Extreme poverty In India down to 5.3% in 2022-23: World Bank – Economy News

India’s extreme poverty fell to 5.3% in 2022-23 from 27.1% in 2011-12, a much sharper decline than in previous decades, the World Bank said, releasing updated data. Only 75.24 million were suffering extreme poverty in the country in 2022-23, as against 344.47 million in 2011-12, it said, implying a massive 269 million came out of poverty during the period.

The sharp reduction in estimated poverty was despite the World Bank raising its poverty threshold to $3 (daily consumption) from $2.15 earlier, and adopting 2021 Purchasing Power Parities (PPPs).

As per the earlier $2.15 poverty rate (based on 2017 prices) only 2.3% of Indian population were living in extreme poverty in 2022-23 , down from 16.2% in 2011-12. In terms of the absolute number of poverty-stricken people, this meant a reduction to 33.66 million in 2022-23, from 205.93 million in 2011-12. In other words 172 million people were lifted above that poverty line during the period.

The World Bank also revised its lower-middle-income category (LMIC) poverty line of $4.20 per day (from $3.65 in 2017 prices), and as per this, the share of Indians living below the line fell from 57.7% in 2011-12 to 23.9% in 2022-23. The number of people living under the LMIC line reduced from 732.48 million to 342.32 million in these 11 years.

The changes adopted by the World Bank resulted in an upward revision of the global extreme poverty rate in 2022 from 9% to 10.5%, and an increase in the number of individuals living below the international poverty line from 713 to 838 million.

While all regions saw upward revisions of poverty rate, South Asia saw a downward revision from 9.7% to 7.3%. Thanks to the revisions, Bangladesh’s extreme poverty is now estimated at 8.01% in 2022, and Sri Lanka’s 2.71%.

As for India, after the updates, the rural people in the top 60 pecentile were 54.56% in 2022, and 45.44% were in the bottom 40. Among the urban population, only 25.78% were in the bottom 40 and 74.22% in the top 60. The difference among males and females in the 40/60 divide was marginal, but education had a major impact on the well-being of people.

Reports citing the results of India’s household consumption expenditure surveys (HCES) showed a “sharp decline” in poverty incidence. For these assumptions, the poverty line, defined by the Suresh Tendulkar committee one and half a decade ago, is applied on the HCES findings. As such, 90% of rural Indians reported average monthly per capita expenditure of less than Rs 5,763 in 2023-24, while those in the 0-5% “fractile class,” at the bottom of the pyramid, just Rs 1,677, and persons in the 5-10% class Rs 2,126. Given the high inflation rates over the recent years, these numbers betray very low purchasing power among vast sections of people, according to some economists.

NITI Aayog sources had earlier told FE that anew indicator to measure “extreme poverty” is likely to be developed by the think tank after consultations with several ministries. The think-tank is expected to form a committee to first fix a threshold income level, which can be used to measure extreme poverty, and then formulate a methodology to measure it on a periodic basis.

Multidimensional poverty index (MPI) is another way of estimating poverty, but it doesn’t give “useful information”, NITI Aayog Member Arvind Virmani had told FE, calling for   income-based poverty estimate. 

In April, while sticking to the $2.15 threshold, the World bank said the country’s five most populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—accounted for 65% extreme poor in 2011-12 and contributed to two-thirds of the overall decline in extreme poverty by 2022-23. “Nevertheless, these states still accounted for 54% of India’s extremely poor (2022-23) and 51%of the multidimensionally poor (2019-21). As measured by the multidimensional poverty index (MPI), non-monetary poverty declined from 53.8% in 2005-06 to 16.4% by 2019-21. The World Bank’s Multidimensional Poverty Measure is at 15.5% in 2022-23,”the bank had then said.

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