ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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From 50 Years Ago: How Poor Are the Poor

Vol V, No 16 april 4, 1970

How Poor Are the Poor
 
An interesting point with regard to income inequality has been made in a study, “A Configuration of Indian Poverty: Inequality and Levels of Living” by P D Ojha (Reserve Bank of India Bulletin, January 1970). The study suggests that income inequality is an insufficient measure of the levels of poverty in a society. This is because income inequality at best represents the relative position of a household in the aggregate income hierarchy. This type of relative poverty exists even in an affluent society. Moreover, while the state of relative poverty is largely a question of subjective judgment, conclusions on absolute levels of poverty can be based upon facts. 
 
Since consumption of foodgrains (cereals and pulses) constitutes a significant proportion of total consumer expenditure, particularly at the lower levels, an absolute index of poverty is constructed using actual consumption data in quantity terms. The difference in terms of quantity between the minimum calorie requirements and the actual consumption for each expenditure group is taken to represent the nutritional gap. The percentage of deficiency to the estimated norm is taken to be an index of the absolute level of poverty; a deficiency of 10 per cent and less was ignored in the study. 

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