In a given year in India, official poverty lines are higher in some States than in others because
Correct Answer :
price levels vary from State to State
Solution :
The correct answer is price levels vary from State to State.
Detailed Explanation:
In India, the official poverty line represents the minimum monetary threshold (measured in terms of Monthly Per Capita Consumption Expenditure or MPCE) required by an individual to fulfill basic daily needs, including food (caloric requirements) as well as essential non-food items such as clothing, shelter, health, and education.
Key Reasons for State-Level Variations:
1. Cost of Living & Price Levels: The retail prices of essential food items, housing, transport, and utilities differ substantially across different Indian States due to variations in local production, transportation costs, regional supply chains, and market dynamics.
2. Use of State-Specific Price Indices: To ensure realistic poverty estimation, official authorities (such as the NITI Aayog, formerly the Planning Commission) adjust national poverty estimates using State-specific price indices. For instance, the Consumer Price Index for Agricultural Labourers (CPI-AL) is used for rural areas, while the Consumer Price Index for Industrial Workers (CPI-IW) is used for urban areas.
3. Basket Value Realization: Because purchasing the exact same minimum basket of goods costs more in a State with higher overall price levels, that State's designated poverty line (in rupees) must be fixed higher to accurately reflect the true minimum expenditure required to stay above poverty.
Therefore, official poverty lines are higher in some States than in others primarily because price levels vary from State to State.
Access expert-curated educational resources and study materials—completely free.
Create, conduct, and manage professional online assessments with Mindyard. Perfect for teachers and institutes.
Copyright © 2026 Mindyard. All Rights Reserved.