Table of Contents
India Achieves Major Milestone: Extreme Poverty Falls to 5.3%
- India has reached a significant achievement in poverty reduction, bringing down its extreme poverty rate to 5.3% in 2022–23.
- In 2011–12, the extreme poverty rate stood at a much higher 27.1%, showing a remarkable decline over the decade.
- This progress is even more notable as the World Bank recently updated its global poverty threshold from $2.15 to $3 per day (2021 PPP).
- Despite the more stringent benchmark, India’s reduction in poverty is seen as a major success.
Major Trends & Numbers
- Sharp Decline in Numbers: Extreme poor dropped from 344 million to 75 million between 2011–12 and 2022–23, lifting 269 million people out of poverty.
- $2.15/Day Benchmark: Poverty rate dropped from 16.2% to 2.3%, meaning 171 million people moved above this threshold.
- Present Low-Income Status: As of 2024, approximately 54.7 million Indians (5.44% of the population) live on less than $3 per day.
Rural vs Urban Impact
- Rural Poverty Drop: Declined from 18.4% to 2.8% between 2011–12 and 2022–23.
- Urban Poverty Drop: Fell from 10.7% to just 1.1%.
- Gap Narrowing: The rural-urban poverty gap reduced significantly—from 7.7 to 1.7 percentage points.
Key Drivers Behind the Decline
- Improved Consumption Data: India’s shift to the Modified Mixed Recall Period (MMRP) method provided more accurate and realistic consumption data.
- Food Support Schemes: Initiatives like PMGKAY gave free or subsidized food grains during the pandemic, a major factor in poverty reduction.
- Welfare & Infrastructure: Programs such as Direct Benefit Transfers (DBT) and PMGSY (rural roads) improved access to services and income opportunities.
- Economic Growth: Though GDP growth remains below pre-pandemic levels, it is steadily improving, supporting income and employment.
State-Level Contributions
- Key Contributors: Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—India’s five most populous states—were home to 65% of the extreme poor in 2011–12.
- Progress Achieved: These states were responsible for almost two-thirds of the overall decline in extreme poverty across the country by 2022–23.
Broader Poverty & Multidimensional Aspects
- $3.65/Day Poverty: Lower-middle-income poverty fell from 61.8% to 28.1%, lifting 378 million people.
- Multidimensional Poverty:Indicators such as education, health, and access to basic amenities have improved; for instance, West Bengal’s MPI fell to around 8.6%.
International Context & Comparison
- India’s Global Standing: The World Bank called India an “inspiring example” for global poverty reduction, despite raising the poverty threshold.
- Comparison with Pakistan: Pakistan has an overall poverty rate of 42.4% and an extreme poverty rate of 16.5%, both considerably higher than those in India.
Remaining Challenges
- Remaining Poor: About 75 million Indians (5.3%) remain in extreme poverty, mostly in underdeveloped rural regions.
- Risks & Vulnerabilities: Global uncertainties like inflation and trade disruptions may threaten future progress.
- Persistent Inequality: Structural challenges such as income inequality, rural distress, and regional disparities still need long-term attention.
The Road Ahead
- Strengthen social safety nets: Food, pensions, health, and education need consistent outreach.
- Focus on lagging regions: Target investments, jobs, and infrastructure in high-poverty pockets.
- Monitor real-time data: Continue using advanced consumption surveys to track poverty dynamics accurately.
- Foster economic resilience: Strengthen rural livelihoods through farm and non-farm employment schemes.
- Address inequality: Use fiscal and policy levers to ensure inclusive growth.
Important questions
- According to the World Bank report, what percentage of India’s population was living in extreme poverty in 2022–23?
- How many people were lifted out of extreme poverty between 2011–12 and 2022–23 in India?
- What role did food support schemes like PMGKAY play in reducing poverty?
- Which five states contributed most to India’s decline in extreme poverty?
- What is the current estimate of Indians living below the $3/day poverty line in 2024?
Conclusion
India’s extraordinary drop in extreme poverty—from 27.1% to 5.3% despite a tougher $3/day benchmark—is a historic feat, driven by smart data collection, targeted welfare, infrastructural expansion, and economic growth. Still, 75 million remain underprivileged, underscoring the need for sustained, inclusive, and region-specific policy interventions to ensure the gains are deepened and consolidated.
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