SOCIETAL POVERTY LINE

 Societal Poverty Line
GS Paper 1 : Social issues

 

Introduction

Poverty lines are typically higher in richer countries, and lower in poorer ones, reflecting the
relative nature of national assessments of who is considered poor. In many high-income
countries, poverty lines are explicitly relative, set as a share of mean or median income.
Despite systematic variation in how countries define poverty, global poverty counts are
based on fixed-value lines. To reflect national assessments of poverty in a global headcount
of poverty, a societal poverty line is devised.


Societal Poverty Line

The SPL is a combination of the absolute IPL and a poverty line that is relative to
the median income level of each country. Specifically, it is equal in value to either the IPL
or US$1.00 plus half of daily median consumption in the country, whichever is greater.

 

The relevance of SPL

The majority of the world no longer lives in low-income economies. For many countries, the
social relevance of the International Poverty Line (IPL) has lessened over time as their
economies have grown. This is largely due to the observance that needs change as the world
becomes richer.

What constitutes a basic need can vary depending on a country’s level of
consumption or income. In a poorer country, for example, participating in the job market
may require only clothing and food, whereas someone in a richer society may also need
internet access, a vehicle, and a cell phone. The cost of performing the same function may
differ across countries depending on their overall level of income.

 

Poverty on lines of SPL

Number of people who are poor stood at 2.1 billion (28 percent) as of 2015, almost three
times more than those living under the US$1.90 level (10%).

World Bank has released its report on global poverty ‘Poverty and Shared Prosperity
2018: Piecing Together the Poverty Puzzle’
The percentage of people living in extreme poverty (less than $1.90
a day) globally fell to a new low. In the 25 years from 1990 to 2015, the extreme poverty
rate dropped an average of a percentage point per year – from nearly 36% to 10%.

Shared prosperity is defined as the growth in the average income or consumption of the
poorest 40 percent of the distribution in the population (the bottom 40). The shared
prosperity premium captures whether the bottom 40 are receiving a larger or smaller
share of the overall pie.

 

Profile of Societal Poverty

For the global count of absolute poverty, many high-income countries are assumed (not
estimated) to have no extreme poverty, as measured by the international poverty line.
While this may be a reasonable approximation for the percent of people living on less than
$1.90 per day in some rich countries, it is not an acceptable assumption for societal poverty.
Among upper-middle-income countries, the mean SPL almost doubled
over the same time period, increasing from $2.80 in 1990 to $5.50 in 2013. The relative line
has increased in all regions, but faster in fast-growing regions. In 1981, the mean SPL in
South Asia was equal to the international poverty line of $1.90 and the SPLs in East Asia and
the Pacific, and Sub-Saharan Africa were just slightly higher. Due to strong economic growth
in East Asia and Pacific, the mean line has more than doubled since then to $5.60 per day in
2013. In contrast, Sub-Saharan Africa, which has experienced much weaker overall growth, has an estimated mean societal poverty line of $2.20 per day in 2013, essentially unchanged
since 1981.

 

Conclusion

By fixing the absolute international poverty line at $1.90, it serves the useful purpose of
providing a fixed target for eliminating extreme poverty. This advantage of keeping the line
fixed also means though that as the world progresses towards eradicating extreme poverty,
the $1.90 poverty line will become increasingly irrelevant to large portions of the world. In
contrast, because the SPL is explicitly a function of the wellbeing of each country, it is by
construction a relevant yardstick for all countries.

 

Previous Year Questions

  1. “Empowering women is the key to control population growth”. Discuss. (2019)
  2. What are the challenges to our cultural practices in the name of secularism? (2018)
  3. ‘Despite the implementation of various programmes for eradication of poverty by the government in India, poverty is still existing’. Explain by giving reasons.(2017)
  4. “An essential condition to eradicate poverty is to liberate the poor from the process of deprivation.” Substantiate this statement with suitable examples. (2016)

 

 

 

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