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Mint
09-06-2025
- Business
- Mint
The poverty line has moved but have basic vulnerabilities in India eased?
According to recent World Bank data, extreme poverty in India fell sharply from 27.1% in 2011–12 to just 5.3% in 2022–23, suggesting that 269 million people have been lifted out of poverty. While this achievement is nominally and statistically significant, the finding prompts a deeper and more structural methodological question: Are we counting fewer people as 'poor' in India, or are we failing to capture the full spectrum of vulnerabilities that persist among people in relative poverty which discussions based on 'poverty line' measurement miss in scope and reality? Historically, poverty measurement in India relied predominantly on income or consumption. This approach universally classifies individuals as poor or non-poor based solely on monetary criteria, offering a limited view of deprivation. In India, the Tendulkar Committee and later the Rangarajan Committee refined these poverty lines to reflect changing consumption patterns, but still focused primarily on income criteria. However, over the last two decades, the conceptualization of poverty, its measurement and assessment have all evolved significantly. Also Read: Mint Quick Edit | Poverty isn't widespread but prosperity needs to be Multidimensional frameworks, including the UNDP's Multidimensional Poverty Index (MPI), highlight that poverty encompasses deficits in education, health and living standards. Much of India's recent poverty discourse has centred on updated metrics, including the World Bank's shift from a poverty line of $2.15 to $3 per day and methodological refinements such as the adoption of thslum e 'modified mixed recall period' (MMRP) in consumption surveys. These changes, while noteworthy, underscore a deeper tension between statistical representation and lived deprivation. As critiques argue, estimates that rely on projected data, especially in the absence of post-pandemic ground surveys, risk portraying a linear trajectory of progress that may not fully account for access-based or structural vulnerabilities. A victory, but for whom?: While incomes have risen, they have not translated into improved well-being when access to essential public goods such as healthcare, education, transportation and digital infrastructure remains unequal. For multitudes, these access gaps persist, Uttar Pradesh (UP), Maharashtra, Bihar, West Bengal, and Madhya Pradesh, states that together made up 65% of India's extreme poor in 2011–12, account for two-thirds of India's overall reduction in extreme poverty. Yet, our Access Inequality Index Report 2025, which ranks Indian states based on access to essentials across five pillars—basic amenities, healthcare, education, socio-economic services and legal recourse—reveals a more uneven picture. While West Bengal and Maharashtra show relatively better rankings as 'achiever' and 'front-runner' states, respectively, UP and Bihar remain in the 'aspirant' category. This means that despite reductions in poverty as measured by consumption or income, the majority of households in these states continue to lack reliable access to vital public goods. For instance, only 19% of households in UP and 21.5% in Bihar have access to clean cooking fuel. Just 22.4% of households in Maharashtra and 33.7% in West Bengal have at least one member covered by a health insurance or finance scheme. Also Read: Himanshu: India needs official poverty data for effective policymaking States such as Kerala, Goa and Tamil Nadu consistently rank high in access to essential public services, with Goa leading overall and topping categories like basic amenities and healthcare. For example, 90% of households in Goa live in pucca houses, compared to 83.4% in Kerala and 87.9% in Tamil Nadu. Also, 91.9% of households in Goa have access to piped water supply within their dwelling or yard, while child immunization rates stand at 84.1% in Goa, 84.5% in Kerala and 85.7% in Tamil Nadu. In contrast, states such as Bihar, UP, Jharkhand and Chhattisgarh lag far behind. These deprivations are critical to people's well-being and show that income thresholds alone are insufficient markers of progress. A household that marginally exceeds the poverty line but lacks clean water or reliable healthcare remains vulnerable. These forms of deprivation often remain invisible in conventional consumption data, yet they are pivotal in determining a household's ability to recover from shocks, invest in education or participate fully in economic life. Alternative readings: An analysis of household income data by Azim Premji University's State of Working India 2021 highlights the unequal economic impact of the covid pandemic. The lowest 10 percentiles saw a steep 27% decline in income, compared to 23% among the 40th-50th percentiles and 22% among the top 10 percentiles. Income losses were more pronounced in urban areas. And although the setbacks may appear modest, the absolute income reduction for low-income households has been profound. This financial distress coincided with a sharp increase in non-monetary deprivations. Also Read: India must redraw its poverty line to reflect economic progress The Hunger Watch survey reported in 2022 that 80% of respondents experienced some form of food insecurity, with 25% suffering severe distress (like skipped meals and hunger); 41% observed a decline in the nutritional quality of their diets, and 67% were unable to afford cooking gas in the month preceding the survey. A Pew Research Centre report in 2022 also estimated that about 75 million additional people in India fell into poverty due to the pandemic. The subsequent State of Working India 2023 study reaffirmed these patterns, documenting a 22% drop in cumulative household income from March to October 2020, with the poorest households disproportionately affected, driving a notable surge in poverty rates. While welfare programmes such as the PM Awas Yojana, Ujjwala Yojana, Jan Dhan Yojana and Ayushman Bharat have expanded coverage, and direct benefit transfers have improved matters, challenges persist. Access to resources does not always translate to adequacy; owning a gas cylinder does not guarantee regular refills. Many essential services remain underfunded, unevenly implemented or inaccessible, particularly in rural and remote areas. All this makes access inequality the emerging face of poverty in India. Ultimately, despite significant improvements in headline poverty metrics, a closer examination reveals a more complex reality. The persistence of access disparities, relative poverty and regional inequalities underscores the need for clarity on poverty today. We must pay attention to institutional capacity, political will and the equitable distribution of public goods. The authors are, respectively, dean and research analyst, O.P. Jindal Global University.
Indian Express
29-05-2025
- Business
- Indian Express
Poverty fell significantly last year. Much of it was driven by GDP growth
The Household Consumption Expenditure Survey for 2022-23 and the 2023-24 reports by the National Statistics Office (NSO) enable us to arrive at estimates of poverty and inequality for recent years. Several researchers have drawn up estimates using the 2022-23 survey. Very few have, however, used the 2023-24 survey. We look at trends in head count ratio, the depth of poverty and trends in inequality from 2011-12 to 2023-24. The poverty lines (monthly per capita consumption expenditure) based on the methodology of the Rangarajan Committee for rural areas are Rs 972 in 2011-12, Rs. 1,837 in 2022-23 and Rs 1,940 in 2023-24. The poverty lines for urban areas are Rs1,407 in 2011-12, Rs 2,603 in 2022-23 and Rs 2,736 in 2023-24. In other words, for a family of five living in an urban area, the poverty line in 2023-24 will be Rs 13,680. The estimated total (rural and urban) poverty ratios declined from 29.5 per cent in 2011-12 to 9.5 per cent in 2022-23 and to 4.9 per cent in 2023-24. Poverty declined significantly between 2011-12 and 2023-24 (2.05 percentage points per annum), though the rate of decline was slightly less compared to the period 2004-05 to 2011-12 (2.2 percentage points per annum). The World Bank recently released a Poverty & Equity Brief for over 100 developing countries. It says India has significantly reduced poverty over the past decade. Extreme poverty (living on less than $2.15 per day in purchasing power parity terms) declined from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23 — more than 170 million were lifted above conditions of extreme poverty in this period. The number of people below the poverty line criteria for lower-middle-income countries — $3.65 per day — fell from 61.8 per cent to 28.1 per cent. Poverty declined significantly between 2022-23 to 2023-24. In a year, it fell from 9.5 per cent to 4.9 per cent. What can this achievement be attributed to? Poverty is determined by factors such as GDP growth, prices and safety nets. GDP growth increased from 7.6 per cent in 2022-23 to 9.2 per cent in 2023-24 — an increase of 1.6 percentage points in one year. The consumer price index (CPI) declined from 6.7 per cent in 2022-23 to 5.4 per cent in 2023-24 — a decline of 1.3 percentage points. However, food inflation increased from 6.6 per cent to 7.5 per cent during the same period. There does not seem to be significant changes in welfare programmes that make up the safety next. It appears, therefore, that GDP growth could be a proximate reason for the decline in poverty in 2023-24 as compared to that of 2022-23. However, we need to exercise caution before coming to a definite conclusion, based on a year of steep change. Another survey could confirm if this is a trend. We also examine the depth of poverty for India by looking at poverty ratios using different cut-offs of the poverty line (PL) for the period 2011-12 to 2023-24. The first issue is whether the poverty ratios with raised poverty line cut-offs are declining as fast as those with the actual poverty line. The second is about the location of the poor — are they placed much below the poverty line or around the poverty line? The poverty ratio (rural and urban) declined by 20 percentage points between 2011-12 and 2022-23 and by 24.6 percentage points between 2011-12 and 2023-24. Even if we raise the poverty line to 125 per cent, the reduction in poverty ratio is 28.4 percentage points between 2011-12 to 2022-23 and 34.2 percentage points between 2011-12 and 2023-24 (Table 1). Higher reduction is also true for the poverty ratio based on 115 per cent and 150 per cent of poverty line. The head count ratio is criticised on the ground that it does not measure the 'depth' of poverty. It is seen, however, that more than 50 per cent of the poor lie between the third and fourth quarter of the poverty line. This is true for both the years — 2011-12 and 2022-23. In fact, in 2022-23, 56 per cent of the rural poor and total poor fall in this segment. In a similar vein, a large section of the non-poor are just above the poverty line — between 115 and 125 per cent of this yardstick. Inequality in consumption also declined during the period 2011-12 to 2022-23 and from 2022-23 to 2023-24. The Gini coefficient estimated by the National Statistical office shows that inequality fell from 0.310 in 2011-12 to 0.282 in 2022-23. The decline in inequality was higher for urban areas. However, it is surprising to see that inequality in consumption declined significantly in one year — 2022-23 to 2023-24. The Gini coefficient fell from 0.282 in 2022-23 to 0.253 points — a decline of 0.029 points. On the other hand, the decline during the 11 year period 2011-12 to 2022-23 is almost similar — 0.028 points. One has to examine the significant decline in inequality in one year between 2022-23 and 2023-24. To conclude, there has been a significant decline in poverty. The poverty ratio is now in single digits. The overall inequality in consumption expenditure has come down a bit. Significant decline in poverty in one year between 2022-23 and 2023-24 needs further confirmation. Our analysis shows that most of the poor are concentrated around the poverty line — this makes poverty more manageable. Rangarajan is Former Chairman, Economic Advisory Council to the Prime Minister and Former Governor, Reserve Bank of India. Dev is Chairman, Institute for Development Studies, Andhra Pradesh and Former Vice Chancellor, IGIDR, Mumbai
