Q.Distinguish between absolute poverty and relative poverty.

Absolute poverty is measured against a fixed minimum standard of living, while relative poverty is measured by comparing a household's income with the average income of others in society.

Absolute poverty and relative poverty are two different ways of defining who is "poor."

Absolute poverty is based on a fixed, minimum standard of living — usually a minimum level of income or consumption expenditure needed to meet basic survival needs such as a minimum calorie intake and a basic bundle of non-food items (clothing, shelter, etc.). A person is absolutely poor if they fall below this fixed line, no matter how rich or poor others in society are. India's official poverty estimates (Alagh, Lakdawala, Tendulkar, Rangarajan Committees) are all based on this absolute concept.

Relative poverty, by contrast, is defined in comparison with the standard of living of others in the same society — for example, a household earning less than 50% of the national median income might be classified as relatively poor. Relative poverty can persist even when absolute deprivation has disappeared, because it depends on the distribution of income in society, not on a fixed minimum.

A frequent mistake is treating relative poverty as simply "less severe" absolute poverty — the two are different measurement concepts, not different degrees of the same thing. Students should also avoid saying relative poverty "can never be removed" without qualifying that it depends on the level of income inequality in society.