India’s growth in poverty reduction!

India still may have a reasonable number of poor, yet one can categorically say that it is no longer a “poor country”. True, India’s population has quadrupled in the 75 years since Independence, but its progress on poverty reduction has been steady, particularly in the last 30 years or so. And, the great news finally arrived after successive Central government efforts to fight poverty. That’s the summary of a joint report released earlier this week by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative. Titled ‘Unpacking Deprivation Bundles to Reduce Multidimensional Poverty’ (UDBRMP), the report is based on robust household survey data from 111 underlying developing countries and covers 6.1 billion people.

According to this report, the new poverty line of $2.15 per day, 10 per cent of Indians were poor in 2019, down from 22.5 per cent in 2011. Rural India account for 11.9 per cent of the poor and the urban areas 6.4 per cent. The new poverty estimate for India, done by Sutirtha Sinha Roy and Roy van der Weide of the World Bank’s Policy Research Working Paper, shows that “poverty in India had declined over the last decade but not as much as previously thought.”

”Extreme poverty is 12.3 percentage points lower in 2019 than in 2011, with greater poverty reductions in rural areas,” said the estimation published on the WB website. The WB in its latest addition has used consumption surveys — called Consumer Pyramid Household Survey — of the private data company, the Centre for Monitoring Indian Economy (CMIE). The CMIE has been conducting these surveys every fourth month since January 2014 with a sample size of 174,000 households in 28 states. The latest poverty figure based on these surveys is that of 2019, the year before the Covid pandemic struck.

In rural India, poverty has reduced more during 2011-2019 than the urban areas — 14.7 per cent and 7.9 per cent respectively. The WB analysis found a sudden surge in urban poverty in 2016, a 2 per cent increase over the preceding year. This has been attributed to demonetization. The fastest poverty reduction occurred in the years 2017 and 2018. With the new data on India’s poverty updated to the global system, the number of poor has increased. “The global poverty headcount in 2018 is revised slightly up from 8.7 to 8.9 per cent,” said the WB, adding: “The 2017 purchasing power parity (update on the basis of the new poverty line) by themselves reduce global poverty, which is more than offset by the new estimates for India that increase global poverty.

Improved nutrition, better sanitation, and increased asset ownership have halved India’s poverty rate between 2005-06 and 2015-16, according to a study by Oxford University. During this period, 270 million Indians were came out of poverty in what is perhaps one of the most significant wins of the Indian economic story. Although there are no statistics available after that, many experts feel, this figure might have been further reduced by more than 50 per cent. If in absolute terms, the number of poor fell from 630 million to 360 million during 2005-06 to 2015-16, now it might have got further reduced to around 150 million, thanks to initiatives continued in the past to improve the living standards of the new government headed by Narendra Modi. Simply due to significant improvements in nutrition and free food support, besides creating employment opportunities for rural and urban poor with massive infrastructure-building activities, poverty might have been brought down considerably for the rural poor, besides attending to their health issues. Added to it is the substantial decline in fertility that reflects a significant change in population dynamics. Overall, the reduction of poverty across the country by international agencies is a heartening sign as India is fast emerging as an economic as well as military power. Yet, the government may have to do much more, if it is sincere for total alleviation of poverty from the country.