Question map
In a given year in India, official poverty lines are higher in some States than in others because
Explanation
The correct answer is option B because state-specific poverty lines essentially reflect the differences in the cost of living in different States of the country[3]. Poverty lines are based on state differences in price levels and are updated periodically using a system of state-by-state price indexes, which are estimated separately for rural and urban households[4]. The State with the highest prices has a poverty line which is 57 per cent higher than that for the State with lowest prices[2]. This clearly demonstrates that price level variations across states are the determining factor for differences in official poverty lines. Options A, C, and D are incorrect because poverty lines are not set based on poverty rates, Gross State Product, or quality of public distribution systems, but rather on the basis of state-specific price levels to account for differing costs of living.
Sources- [1] https://www.mospi.gov.in/sites/default/files/publication_reports/saarc_social_charter_status_report.pdf
- [2] https://www.mospi.gov.in/sites/default/files/publication_reports/saarc_social_charter_status_report.pdf
- [3] https://www.mospi.gov.in/sites/default/files/publication_reports/saarc_social_charter_status_report.pdf
- [4] https://www.princeton.edu/~deaton/downloads/deaton_kozel_great_indian_poverty_debate_wbro_2005.pdf
PROVENANCE & STUDY PATTERN
Full viewThis is a 'First Principles' Economy question. It tests if you understand that the Poverty Line is a monetary threshold derived from a consumption basket. If the basket (minimum needs) is standard, the only variable that changes the monetary threshold across regions is the Cost of Living (Price Levels).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: In India in a given year, are official poverty lines higher in some States because poverty rates vary across States?
- Statement 2: In India in a given year, are official poverty lines higher in some States because price levels vary across States?
- Statement 3: In India in a given year, are official poverty lines higher in some States because Gross State Product varies across States?
- Statement 4: In India in a given year, are official poverty lines higher in some States because the quality of public distribution systems varies across States?
- Explicitly states India uses State-specific poverty lines and explains why they differ.
- Shows the primary reason for differences is variation in cost of living across States (not differences in poverty rates).
- Notes that poverty lines and poverty ratios are estimated at the sub-national (State) level.
- Confirms State-specific poverty lines exist for rural and urban areas, implying lines vary across States.
- Refers to the existence of 'state- and sector-specific poverty lines' used by the Planning Commission.
- Indicates official practice of having different poverty lines across States (and sectors).
Contains the exact multiple‑choice question asking why official poverty lines differ across states, listing 'poverty rates vary' and 'price levels vary' as candidate reasons — showing these are standard hypotheses/patterns considered.
A student could take this list of candidate reasons and check state price level (cost of living) data and state poverty estimates to see which correlate with higher official lines.
The same MCQ formulation appears again, indicating that variations in poverty rates and in price levels across states are commonly cited factors in official discussions of statewise poverty lines.
Use statewise poverty rate tables alongside state price indices to test whether areas with higher poverty rates tend to have higher official poverty lines or whether cost differences explain them.
Defines the poverty line as based on private consumption expenditure for food and non‑food items and notes methods depend on local socio‑economic needs — implying local price/consumption patterns can affect the poverty line.
Combine this rule with state Consumer Price Index (CPI) and typical consumption baskets to infer why some states' official lines might be higher (higher local prices or different consumption norms).
Notes that poverty lines or poverty ratios of one state are sometimes used for small/other regions (e.g., 'Poverty Ratio of Assam is used for Arunachal Pradesh'), implying poverty lines are understood as state‑specific measures.
A student could map which states have distinct official lines versus those that borrow another state's line and then compare with state poverty/price data to see if distinct lines align with differing poverty/price conditions.
Provides concrete statewise poverty percentages showing large inter‑state variation (e.g., Odisha 57.0%, Punjab 8.4%), demonstrating that poverty rates do vary markedly across states.
Using these state poverty rates plus knowledge of which states report higher official poverty lines, a student could check whether higher official lines coincide with higher measured poverty or instead track with prices.
- Directly states that poverty lines are based on state differences in price levels.
- Explains official procedure: poverty lines are updated using state-by-state price indexes (separately for rural and urban).
- Shows that state-by-state urban and rural poverty lines were calculated independently, producing large variation across states.
- Gives quantitative evidence that the ratio of urban to rural poverty lines varies widely (average ~1.4; >1.7 in some states), consistent with state-level price differences driving different official lines.
- Documents that official headcount measures differ across states and between urban and rural areas.
- Provides an example (Andhra Pradesh) where official urban poverty is much higher than rural, consistent with differing state/area poverty lines driven by price/measurement differences.
This exam-style item lists 'price levels vary from state to state' as a possible reason why official poverty lines differ across states, indicating this is a recognised factor to consider.
A student could combine this prompt with data on state-wise price indices to check whether states with higher price levels have higher official poverty lines.
A second source repeats the same multiple-choice formulation, again naming inter‑state price variation as a candidate explanation for differing poverty lines.
Use consumer price index or state CPI data alongside official state poverty thresholds to test for correlation.
Explains that the Tendulkar poverty line is defined by monthly spending on food and non‑food items and gives different rural/urban MPCE values, showing poverty lines are based on consumption costs.
Apply the same logic to states: if poverty lines are consumption‑based, then higher local price levels would raise the nominal MPCE threshold in those states.
States the poverty line is defined on the basis of private consumption expenditure for buying food and non‑food items, i.e., a threshold consumption expenditure.
A student could reason that because the threshold is an expenditure amount, regional price differences affecting expenditure needs could make nominal poverty lines differ by state.
Historical poverty lines are explicitly given 'at 1867-68 prices' or 'pre-war prices', showing that poverty thresholds have been tied to price levels historically.
This suggests a general rule that poverty lines move with price levels; a student can extend this to modern state price differences to hypothesize higher nominal lines where prices are higher.
- Explicitly states that state-specific poverty lines reflect differences in cost of living across states.
- Gives magnitudes showing poverty lines vary with local prices (e.g., 57% higher in the highest-price state).
- Notes that state-by-state urban and rural poverty lines were calculated independently and that price indexes used produced wide variation.
- Reports that the average ratio of urban to rural poverty lines is around 1.4 and varies widely across states, linking variation to price/indexing issues rather than output measures.
This textbook MCQ explicitly lists 'Gross State Product varies from states to states' as one of the candidate reasons why official poverty lines might be higher in some states.
A student could note that textbooks consider GSP a plausible factor and then check whether official poverty line-setting formulas use income/GSP indicators across states.
The same question appears in another textbook edition, again presenting GSP variation as a possible explanation for different state poverty lines.
Treat this repeated inclusion as a clue to investigate official methodology documents to see if state income levels (GSP) enter the poverty-line determination.
Defines India's poverty line as based on private consumption expenditure (a threshold of income/expenditure) rather than directly on poverty rates or public distribution quality.
Combine this with the idea that higher state GSP generally implies higher average incomes and potentially higher local consumption norms/prices, which could lead authorities to set higher nominal poverty thresholds in richer states.
Notes inter-state differences in poverty incidence and links low poverty incidence to 'agricultural and industrial development' (i.e., economic development factors related to state output).
A student could use the link between state-level development (which correlates with GSP) and poverty patterns to hypothesize that measures tied to local economic conditions (including poverty lines) might also vary with GSP.
States that various scholars and agencies produce state-wise poverty estimates, and that 'state-wise variations' are routinely plotted, implying official/state-level differentiation in poverty measurement.
Use this as a prompt to compare methodologies of different estimating bodies (Planning Commission, NSS) to see if they adjust poverty lines by state economic indicators such as GSP.
This MCQ lists 'price levels vary from state to state' and 'quality of public distribution varies from State to State' as candidate reasons for differences in official poverty lines, showing these factors are considered relevant in official/question contexts.
A student could combine this with data on state PDS performance to see if poorer PDS correlates with higher local price burdens and thus higher poverty-line thresholds.
Another presentation of the same MCQ (2019) again groups quality of public distribution with state-level price and poverty variation as possible causes of differing poverty lines.
Use this to justify investigating whether variations in PDS (which affect real food prices for the poor) map onto variations in official poverty-line levels across states.
Explains that TPDS introduced differential pricing for poor and non-poor and that public distribution schemes target food access—showing PDS directly affects the prices/food availability faced by poor households.
A student can infer that differences in PDS reach/pricing by state could change effective consumption costs used to set poverty lines, so comparing PDS coverage/prices across states would test the statement.
Defines poverty line as based on private consumption expenditure for food and non-food items, i.e., a price-weighted consumption threshold.
Combine this with state-level differences in food prices or PDS subsidised supplies to argue that variations in PDS (affecting out-of-pocket food costs) could influence state poverty-line levels.
Notes methodological practice of borrowing poverty lines or expenditure distributions across states (using one state's poverty line for another), implying state-level price/expenditure differences are material and sometimes adjusted for.
A student could use this to argue that if states differ enough in PDS quality/price impact, statisticians adjust or substitute lines—so checking where substitutions occur might reveal PDS-related differences affecting poverty lines.
- [THE VERDICT]: Sitter. Covered in NCERT Class IX (Economics, Ch. 3) and every standard Economy manual (Singh/Singhania) under Poverty Estimation.
- [THE CONCEPTUAL TRIGGER]: Poverty Estimation Methodology (Lakdawala vs Tendulkar vs Rangarajan Committees).
- [THE HORIZONTAL EXPANSION]: 1. **Tendulkar Committee**: Shifted from calorie anchor to nutritional outcomes; used Mixed Reference Period (MRP). 2. **Rangarajan**: Reverted to separate baskets for rural/urban; higher lines than Tendulkar. 3. **Indices used**: Historically, CPI-AL (Rural) and CPI-IW (Urban) were used to update lines. 4. **NITI Aayog MPI**: Now the focus for policy targeting (Health, Education, SoL) rather than income lines. 5. **Data Source**: NSSO Household Consumption Expenditure Survey (HCES) is the basis, not GSP data.
- [THE STRATEGIC METACOGNITION]: When studying metrics (CPI, Poverty Line), always deconstruct the formula. If the Poverty Line is ₹1000 in Urban and ₹816 in Rural, the difference isn't because urban people eat more, but because urban *prices* are higher. Apply this logic to States.
Poverty proportions differ markedly across Indian states, so any question about statewise poverty must begin with recognising these regional disparities.
High‑yield for UPSC because regional poverty patterns inform policy debates on targeted welfare, federal fiscal transfers, and development planning. Mastering this helps answer questions on spatial inequality, programme targeting (e.g., MGNREGA, PDS), and state performance comparisons.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > POVERTY IN INDIA > p. 81
- Economics, Class IX . NCERT(Revised ed 2025) > Chapter 3: Poverty as a Challenge > Inter-State Disparities > p. 34
The poverty line in India is defined as a consumption expenditure threshold for basic food and non‑food needs, which determines who is classified as poor.
Important for questions on measurement and methodology of poverty, design of anti‑poverty schemes, and critiques of official statistics. Understanding this concept enables evaluation of why poverty estimates change with price or consumption surveys and supports arguments on measurement reform.
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > Poverty line > p. 14
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > incidence of Poverty in india > p. 17
When direct expenditure or poverty data are unavailable for certain territories, statisticians use another state's poverty ratio or expenditure distribution as a proxy for estimation.
Useful for UPSC answers on statistical methods, data quality and limitations, and the implications of estimation choices for policy. Knowing this prepares aspirants to critique official figures, discuss reliability of sub‑national estimates, and suggest improvements in data collection.
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > Table 11.1 (Contd.) > p. 18
The poverty line is defined as a monthly per‑capita consumption expenditure threshold that covers food and non‑food needs.
High-yield for UPSC: understanding how the poverty line is constructed (MPCE basis) is essential for interpreting poverty estimates, comparing measures across time, and assessing policy impacts. It links to national accounts, survey measurement, and welfare policy questions.
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > Poverty line > p. 14
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > the indian Poverty line > p. 15
Headcount ratios and poverty percentages differ across regions, demonstrating uneven distribution of poverty.
Important for questions on regional development and policy prioritisation; helps answer why targeted interventions differ and connects to topics like human development, fiscal devolution, and regional planning.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > POVERTY IN INDIA > p. 81
- Economics, Class IX . NCERT(Revised ed 2025) > Chapter 3: Poverty as a Challenge > Inter-State Disparities > p. 34
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > incidence of Poverty in india > p. 17
Official poverty thresholds differ for rural and urban areas, with distinct daily/MPCE figures for each.
Useful for analysing intra‑country heterogeneity in poverty measurement and programme design (urban vs rural schemes); often tested in questions about implementation and measurement of poverty.
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > the indian Poverty line > p. 15
The poverty line is a consumption-expenditure threshold and is affected by local cost of living.
High-yield: questions often test how poverty is measured and why thresholds differ regionally; links to inflation, cost-of-living adjustments, and policy targeting; enables answering items on why poverty lines vary across areas (e.g., price-level differences versus income/GDP).
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 11: Contemporary Socio-Economic Issues > Poverty line > p. 14
The distinction between URP (Uniform Reference Period - 30 days) and MRP (Mixed Reference Period - 365 days for durables). Future Q: 'Which method yields a lower poverty estimate?' (MRP usually yields lower poverty rates as it captures infrequent high-value spending better).
Dimensional Analysis. The 'Poverty Line' is expressed in Rupees (Currency). Option A (Rates) is a percentage. Option C (GSP) is a macro-aggregate. Option D (Quality) is qualitative. Only Option B (Price Levels) directly explains why the *monetary value* of a fixed basket changes ($Cost = Price \times Quantity$).
GS-2 (Welfare Schemes): The shift from 'Poverty Line' (Income-based) to **SECC 2011 (Deprivation-based)** for beneficiary identification (e.g., PMAY, Ayushman Bharat). The official poverty line is now largely statistical; the *operational* line is deprivation-based.