Extreme poverty nearly eliminated in India, says World Poverty Clock

Aditi Tandon

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New Delhi, March 2

In a significant development on Saturday, the World Poverty Clock showed India’s extreme poverty at less than 3 per cent in signs that the country has now eliminated acute levels of poverty.

The World Poverty Clock said less than 3 per cent of the Indian population is now living below the extreme poverty line of $1.9 PPP (purchasing power parity) a day, which comes to around 3.4 crore people. In a parallel development, Brookings Institution, a leading US think tank producing research in economy, cited data to confirm elimination of extreme poverty in India and argued that India should now graduate to a higher poverty line. In a commentary published by the Brookings Institution, economists Surjit Bhalla and Karan Bhasin say, “Official data now confirms that India has eliminated extreme poverty, as commonly defined in international comparisons. This is an encouraging development with positive implications for global poverty headcount rates. This also means that time has come for India to graduate to a higher poverty line, much like other countries. The transition to a higher poverty line provides an opportunity to redefine existing social protection programme particularly with the objective of better identification of intended beneficiaries and providing greater support to the genuine poor.”

The authors used the just released Indian official consumption expenditure data for 2022-23 providing the first official survey-based poverty estimates for the country in over 10 years.

The data shows real capita consumption growth of 2.9 per cent per annum since 2011-12 with rural growth at 3.1 per cent per annum significantly higher than the urban growth of 2.6 per cent. There has been a decline in both urban and rural inequality. “High growth and large decline in inequality have combined to eliminate poverty in India for the PPP$ 1.9 poverty line. Here we use the PPP$ 1.9 line (2011 prices) rather than the PPP$ 2.15 line at 2017 prices because the former closely corresponds to the official India Tendulkar poverty line. The Headcount Poverty Ratio (HCR) for the 2011 PPP$ 1.9 poverty line has declined from 12.2 per cent in 2011-12 to 2 per cent in 2022-23, equivalent to 0.93 percentage points per year. Rural poverty stood at 2.5 per cent while urban poverty was down to 1 per cent. For the PPP$ 3.2 line, the HCR declined from 53.6 per cent to 20.8 per cent (almost 3 percentage points per year),” the authors say.