The Indian Planning Commission’s state-wise poverty lines are widely used. Yet, until recently the underlying price adjustments were based on clearly outdated consumer price indices, and hence, we had reasons to expect the poverty measures to be biased. The new methodology, suggested by the Lakdawala Expert group, has greater credibility, but is still not uncontroversial.

This paper adopts the Engel methodology ?rst proposed by Hamilton (2001) to estimate new sets of consistent cost of living indices. Subsequently, new poverty estimates are provided. Our ?ndings suggest that the of?cial measures underreport poverty in North Eastern India, in states such as Assam, Bihar and West Bengal The Engel methodology also suggests larger state-wise price differences than implied by the of?cial poverty lines.