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A New Way of Measuring Poverty in India

According to Strategic Foresight Group Asian Horizons (SFGAH), a report given to the Planning Commission of India in December 2009 "recommended a new method, where the present national urban poverty line is taken as the basis for estimating every other poverty line in the country. According to experts, the new poverty line would factor in not just food requirements, but also those of education and healthcare that are important basic needs. Therefore, using this method in 2004-05 the percentage of poor was estimated as 41.8% in rural areas and 25.7% in urban areas. Even such a small upward revision of the poverty line, i.e. a net increase of 13% in rural poverty alone, for the 2004-05 period, would render about a 100 million new persons ―poor. While these people were already living impoverished lives, if the new method is adopted, the government would be able to term these people as poor, and therefore accord them with benefits from the Public Distribution System as well as from various government welfare programmes."

Implications from SFGAH:
SFGAH implies that, despite the huge potential change this could represent, it's not so easily implemented.
"This new method of calculating poverty is unlikely to come into effect immediately. It is likely that many more public policy experts, as well as officers of the government of India will have to weigh in with political and budgetary concerns before such a sweeping change is put into place."

Implications from IFTF:
In addressing poverty, it is crucial to accurately identify impoverished populations. It’s essential to frequently re-examine traditional definitions of poverty by assessing the amount of money it takes for individuals and families to lead happy, healthy and fulfilling lives.

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Sources:

Strategic Foresight Group Asian Horizons March 2010, page 2
http://newsletters.clearsignals.org/SFG_Mar2010#page=2