Describe how the poverty line is estimated in India
Meaning of Poverty
A condition of poverty is one in which a person or family lacks the financial resources to meet a basic standard of living. Policymakers and economists define “absolute” poverty as the difference between consumption expenditure and a threshold called the “poverty line”. According to the official poverty line, the price of the goods in a “poverty line basket” (PLB) represents the expenditure incurred to acquire those goods. Poverty can be measured by the number of people living below their poverty line (the head count ratio can be used to calculate the incidence of poverty). The “depth” of poverty measures how far below the poverty line a person is. When someone is living in absolute poverty, they lack the means to obtain the commodities they need to sustain themselves. A relative poverty level is one where the standard of living is lower than the economic status of the population within the same area.