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What is monthly per capita expenditure? What are its limitations?
MPCE stand for Monthly Per-capita Consumer Expenditure.As the term suggests its the monthly expenditure per person.The importance of the measure is that it indirectly tells about the poverty level of the economy. India's average MPCE in 2007-08 was Rs772 in rural areas and Rs.1472 in urban areas. Around 65% of rural population is below national rural average of MPCE.This means that 65% rural population cannot spend even RS 772 on consumption of food grains,milk,oil etc. People don't have enough income even to buy basic necessities of life.
The limitations of this method as a measure of poverty are:
1. This mechanism does not help in judging the extent of poverty for an individual, thereby identifies poor only as a group and does not differentiate between the poor and very poor.
2. In this method, consumption expenditure is included but it does not take into account many other items which are associated with poverty.
The limitations of this method as a measure of poverty are:
1. This mechanism does not help in judging the extent of poverty for an individual, thereby identifies poor only as a group and does not differentiate between the poor and very poor.
2. In this method, consumption expenditure is included but it does not take into account many other items which are associated with poverty.