(a) What are the methods used in measuring poverty and inequality in India? Analyse. (20 marks) (b) How have rural and urban…

Poverty and inequality measurement must be read as a diagnostic chain: poverty lines identify who is poor, inequality indicators show distribution, and together they reveal whether growth is broad-based.

Measurement of poverty and inequality The Tendulkar Committee (2009) set poverty lines of about Rs 26 rural and Rs 33 urban per day at 2011-12 prices, using 2400 kcal rural and 2100 kcal urban plus non-food consumption. Rangarajan (2014) raised them to about Rs 32 rural and Rs 47 urban, using uniform 2100 kcal and a broader non-food basket. Both are useful for trends but limited: calorie norms may understate urban food costs and quality, baskets can miss public services, and NSSO revisions make comparison difficult. The debate is not merely technical: a broader basket can reclassify marginal workers as poor, while a calorie-only line may miss urban housing and transport costs. The MPI, used by NITI Aayog/OPBI, measures 12 deprivations in health, education and standard of living; it captures vulnerability but is less suited to rapid annual monitoring. For inequality, the Lorenz curve maps cumulative income shares; the Gini coefficient compresses it into a 0-1 measure; the Palma ratio compares top 10 per cent with bottom 40 per cent; and the Theil index decomposes inequality into within-state and between-state components, with Indian evidence generally showing within-state inequality larger. NSSO remains the principal source for consumption and income inequality; wealth distribution data are scarcer and rely on NSSO asset and consumption surveys. PLFS, primarily an employment survey, informs labour income and worklessness but is not a standard source for consumption or asset inequality.

Rural and urban development and poverty reduction Rural development has reduced poverty through agricultural growth and wage support. The Green Revolution raised productivity in Punjab, Haryana, western Uttar Pradesh and parts of Tamil Nadu, but regional unevenness left eastern and central India exposed. MGNREGA provided a wage floor, reduced distress migration and built assets; PMGSY improved market access and stimulated non-farm activity. Poverty reduction is strongest where farm growth, roads and public works converge. Urban development has contributed differently. Urbanization-led employment in construction, trade and services has absorbed migrants and lifted many out of poverty, but the informal sector remains flexible yet insecure. SEZs promoted export-oriented industry and employment, though raising land acquisition and displacement tensions. Agglomeration economies generate productivity and jobs, yet urban poverty persists in slums and peri-urban settlements where housing, water and sanitation lag behind income growth.

Decentralized planning guidelines The 73rd and 74th Amendments institutionalized local planning. Article 243G empowers Panchayats to plan and implement 11th Schedule schemes; District Planning Committees consolidate panchayat and municipal plans, and Metropolitan Planning Committees under Article 243ZE do so for metropolitan areas with population ten lakhs or more. Operationally, Gram Sabha identifies needs, prepares plans and budgets, and panchayats formulate Gram Panchayat Development Plans under Ministry of Panchayati Raj guidelines. Kerala’s People’s Plan Campaign, launched in 1996, is an important participatory model, but a state initiative rather than a national GPDP guideline. The process requires convergence of centrally sponsored schemes with local plans so funds follow district and panchayat priorities. Constraints are weak capacity, delayed fiscal devolution, and alignment of state schemes with local plans.

Measurement, development and governance are linked: accurate data reveal where growth fails, rural and urban policies determine whether growth reaches the poor, and decentralized planning translates national resources into local priorities. A way forward is to combine consumption-based poverty lines with MPI monitoring, strengthen NSSO and labour-market data, invest in rural non-farm and urban basic services, and make district and metropolitan planning committees effective instruments of fiscal and administrative devolution.