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Urban Poverty: Imperfections in Measurement and Relevance in Present Context

Urban Poverty in IndiaThe population of India is such that the extent of urban poverty in India has a substantial impact on the world urban poverty. Therefore, it is very important to get a better representation and understanding of urban poverty in India. Another reason for picking up this topic is the great Indian poverty debate which started with the liberalization of the Indian economy in the early nineties.

While there has been a consensus on the fact that liberalization has led to a reduction of income poverty, the picture is not so clear if one considers other non-pecuniary dimensions such as health, education, crime and access to infrastructure. 

In this paper, the author – Puneet Gupta, a Master’s student at TERI University – defines the various approaches to measure poverty, and discusses the gaps in official measures in measuring urban poverty. He states the relevance of understanding poverty in present scenario, and looks into the various policies that seem to address the problems arising with urbanization and increasing number of urban poor. Lastly, he does a critical analysis of these policies and suggests a way forward.


Most developing countries have been witnessing rapid urbanization over the past few decades. In India, about 28% of the total population lives in urban areas (Dayal, Tewari, & Viswanathan, 2009), which has led to increase in pressure on existing resources in cities, and hence, people in urban areas are facing huge problems in terms of inadequate water supply, lack of sanitation facilities, affordable healthcare, quality education, efficient transport and the list is endless.

The problem is further aggravated with the ill-defined poverty measures. Most of the poverty measures still don’t take account of direct concern to health, sanitation, housing and safe drinking water. They only consider the income that households need for adequate food consumption while defining poverty. 

Approaches to Measuring Poverty: Definitions and Gaps

According to UNDP Human Development Report 1997, there are three major approaches to measure poverty. First, poverty based on the income needed to fulfill daily nutritional requirements of 2400 kcal in rural areas and 2100 kcal in urban areas (Planning Commission Report 1981). Using this approach, the 1992 BPL census identified Rs. 11,000 per household per annum as the cut-off point below which every household will be considered as poor.

But this approach did not seem to address the access to other basic needs. As a result, second approach came into picture, which defined poverty as a state described by severe deprivation of basic human needs, which does not depend only on income but also on access to social services such as land ownership, ownership of consumer durables and farm equipments, etc.

But this approach was also criticized on the grounds that poverty cannot be defined in just absolute terms as, according to Amartya Sen (1985), ‘absoluteness’ is neither constant over time nor invariant between societies. Hence, the third approach defines poverty as the failure of basic capabilities as it is always the poor who stay in the vicious circle of poverty apparent by chronic under-nutrition, unsanitary conditions and poor health, which in turn raises their vulnerability to infectious diseases that obstructs their motivation and cuts down their capacity to physical work, and hence, puts them in never ending poverty. For instance, women bear an uneven burden of poverty as an outcome of the patriarchal nature of our society.

The Planning Commission estimates the proportion of poor for rural and urban areas separately. The official poverty line is based on the norm that the average person in rural India should consume 2400 calories a day and a person from urban India should consume 2100 calories a day. The minimum cost of obtaining such nutrition (about 650 grams of grains), comes to Rs. 368 and Rs. 559 per month per capita in rural and urban India respectively after adjusting for inflation over the years. All those who spent less than this amount on food were considered poor. Therefore, a household earning less than Rs. 1,800 in terms of money is considered as a Below Poverty Line (BPL) family (Tendulkar, Radhakrishnan, & Sengupta, 2009).

The blatant defect in the official definitions of the poverty line is that it assumes that all the money earned is spent on food only. This definition does not include the other basic needs like clothing and shelter, let alone ignoring the other important needs like nutrition, health, education, etc. While urban and rural poverty levels were differently taken, the figures are not really representative. The urban poor’s spending on housing, transport, etc., is not considered. Most of the State Governments adopt the norm of income limit to define the poor. However, urban poverty manifests itself in various forms such as expansion of slums, rapid growth of informal sector, underdevelopment of labour, increasing pressure on public services and high rate of educational deprivation and health contingencies retarding growth of physical and mental capacities, growing sense of hopelessness, rising crime rates and group violence.

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