Context: The World Bank's latest poverty estimates place India's extreme poverty rate at 2.6%.
- The article questions this estimate, arguing that it may underestimate actual deprivation because income-based poverty measures do not adequately capture whether people can afford sufficient food.
- It proposes the Thali Index as an alternative measure of living standards based on directly observable food consumption.
World Bank's Poverty Estimation Methodology
- Headcount Poverty Ratio (HCR): Percentage of the population living below a specified poverty line.
- Data source: Household Consumption Expenditure Survey (HCES), 2023–24, conducted by the National Statistical Office (NSO).
- Method: Estimates the number of poor by comparing household consumption expenditure with a specified poverty line.
- Poverty line: Represents the minimum acceptable consumption level required to avoid poverty, expressed in monetary terms.
- Limitation highlighted: The World Bank report does not specify the exact basket of goods and prices used to construct India's poverty line.
Thali Index: An Alternative Measure
- Concept: Proposed by Pulapre Balakrishnan and Aman Raj in 2025 to measure living standards through the number of thalis an individual can afford.
- Basis: Monthly per capita expenditure on food reported in HCES.
- Thali as a unit: Represents a culturally relevant, complete meal containing proteins, carbohydrates and minerals.
- Price benchmark: ₹30 per home-cooked vegetarian thali, based on CRISIL's estimate for 2023–24.
- Methodology: Food expenditure per person is divided by the estimated cost of one thali to calculate the number of affordable meals.
Key Findings of the Thali Index
- Food affordability: Up to 50% of rural Indians and 20% of urban Indians could not afford two thalis daily.
- After accounting for subsidised food: The proportion falls to approximately 40% in rural areas and 10% in urban areas.
- Overall implication: Approximately 30% of India's population may not have access to two square meals a day.
- Contradiction: These findings raise questions about the World Bank's estimate of less than 3% extreme poverty.
Limitations of Income-Based Poverty Estimation
- Food as residual expenditure: Households may prioritise essential non-food expenses such as rent, medicines and school fees, leaving limited resources for food.
- Consumption deprivation: Crossing a monetary poverty line does not necessarily ensure adequate nutritional consumption.
- Need for revised poverty line: The poverty threshold should account for minimum nutritional requirements and essential non-food expenditure.
- Broader implications: The concern also extends to the UNDP's Multidimensional Poverty Index (MPI), insofar as it relies on the World Bank's poverty line.
Food Price Inflation and Agricultural Productivity
- Rising food inflation: Food price inflation reportedly increased every month between January and September, with the rate of inflation trebling over this period.
- Impact: Rising food prices reduce the purchasing power of vulnerable households and worsen food insecurity.
- Policy priority: Controlling food inflation requires better management of food supply rather than relying only on monetary measures.
- Agricultural productivity: Increasing agricultural productivity and ensuring stable food production are essential for maintaining affordable food prices.
Relevant Concepts
- Household Consumption Expenditure Survey (HCES): Conducted by the National Statistical Office (NSO) to collect information on household consumption expenditure and living standards.
- Poverty Headcount Ratio: Measures the proportion of the population below a defined poverty threshold; does not indicate the depth or severity of poverty.
- Multidimensional Poverty Index (MPI): Measures poverty through overlapping deprivations in health, education and living standards rather than income alone.
- Food Security: Under the National Food Security Act, 2013, eligible beneficiaries receive subsidised foodgrains through the Targeted Public Distribution System (TPDS).
