Absolute poverty

Absolute poverty refers to a condition in which an individual or household lacks the minimum level of income or resources necessary to meet basic physical needs such as food, clothing, shelter, healthcare, and education. It represents the most severe form of poverty, where survival itself is at risk due to insufficient access to essential goods and services required for a minimum standard of living. The concept is universal and measurable in monetary terms, making it a key indicator for assessing economic development and social welfare across nations.

Concept and Definition

The term absolute poverty denotes a fixed threshold below which a person is considered poor, regardless of the overall level of income or wealth in the society. This threshold is determined based on the minimum consumption requirements necessary for maintaining physical health and human survival.
The World Bank defines absolute poverty as living on less than USD 2.15 per day (as of 2022) at 2017 purchasing power parity (PPP). This global poverty line reflects the inflation-adjusted value of income needed to meet basic nutritional and living standards in low-income countries.
Unlike relative poverty, which measures inequality within a society, absolute poverty focuses on deprivation in absolute terms—whether people have enough to survive.

Historical Background

The concept of absolute poverty gained prominence in the mid-20th century as economists and policymakers began to quantify poverty for international comparison. Early efforts, such as Rowntree’s poverty studies (1901) in England, identified minimum standards of living based on food and housing costs.
In the post-war period, global organisations such as the United Nations (UN) and World Bank began defining international poverty lines to guide development assistance and policy formulation. In India and other developing nations, the identification of absolute poverty became central to planning strategies during the 1950s and 1960s, especially with the rise of welfare-oriented economic policies.

Measurement of Absolute Poverty

Absolute poverty is typically measured using income or consumption expenditure data. The process involves:

1. Defining the Poverty Line:
   • The minimum level of income required to purchase essential goods and services.
   • Based on caloric intake (for example, 2,100 calories per day in urban areas and 2,400 calories in rural areas, as used in India).
2. Calculating Poverty Incidence:
   • Headcount Ratio (HCR): Percentage of population living below the poverty line.
   • Poverty Gap Index (PGI): Measures the depth of poverty by showing how far below the poverty line the poor are.
   • Squared Poverty Gap: Reflects the severity of poverty by giving more weight to the poorest individuals.
3. Adjustment for Prices and Inflation:
   • Poverty lines are adjusted for inflation and cost-of-living variations across regions using purchasing power parity (PPP) or price indices.

Absolute Poverty in India

In India, the measurement of absolute poverty has evolved through various expert committees:

• Lakdawala Committee (1993): Based poverty estimates on calorie intake and expenditure data.
• Tendulkar Committee (2009): Shifted focus from calorie norms to consumption expenditure on food, education, and health.
• Rangarajan Committee (2014): Revised the poverty line to ₹972 per capita per month in rural areas and ₹1,407 in urban areas (2011–12 prices).

India’s absolute poverty rate has shown significant decline due to economic growth, social welfare schemes, and targeted poverty alleviation programmes such as MGNREGA, Public Distribution System (PDS), and National Rural Health Mission (NRHM). However, regional disparities and multidimensional deprivation persist, particularly in states like Bihar, Jharkhand, and Uttar Pradesh.

Characteristics of Absolute Poverty

People living in absolute poverty typically exhibit several common characteristics:

• Inadequate food consumption, leading to malnutrition and poor health.
• Lack of access to safe drinking water and sanitation.
• Poor housing conditions and overcrowded living environments.
• Limited access to education and healthcare facilities.
• Unstable employment and dependence on informal or subsistence activities.

These conditions reinforce a cycle of poverty, where lack of resources perpetuates social and economic exclusion.

Causes of Absolute Poverty

The persistence of absolute poverty arises from a combination of economic, social, and structural factors:

• Low income and unemployment, especially in rural and informal sectors.
• Inequitable distribution of resources and land ownership.
• Low productivity in agriculture and limited industrialisation.
• Inadequate access to education and skill development.
• Rapid population growth, straining resources and public services.
• Social discrimination, including caste, gender, and ethnic inequalities.
• Environmental degradation and climate-related disruptions affecting livelihoods.

Global Perspectives

Globally, the fight against absolute poverty is a central goal of development policy. According to the World Bank, the global poverty rate has declined substantially—from around 36% in 1990 to less than 8% by 2019, largely due to economic progress in Asia.
However, the COVID-19 pandemic, rising inflation, and conflicts such as the Ukraine crisis have reversed some of this progress, pushing millions back into extreme poverty. Sub-Saharan Africa and South Asia continue to have the largest populations living in absolute poverty.

Indicators and Indices

Several indices and tools are used to assess poverty beyond simple income measures:

• Human Poverty Index (HPI): Developed by the UN to measure deprivation in longevity, education, and standard of living.
• Multidimensional Poverty Index (MPI): Introduced by the UNDP and Oxford Poverty and Human Development Initiative (OPHI), capturing deprivations in health, education, and living standards.
• Global Hunger Index (GHI): Focuses on food security and malnutrition, closely related to absolute poverty.

These measures recognise that poverty is not only about lack of income but also about lack of access to opportunities and basic services.

Impact and Consequences

Absolute poverty has wide-ranging consequences for individuals and societies:

• Health deterioration due to malnutrition and lack of medical care.
• Educational deprivation, leading to intergenerational poverty.
• Increased social unrest and vulnerability to exploitation.
• Low productivity and economic stagnation.
• Reduced human development indicators, including life expectancy and literacy rates.

Persistent absolute poverty undermines national growth, social cohesion, and political stability.

Measures to Eradicate Absolute Poverty

Governments and international agencies have adopted multiple strategies to combat absolute poverty:

• Economic growth with inclusion, focusing on employment generation and equitable income distribution.
• Social welfare schemes, including food security, health insurance, and housing assistance.
• Investment in education and skill development to enhance employability.
• Rural development programmes, promoting agricultural productivity and infrastructure.
• Direct cash transfers and targeted subsidies for the poorest households.
• Empowerment of women and marginalised groups, ensuring equal access to resources.