There is no perfect or stagnant scale for the measurement of poverty that can be used anytime, any day or at any place. This keeps on changing according to the place, date, time and situation. An estimated income is defined to measure the number of poor people in a country, with the estimation that who all can fulfill their basic needs with that income. This is known as poverty line. The poverty threshold, poverty limit or poverty line is the minimum level of income deemed adequate in a particular country. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries. This changes from time to time.

In India, poverty has been linked to “calorie consumption”. The Planning Commission has assumed people in rural areas having a calorie consumption of less than 2400 calories per day, and with calorie consumption of less than 2100 in urban areas to be poor. For the year 2011-12, the Planning Commission fixed the poverty line at the level of rupees 27.20 per person per day for rural areas and rupees 33.33 per person per day for urban areas. In 2011-12, rupees 816 per capital per month in rural areas and rupees 1000 per capital per month for urban areas was defined as poverty line.

But, to measure the poverty line, calorie consumption counting is not a good idea. Other than this, some experts say that calorie consumption should not be considered as the sole basis of poverty line, because poverty is also defined by other terms, including illness, illiteracy, unemployment, hunger etc. In poverty methodology, every poor is considered equal below poverty line, but this is not the actual case. For this, the correct measurement of their financial condition must be done.

The ratio of poor with the sum total of the entire population is termed as poverty ratio. Multiplying it by 100, can be used as a source to know the exact poverty ratio of the country. According to this, all the poor people below the poverty line are considered to be equal. For example, In 2011-12, rupees 816 per capital per month in rural areas and rupees 1000 per capital per month for urban areas was defined as poverty line. According to this, a person spending rupees 110 per month is also a poor and the person spending rupees 815 per month is also considered poor. That is why two stages should be adopted in measuring poverty. In the 1st stage, it should be determined how much each individual received, and on this basis, it should be determined that on what basis should the standard of per person income be fixed to ascertain poverty.

In the second stage, it should be estimated how bad the situation is. Ozzler, Dutt and Ravaillian used the “Poverty Gap Ratio” and “Squared Poverty Gap Ratio” to measure this. These measures estimate poverty. The Human Development Report considers poverty to be multi-dimensional. According to the World Bank, a person per day consumption expenditure of less than 1.25 US Dollars is termed as poor. Another measure of poverty measurement is also prevalent, which is the capability measurement of poverty which includes the ratio of children less than 5 years of age having low weight, abnormal delivery ratio and female illiteracy ratio.