Meaning URP, MRP, MMRP

The World Bank’s new poverty rate estimate of 12.4% does not mean that Indians have suddenly become richer. In fact, it is how you collect data that determines the poverty rate. What are the methods in vogue?

Written by Udit Misra

October 7, 2015 01:28 AM IST

3 min read

world bank, world bank poverty, world bank poor, poverty line, new poverty line, world bank survey, world bank poverty survey, world bank news, poverty survey, latest news, news

Both estimates are for 2011-12. According to the government-endorsed India Rural Development Report 2013-14, however, poverty in rural India fell much faster in the period 2004-12 as compared to the preceding decade.

The World Bank has this week released a report saying the proportion of people living in extreme poverty has fallen to single digits in 2015: 9.6 per cent, down from 12.8 per cent in 2012. This is a first since the Bank started compiling such data in 1990. The other main takeaway was the claim that India has been overestimating its poverty rate. Far from the 21.9 per cent (for 2011-12) calculated by the Suresh Tendulkar Committee, or the even higher 29.5 per cent pegged by the Rangarajan Committee, the World Bank’s estimate is just 12.4 per cent. But more than any real change in the condition of the poor, the differences in poverty rates for the same year only underlines the importance of the way in which data is collected.

It is important to understand that a poverty line is essentially a monetary value. The idea is to collect data on people’s consumption expenditure, and to ascertain how many people surveyed fall below that poverty line. In India, there were two main ways of collecting data: Uniform Reference Period (URP) and Mixed Reference Period (MRP). Up until 1993-94, the poverty line was based on URP data. This involved asking people about their consumption expenditure across a 30-day recall period. In other words, the information was based on the recall of consumption expenditure over the last month alone.

[related-post]

Since 1999-2000, however, data are being collected according to MRP. Under this method, data on five less-frequently used items are collected over a one-year period, while sticking to the 30-day recall for the rest of the items. The low-frequency items include expenditure on health, education, clothing, durables etc. Currently, all poverty line data are compiled using the MRP method. These include the most recent estimates by the Suresh Tendulkar and Rangarajan Committees.

The World Bank’s 12.4 per cent poverty rate estimate for 2011-12 does not mean that people have become richer overnight. Rather, the Bank has used a new method for collecting data, called the modified mixed reference period, or MMRP.

In this method, for some food items, instead of a 30-day recall, only a 7-day recall is collected. Also, for some low-frequency items, instead of a 30-day recall, a 1-year recall is collected. This is believed to provide a more accurate reflection of consumption expenditures.

When such data was collected, consumption expenditures for people in both urban and rural areas went up by 10 per cent to 12 per cent.

This happened essentially because people could better recall their food expenditure over a shorter, 7-day period than what they might have done over the longer 30-day period. The higher expenditures, combined with the high population density around the poverty line, essentially meant that the poverty rate for India (for 2011-12) came down sharply.

Story continues below this ad

Interestingly, the MMRP method was first used in 2009-10, alongside MRP.

Udit Misra

Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster. Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad. Professional Focus He writes three regular columns for the publication. ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments. GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week. Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old. Recent Notable Articles (Late 2025) His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections: Currency and Macroeconomics: "GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy. "GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025). "Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025). Global Geopolitics and Trade: "Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025). "The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book. "ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025). Domestic Policy and Data: "GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025). "ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets. "GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025). International Economic Comparisons: "GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025). "On the loss of Europe's competitive edge" (Oct 17, 2025). Signature Style Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities. You can follow him on X (formerly Twitter) at @ieuditmisra ... Read More

Tags:

World Bank