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INDIA’S PROGRESS IN REDUCING POVERTY: AN ANALYSIS



  Jun 25, 2024

INDIA’S PROGRESS IN REDUCING POVERTY: AN ANALYSIS



India is reportedly on the verge of a significant milestone in its fight against extreme poverty. According to government statisticians and economists, the country has made remarkable progress over the past decade. This essay delves into the data and insights that underscore India’s near-victory over extreme poverty.

A Closer Look at the Data

Reduction in Extreme Poverty

A decade ago, approximately 12% of India’s population lived on $1.90 per day or less, according to Purchasing Power Parity (PPP). This figure has now dropped to just 2%, indicating that millions of people have moved above the extreme poverty threshold. This substantial decline demonstrates significant improvements in the ability of the population to meet basic needs.

Decline in Higher Poverty

Higher poverty levels have also seen a significant reduction. Previously, 54% of the population lived on $3.20 per day or less. Today, this number has decreased to 17%, reflecting broader improvements in living standards across the country. These reductions highlight the effectiveness of policies and economic growth in alleviating poverty.

Key Findings from the NSSO Survey

The latest household consumption expenditure survey data from the National Sample Survey Organisation (NSSO) offers detailed insights into poverty levels across different states and regions in India. The data enables accurate estimates of poverty in both rural and urban areas, providing a clearer picture of the country’s progress.

Importance of Micro-Level Data

The availability of micro-level data allows for a nuanced analysis of poverty. This detailed information helps in understanding the specific needs of different regions and tailoring policies accordingly. The new data reveals that poverty is declining faster than previously believed, with extreme poverty dropping to 2% nationally.

The Poverty Headcount Ratio (HCR)

The Poverty Headcount Ratio (HCR) is a critical measure used to indicate the percentage of a population living below the poverty line. It provides a clear picture of the extent of poverty and is used to compare poverty levels across regions and over time. The study shows that at the $1.90 PPP poverty line, the percentage of people in poverty has dropped significantly from 12.2% to 2.2% over the past decade. This reduction is even more pronounced at the $3.20 PPP line, where poverty has fallen from 53.6% to 16.4%.

Regional Disparities and Progress

Varied Progress Across States

The latest data suggests that while some states have made remarkable progress, others still face significant challenges. States like Goa, Punjab, and Himachal Pradesh report very low poverty rates, whereas Bihar, Jharkhand, and Chhattisgarh still experience higher levels of poverty. For example, Bihar’s poverty rate, measured at $3.20 per day (PPP), dropped from 69.6% in 2011-12 to 23.3% in 2022-23. Kerala also saw a notable reduction, with its rate falling from 30.3% to 16.0% over the same period.

Success Stories

Many states have achieved substantial declines in their poverty headcount ratios. For instance, Andhra Pradesh’s extreme poverty rate fell from 4.9% to 1.0%, and Assam’s rate dropped from 20.7% to 3.2%. Bihar saw a significant reduction from 15.1% to 2.7%. Despite these successes, some states like Chhattisgarh continue to face higher poverty rates, though improvements are evident.

Rural and Urban Poverty

From 2011-12 to 2022-23, India witnessed significant reductions in poverty across both rural and urban areas. In 2011-12, about 13% of the rural population and 11% of the urban population lived in extreme poverty at the $1.90 PPP level. By 2022-23, these figures had dropped to about 2% for both rural and urban areas. At the $3.20 PPP level, rural poverty decreased from 60% to 20%, and urban poverty dropped from 40% to 12%.

Improvement in Living Standards

The average monthly spending per person increased from Rs 1,803 in 2011-12 to Rs 4,737 in 2022-23, indicating a substantial improvement in living standards. This increase in consumption reflects better economic conditions and improved access to resources.

Conclusion

India’s progress in reducing poverty over the past decade is commendable. The decline in both extreme and higher poverty levels highlights the effectiveness of targeted policies and economic growth. While challenges remain, particularly in some states, the overall trend is positive, suggesting that India is nearing victory in its battle against extreme poverty.




SRIRAM’S



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