Journal Article
Unravelling a Conceptual Muddle: India's Poverty Statistics in the Light of Basic Demand Theory

For some time now, there has been growing dissatisfaction with the conceptual basis of India’s official poverty statistics, with specific reference to the manner in which the Planning Commission has sought to address the ‘identification’ problem in poverty measurement. Unfortunately, this has evoked little in the way of official acknowledgement, and still less in the way of official rectification; apart from which, the faulty procedures underlying the official methodology have been replicated in a number of ‘non-official’ scholarly studies. The present paper makes an effort to identify, within an analytical framework of elementary demand theory, the source of the conceptual muddle, and to indicate how seriously misleading it could be to continue to employ the official methodology (or variants thereof) in assessments of income poverty in India.

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