India’s Poverty Reduction: A Global Game Changer

India has achieved a remarkable reduction in extreme poverty, with the number of people living below the international poverty line plummeting significantly over the past decade. This substantial decline, highlighted by recent World Bank data, positions India as a positive outlier in global poverty reduction efforts, even as international benchmarks for poverty measurement have been revised upwards.

Key Takeaways

India saw a dramatic decrease in extreme poverty, from 344.47 million to 75.24 million people between 2011-12 and 2022-23.
The poverty rate in India dropped from 27.1% to 5.3% under the new, stricter World Bank definition.
India’s updated data and improved survey methodologies significantly offset the global increase in poverty figures caused by revised international poverty lines.

India’s Poverty Reduction Milestone

The World Bank’s latest global poverty update reveals that the number of individuals living in extreme poverty in India has fallen from 344.47 million to 75.24 million between 2011-12 and 2022-23. This translates to a reduction in the poverty rate from 27.1% to 5.3%. This significant achievement occurred despite the World Bank raising its extreme poverty benchmark to $3 daily consumption from the previous $2.15, incorporating updated Purchasing Power Parities (PPPs) from 2021.

Impact on Global Poverty Figures

The revision of the international poverty line was expected to increase the global count of extremely poor individuals by approximately 226 million. However, India’s updated consumption data and improved survey methodologies played a crucial role in mitigating this global rise. India’s revised figures alone offset about 125 million people from the expected global increase, demonstrating the significant impact of its poverty reduction efforts on the worldwide statistics.

Methodological Improvements and Real Progress

India’s poverty reduction is attributed not only to economic growth and welfare programs but also to advancements in data collection. The adoption of the Modified Mixed Recall Period (MMRP) method in the Household Consumption Expenditure Survey (HCES) provided a more accurate picture of household spending compared to the older Uniform Reference Period. This methodological shift, coupled with government initiatives like PM Awas Yojana, PM Ujjwala Yojana, and Jan Dhan Yojana, has contributed to tangible improvements in the lives of millions.

Shifting Poverty Thresholds

The World Bank also adjusted its lower-middle-income category poverty threshold to $4.20 per day from $3.65. Under this revised measure, the proportion of Indians below this line decreased from 57.7% in 2011-12 to 23.9% in 2022-23, with the absolute number falling from 732.48 million to 342.32 million. These figures underscore the sustained progress India has made in lifting its population out of poverty.