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Extreme Poverty Reduced in India, As Per the New World Bank Report


Poverty in India UPSC: Relevance

  • GS 2: Issues relating to poverty and hunger.


Extreme poverty in India: Context

  • According to a recently released World Bank report titled ‘Poverty in India Has Declined over the Last Decade But Not As Much As Previously Thought’, extreme poverty in India dropped to 10.2% in the pre-Covid year of 2019 from 22.5% in 2011.


Extreme poverty reduced in India: Key points

  • The report also said that the pace of reduction of extreme poverty in rural India has been more dramatic than in urban areas.
  • The poverty level in rural and urban areas declined by 14.7% and 7.9% respectively, during the 2011-2019 period.
    • While the extreme poverty eased to 11.6% in rural areas in 2019, the urban poverty level stood at 6.3%.
  • The paper revealed that urban poverty increased by 2% in the demonetisation year of 2016 and rural poverty rose by 10% in 2019.
  • An IMF working report recently suggested that extreme poverty in India was as low as 0.8% in 2019 and the country managed to keep it at that level in 2020 despite the pandemic, by resorting to food transfers through the Pradhan Mantri Garib Kalyan Yojana.


Extreme Poverty Reduced in India, As Per the New World Bank Report_40.1


Consumption inequality

  • Consumption inequality in India has moderated after 2011, with almost no change between 2015 and 2019.
  • Small landholders (landholding <2 ha) have experienced higher income growth.
  • Real incomes for farmers with the smallest landholdings have grown by 10% between 2013 and 2019.


Consumer Pyramids Household Survey

  • The World Bank paper uses the Consumer Pyramids Household Survey (CPHS) model.
  • CPHS is an annual survey conducted by the Centre for Monitoring the Indian Economy (CMIE), to provide estimates of how poverty and inequality in India have evolved since 2011.
  • CPHS is more recent, has wider coverage, and collects comprehensive data from Indian household living conditions.
  • The CPHS is already being used by scholars to measure poverty in India.


Extreme Poverty Reduced in India, As Per the New World Bank Report_50.1


What is Extreme poverty?

  • The number of people living on less than $1.90 a day (roughly Rs 145), are said to be living in the state of extreme poverty.


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