India's poverty rate sees sharp decline, falls to 5.3% in 2022-23
India has emerged as a crucial factor in offsetting a sharp global rise in poverty following the World Bank's announcement of a major revision to the International Poverty Line (IPL). The Bank raised the IPL from USD 2.15 per day (2017 purchasing power parity) to USD 3.00 per day (2021 PPP), a change that would have otherwise increased the global count of extreme poor by 226 million people.advertisementHowever, thanks to India's updated consumption data and improved survey methodology, the net global increase stood at 125 million - with India alone accounting for a reduction of 125 million in the revised estimates, a government release citing World Bank data said. The revision to the IPL reflects a combination of global changes, including revised national poverty lines in low-income countries, improved measurement of consumption - particularly food and non-food items - and the adoption of updated 2021 PPP estimates. These changes were introduced to better capture real-world living costs and consumption patterns across countries.
India's influence on this global recalibration has been significant. India's latest Household Consumption Expenditure Survey (HCES) employed the Modified Mixed Recall Period (MMRP) method, replacing the outdated Uniform Reference Period (URP). Under MMRP, frequently purchased items are recorded over shorter recall periods, allowing for a more accurate and realistic capture of household spending.advertisementThis methodological shift led to a notable rise in recorded consumption, which in turn contributed to a lower estimate of poverty. For instance, in 2011-12, applying the MMRP method brought India's poverty rate down from 22.9 per cent to 16.22 per cent, even when assessed under the older USD 2.15 poverty line.In the latest 2022–23 data, India's poverty rate stood at 5.25 per cent under the new USD 3.00 threshold, and dropped even further to 2.35 per cent under the previous USD 2.15 benchmark.Must Watch
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Time of India
an hour ago
- Time of India
Despite West Bengal raising threshold, India achieves big dip in extreme poverty
NEW DELHI: India's extreme poverty rate has fallen sharply over the past decade after the World Bank updated its international poverty line definition and included updated data in its June upgrade of the methodology. Based on the update, the latest World Bank data showed that the extreme poverty rate had declined from 27.1% in 2011-12 to 5.3% in 2022-23. The number of people living in extreme poverty also fell sharply during this period from 344.47 million in 2011-12 to 75.24 million in 2022-23. This would mean that nearly 270 million were lifted out of extreme poverty during the same period. In a blog, the World Bank said that the international poverty line for low-income countries has been raised to $3 per person per day from the existing $2.15 per person per day, and for lower middle-income countries it's changed from $3.65 to $4.20 per day and for upper middle-income countries it went up from $6.85 to $8.40. Given India's inflation rate, between 2017 and 2021, a revised extreme poverty line of $3 would constitute a 15% higher threshold than $2.15 expressed in 2021 prices and result in a 5.3% poverty rate in 2022-23. A new LMIC line of $4.20 would imply a 5% lower threshold for poverty than $3.65 adjusted in 2021 prices and yield a poverty rate of 23.9%, according to the World Bank. Using the new poverty line for low middle income countries (LMIC), which is at $4.20 per day per person, India's poverty rate fell to 23.9% in 2022-23 from 57.7% in 2011-12. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Perdagangkan CFD Emas dengan Broker Tepercaya IC Markets Mendaftar Undo The number of people in extreme poverty was down from 732.48 million in 2011-12 to 342.32 million in 2022-23, according to the data available on the World Bank's Poverty and Inequality Platform. Free and subsidised food transfers supported poverty reduction, and the rural-urban poverty gap narrowed. The five most populous states account for 54% of the extremely poor, it had said. According to the poverty and equity brief published by World Bank in April, extreme poverty (living on less than $2.15 per day) fell from 16.2% in 2011- 12 to 2.3% in 2022-23, lifting 171 million people above this line. Rural extreme poverty dropped from 18.4% to 2.8% , and urban from 10.7% to 1.1% , narrowing the rural-urban gap from 7.7 to 1.7 percentage points-a 16% annual decline. The poverty report had also said India has transitioned into the lower-middle-income category. Using the $3.65 per day LMIC poverty line, poverty fell from 61.8% to 28.1%, lifting 378 million people out of poverty. Rural poverty dropped from 69% to 32.5%, and urban poverty from 43.5% to 17.2%, reducing the rural-urban gap from 25 to 15 percentage points with a 7% annual decline, the April report had said. The updated World Bank data is expected to come as a shot in the arm for the govt and bolster its record of handling the economy and pursuing policies to push inclusive growth and lift millions out of poverty. Last year, Niti Aayog CEO BVR Subhramanyam had indicated that the poverty level could be less than 5% based on preliminary estimates on the household consumption expenditure (HCES) data released by the statistics office. World Bank has said that in recent years, the scope and quality of information provided by household surveys has improved enormously, particularly in low-income and lower-middle-income countries, offering a clearer view into people's welfare and day-to-day lives. Several research papers have also indicated the reduction in extreme poverty over the last decade thanks to robust growth. A survey released last year estimated poverty to have declined to 8.5% from 21% in 2011-12 and pointed out that chronic poverty has come down but there is a significant proportion of people who can slip back into poverty due to "accident of life". World Bank, which introduced the international poverty line (IPL) in 1990, has undertaken several updates to include changing prices and costs, and the latest update was undertaken on June 5. The first update to IPL happened in 2001, with subsequent revisions in 2008, 2015, 2022, and more recently this month. This latest update, which also applies to the poverty lines for middle-income countries, follows the release last year of a new set of PPPs based on prices collected in 2021 by the International Comparison Programme. It also reflects changes in national poverty lines, which is a big reason for the increase, especially for the line that tracks extreme poverty, according to the World Bank.
Time of India
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- Time of India
This Bollywood couple now owns Vijay Mallya's iconic Kingfisher Villa in Goa. Here's why it is now called the King's Mansion
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India Gazette
7 hours ago
- India Gazette
India defies global poverty trends amid World Bank's revised estimates
New Delhi [India], June 7 (ANI): While the World Bank's revision to global poverty estimates led to a global increase in the count of extreme poverty by 125 million, India emerged as a statistical outlier in a positive direction, according to the government's factsheet analysis. The World Bank recently raised the International Poverty Line (IPL) from USD 2.15 to USD 3.00 per day (based on 2021 purchasing power parity). The revision was intended to reflect updated costs of living and more accurate consumption data. The global poverty measures produced by the World Bank use purchasing power parities (PPPs) to account for differences in price levels across the world. These PPPs are periodically revised in light of new data on relative living costs. This adjustment was expected to sharply increase the global count of those living in extreme poverty which was visible on poverty figures, estimated at 226 million people. However, India's newly revised poverty data significantly softened the blow, reducing the count by 125 million. These figures offsets more than half the global increase. India's standout performance is largely attributed to improvements in data collection and measurement methods. The country's latest Household Consumption Expenditure Survey (HCES) adopted the Modified Mixed Recall Period (MMRP) method, replacing the outdated Uniform Reference Period. This change provided a more accurate picture of household consumption, capturing actual spending more effectively. As a result, India's poverty rate in 2022-23 stood at just 5.25 per cent under the new USD 3.00 poverty line, and 2.35 per cent under the older USD 2.15 line -- a dramatic decline from earlier decades. The data also showed rising household spending: average monthly per capita expenditure rose to Rs 4,122 in rural areas and Rs 6,996 in urban areas, excluding the value of items received free through social welfare programs. Additionally, consumption inequality fell, with the Gini coefficient declining in both rural and urban regions. The government's factsheet detail added that India's example shows how methodological integrity, better data, and sustained policy efforts can work together to deliver real developmental outcomes. (ANI)
