In a given year in India, official poverty lines are higher in some States than in others because

Question

Question

This question was previously asked in

Official UPSC Civil Services Exam 2019 Prelims Part A

Answer 1

The correct answer is option 2.

Key Points

Price levels vary from State to State: Official poverty lines in India are determined by considering the cost of living, which varies across different states. States with higher price levels have higher poverty lines because the cost of basic goods and services is higher. This accounts for regional differences in the purchasing power of money.
Poverty rates: While poverty rates do vary across states, the official poverty line is not directly based on poverty rates. It is primarily related to the cost of living in each state.
Gross State Product (GSP): GSP refers to the economic output of a state, but it does not directly affect the poverty line, which is based on consumer prices rather than total economic output.
Quality of public distribution: The effectiveness of the public distribution system (PDS) impacts the delivery of subsidized goods, but it does not influence the setting of the poverty line, which is more focused on cost-of-living indices.

Poverty Line Determination: In India, the poverty line is based on consumption expenditure, and adjustments are made for different states based on price indices to reflect regional cost-of-living differences.
State Variations: States like Maharashtra and Tamil Nadu, which have higher price levels, will have higher poverty lines compared to states with lower cost of living, like Bihar and Uttar Pradesh.