The NITI Aayog may be entrusted with deciding whether India needs a new poverty line. This comes in the backdrop of the release of the results of the Household Consumer Expenditure Survey (HCES) for 2022-23, which is used to estimate the consumption and income levels of households.

According to sources, a decision on drawing up a new poverty line will have to be taken by the Centre, possibly the NITI Aayog, which in the past has taken up such issues. At present, there is no clear decision on a drawing up a new poverty line. Further, a second round of the HCES for 2023-24 is also currently underway.

A fresh poverty estimate would help the government better identify the poor and also assess the efficacy of policies to eradicate poverty and understand what further needs to be done. The NITI Aayog had recently released the multidimensional poverty index based on which 25 crore people moved out of poverty between 2015 and 2024.

Sources said that one of the options may be to continue using the poverty estimates although it is from 2011-12 or update it further. This is because it may be difficult to estimate a fresh poverty line given that there are a large number of subsidised and free items given by the government now.

With the results of the first round of HCES out, there have been some discussions around drawing up a fresh estimate for a poverty line. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, had also raised this issue recently.

Typically, the erstwhile Planning Commission periodically estimated poverty lines and poverty ratios for each of the years for which the HCES was conducted. The last HCES for which results are available pertain to 2011-12. An expert group under the Chairmanship of Suresh Tendulkar to review the methodology for estimation of poverty had submitted its report in December 2009 and computed poverty lines and poverty ratios for 2004-05. 

Later a committee led by C. Rangarajan was set up to review the methodology for the poverty line as there were concerns that the Tendulkar poverty line was too low. But the report was never made public. The Planning Commission later updated the poverty estimates for 2011-12 as per the methodology recommended by Tendulkar Committee.