India Lifted 171 Million from Extreme Poverty in a Decade: World Bank

Chennai: Over the past decade India has lifted 171 million people from extreme poverty. Those living on less than $2.15 per day fell from 16.2 percent in 2011- 12 to 2.3 percent in 2022-23, finds the World Bank. However, Wage disparity remains high, with the median earnings of the top 10 per cent being 13 times higher than the bottom 10 per cent in 2023-24.

Rural extreme poverty dropped from 18.4 percent to 2.8 percent, and urban from 10.7 percent to 1.1 percent, narrowing the rural-urban gap from 7.7 to 1.7 percentage points—a 16 percent annual decline.

India also transitioned into the lower-middle-income category. Using the $3.65 per day LMIC poverty line, poverty fell from 61.8 percent to 28.1 percent, lifting 378 million people out of poverty. Rural poverty dropped from 69 percent to 32.5 percent, and urban poverty from 43.5 percent to 17.2 percent, reducing the rural-urban gap from 25 to 15 percentage points with a 7 percent annual decline.

Nevertheless, the World Bank finds that data for India over the entire available time series has undergone adjustments.

Over the last several decades, India has changed its method of collecting consumption data. Historically, the surveys collected consumption data using the Uniform Reference Period (URP), in which survey respondents are asked for their consumption during the preceding 30-day period. With the 2011–12 round of the National Sample Survey (NSS), the Modified Mixed Reference Period (MMRP) was introduced (in addition to the URP instrument), which asks survey respondents for their consumption over the preceding 7 days for perishable items, 365 days for five low-frequency items, and 30 days for the remaining items.

The five most populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—accounted for 65 percent of the country’s 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 per cent of India’s extremely poor (2022-23) and 51 per cent of the multidimensionally poor (2019-21).

As measured by the multidimensional poverty index (MPI), non-monetary poverty declined from 53.8 per cent in 2005-06 to 16.4 percent by 2019-21. The World Bank’s Multidimensional Poverty Measure is at 15.5 percent in 2022-23. India’s consumption-based Gini index improved from 28.8 in 2011-12 to 25.5 in 2022-23, though inequality may be underestimated due to data limitations, it said.

Wage disparity remains high, with the median earnings of the top 10 per cent being 13 times higher than the bottom 10 per cent in 2023-24.

Employment growth has outpaced the working-age population since 2021-22. Employment rates, especially among women, are rising, and urban unemployment fell to 6.6 percent in Q1 2024-25, the lowest since 2017-18. Recent data indicates a shift of male workers from rural to urban areas for the first time since 2018-19, while rural female employment in agriculture has grown.

However, youth unemployment is 13.3 per cent, increasing to 29 per cent among tertiary education graduates. Only 23 per cent of non-farm paid jobs are formal, and most agricultural employment remains informal. Self-employment is rising, especially among rural workers and women. Despite a female employment rate of 31 percent, gender disparities remain, with 234 million more men in paid work.

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