India needs a new poverty line to gauge the extent of poverty in the country, Bibek Debroy, chairman of the Prime Minister's Economic Advisory Council (EAC), said on Wednesday. He said the Suresh Tendulkar Committee's estimate was more than a decade old and the Multidimensional Poverty Index (MDPI) was not a proper poverty line.

Speaking at a conference for data users on the newly released Household Consumption Expenditure Survey (HCES) organised by India's Ministry of Statistics and Programme Implementation (MOSPI), Debroy asked whether these latest results should be used to set a new poverty line.

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“We still don't have an official (definition of) poverty line beyond the Tendulkar committee. The Rangarajan committee report was never formally adopted and the MDPI is not really a poverty line. Should we now have a new poverty line to which this HCES data can be applied,” Debroy said.

The latest poverty line is based on the recommendations of an expert group led by Professor Suresh Tendulkar, which submitted its report in December 2009. According to these estimates, poverty fell by an average of 0.74 percentage points per year between 1993-94 and 2004-05 and by 2.18 percentage points between 2004-05 and 2011-12.

For 2011-12, the national poverty line according to the Tendulkar method is estimated at Rs 816 per capita per month in rural areas and Rs 1,000 per capita per month in urban areas.

Later in June 2014, a committee chaired by C. Rangarajan also submitted its report on poverty line and fixed it at a monthly per capita expenditure of Rs 1,407 in urban areas and Rs 972 in rural areas for 2011-12. This resulted in higher poverty lines and consequently higher poverty rates as compared to the earlier estimates of the Tendulkar Committee. The committee report was not officially accepted by the government.

Recently, the government started using the MDPI, which calculates poverty based on 22 indicators, besides income. According to the latest NITI Aayog report released in January this year, 248.2 million Indians are expected to have come out of multidimensional poverty between 2013-14 and 2022-23.

Debroy also noted that the new HCES data released by the department earlier this month would also help estimate inequality. He stressed that it is important to look at each state's Gini coefficients to determine inequality levels, as a nationwide estimate may not give the whole picture.