Indian authorities say those who earn at least 50 cents a day make enough to live on, and are not poor.
The Planning Commission told the Supreme Court Tuesday that anyone with a daily income of over 50 cents in villages or 65 cents in cities should not be eligible for government assistance.
The commission says the amount is enough to pay for food, education and health.
The newly proposed poverty line is higher than the current level, which is set at 31 cents for rural areas and 54 cents for urban ones.
Critics have denounced the increase, saying it is an attempt to minimize poverty levels in the country.
The Supreme Court ordered the commission to adjust the poverty figure to reflect India's rising inflation which is estimated at 9.78 percent.