A common method used to measure poverty is based on income or consumption levels. A person is considered poor if his or her income or consumption level falls below a given “minimum level” necessary to fulfill basic needs. While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement, etc. are determined for subsistence. These physical quantities are multiplied by their prices in rupees. The resent formula for food requirements while estimating the poverty line is based on the desired calorie requirement.

As per 2000 figures; a family of five which is earning less than Rs 1,640 per month is considered to be living below the poverty line. This figure is Rs 2,270 per month for the urban area. The expected calorie intake has been fixed at 2400 calories per person in rural areas and 2100 calories in urban areas. A person consuming less than this amount is considered to be living below the poverty line.