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UPSC Prelims 2019 Q24: Indian Economy – Human Development, Poverty & Employment Schemes

UPSC Prelims 2019, General Studies Paper I · Indian Economy

In a given year in India, official poverty lines are higher in some States than in others because
  1. (a) poverty rates vary from State to State
  2. (b) price levels vary from State to State
  3. (c) Gross State Product varies from State to State
  4. (d) quality of public distribution varies from State to State

Answer: (b) price levels vary from State to State

Explanation

Why State Poverty Lines Differ

OptionClaimVerdictDetail
(a)Poverty rates vary state to stateNOT the reasonPoverty rates are the OUTPUT of applying a poverty line, not the input that sets it.
(b)Price levels vary state to stateCORRECTPoverty line is the monetary value of a defined consumption basket. Since prices of food/clothing/services differ across states, the same basket costs more in high-price states -> higher poverty line. This is why Rangarajan/Tendulkar methodology uses state-specific price adjustments.
(c)GSDP varies state to stateNOT the reasonGSDP measures state output, not household consumption cost.
(d)PDS quality varies state to stateNOT the reasonPDS quality affects welfare delivery but does not fix the poverty line value.

Answer: (b) price levels vary from State to State.

Why each option is right or wrong

Key point

Poverty line = rupee value of a consumption basket. Different state prices -> different rupee values for the same basket. That is why lines differ across states.

Remember

Official state poverty lines differ because price levels (cost of the consumption basket) vary from state to state. Since the poverty line is the monetary value of a defined basket, higher-price states have higher lines. The Tendulkar and Rangarajan methodologies use explicit state-wise price adjustments.

Common mistakes

Exam tip

Poverty methodology anchors: Alagh (1979) - calorie-based. Lakdawala (1993) - state PLs using CPI. Tendulkar (2009) - MPCE + mixed reference. Rangarajan (2014) - separate rural/urban baskets, higher lines. All use state-wise price adjustments.

Sources

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