Key Concepts of Poverty

Poverty in India is a complex issue with multiple dimensions. Two major concepts used to analyse it are absolute poverty and relative poverty.

1. Absolute poverty means not having enough money or resources to meet the basic necessities like minimum required food intake (measured in calories), clothing, and shelter.
2. In India, planning agencies set calorie-based thresholds: 
   Rural: 2400 calories per person per day
   Urban: 2100 calories per person per day
   Average: 2250 calories per day.
3. The absence of income needed for this minimum calorie intake results in absolute poverty.
4. Absolute poverty is common in developing countries and can be largely eradicated by effective poverty alleviation programmes.

1. Relative poverty is about comparisons within society.
2. It refers to inequalities in income, wealth, consumption, and access to services between different groups.
3. Relative poverty exists in every country, including developed nations. It is a universal phenomenon.
4. It is measured by comparing living standards—who has less and by how much—as opposed to fixed criteria.
5. Relative poverty can be reduced through targeted policies, but can never be completely eliminated.

• Absolute poverty: Families are unable to eat three meals a day and lack basic shelter.
• Relative poverty: A household earning less than 40% of the average income but still able to afford food and housing compared to richer groups.

• Absolute poverty means not meeting basic human survival needs. It is measured with specific thresholds and can be eradicated.
• Relative poverty is about how much worse off some are compared to others. It is present everywhere and can only be reduced.
• Understanding both concepts helps policymakers design more effective economic and social programmes.