Explain implications of fixing high poverty line for policy making
Dear Student,
Poverty line is fixed after considering the basic necessities of life. It is a challenging task as for some people something would be basic necessity and for others it would be a luxury. For example, TV would be a necessity for someone and luxury for others. If high poverty line is fixed, the number of poor will increase and it will be difficult to estimate the exact situation of poverty in a country. This will result in poor distribution of resources in poverty alleviation programmes. There will be an increase in the number of poverty alleviation program which will lead to increase in government's expenditure.
Hence, the poverty line should neither be fixed high nor should it be low.
Poverty line is fixed after considering the basic necessities of life. It is a challenging task as for some people something would be basic necessity and for others it would be a luxury. For example, TV would be a necessity for someone and luxury for others. If high poverty line is fixed, the number of poor will increase and it will be difficult to estimate the exact situation of poverty in a country. This will result in poor distribution of resources in poverty alleviation programmes. There will be an increase in the number of poverty alleviation program which will lead to increase in government's expenditure.
Hence, the poverty line should neither be fixed high nor should it be low.