Fixing income and price targets for the poor in india

The poverty line, generally defined as the minimum income level necessary to enable a person to consume a normatively stipulated basket of goods, is widely used to set income target for the poor. But mere provision of this target income will not lead the poor to adopt the normative consumption pattern. In order to induce them to do so, it is necessary to set suitable price targets along with the income target. An attempt has been made here to fix these targets assuming that the consumers' demand pattern can be represented by the linear expenditure system. A numerical exercise has been worked out for rural India.