The basic difference between the extremely poor and the poor categories is that in the former, the total annual household income (Rs.15,350) is substantially less than the food consumption requirement (Rs.18,497), while in the latter the annual total household income (Rs.40,566) is sufficient to fulfill the food consumption requirement, although not enough to fulfill the total consumption requirements (excluding durables) (Rs.41,092). Therefore the distinguishing feature between these two classes of the poor is that the extremely poor are obliged to use loans for food consumption requirements, while those in the poor category do not have to do so. Similarly in the extremely poor category the total consumption requirements (excluding durables) (Rs.23,722) is greater than the annual total household receipts including transfers and remittances received. In the poor category, by contrast, the total receipts (Rs.45,818) are greater than the total consumption requirements. In the non-poor category, annual total household income is not only enough to fulfill food consumption, but also more than enough to finance total consumption (excluding durables).

In urban areas, the total household incomes of the extremely poor and the poor of Rs.30,266 and Rs.53,830, were only 39.5 and 70.9 percent of the poverty line, respectively. In the rural areas, household income levels of the extremely poor and the poor are 21.6 and 61.9 percent of the poverty line, respectively.

Transfers, especially the remittances, supplement considerably the total income of both the extremely poor and the poor categories. For the extremely poor, remittances account for 16% and total transfers 20.9%, and for the poor, remittances account for 4.2% and total transfers 5.3 percent of the total receipts. Despite the large transfers the current receipts of the extremely poor fall short of their consumption levels by 35 percent and they have to resort to credit and sale of assets to finance their meager consumption levels. As much as 17% of total consumption of the poor is financed through credit and 5% through the sale of land. Even though the poor on average spend less than the total receipts, yet a large number of households amongst them do use credit and proceeds from the sale of assets to finance their consumption; 10% of the consumption of the poor is financed through net credit and 2% through the sale of assets. The deficit between food consumption requirements and total household receipts of the extremely poor is much higher in the rural areas than in urban areas.