1 for urban and 5.3 for combined, while the updated Rangarajan poverty lines indicate a poverty incidence of 9.3 for rural, 9.5 for urban and 9.4 for combined. In addition to non-comparability of consumption expenditure 2022-23 with earlier rounds, one may point out that the CPI is perhaps not capturing the ground reality faced by the poor. In other words, our poverty lines that lie in the per capita per day range of Rs.43-109 are not adequate to provide for nutrition, basic education, and primary health care needs among others. These suggest that social welfare measures linked to the poverty line need a re-think calling for a broad-based approach.