27-05-2025
- Business
- New Indian Express
The number of poor are falling in India; is it time to shift the poverty line now?
Last month, the World Bank released yet another set of poverty estimates for India and bang, bang. The hammer dropped. Extreme poverty is nearly dead. Just some 3.3 crore Indians are extremely poor as against 23 crore a decade ago.
According to the World Bank's Spring 2025 Poverty and Equity Brief, India has lifted 171 million out of extreme poverty. It also made strong gains in poverty reduction at the lower-middle-income level -- measured at $3.65 per day -- which fell from 61.8% to 28.1%, lifting 378 million out of poverty.
The latest estimates, coming in the backdrop of intense trade and terror tensions, sprinkle some much-needed stardust on the macroeconomic front.
Importantly, it allows the government to flash a V-sign as the numbers are in line with India's recent Household Consumption Expenditure Survey 2022-23, which too indicated that extreme poverty has been ripped out by the roots pegging poverty rate somewhere between 2.8 crore and 7 crore. The previous official poverty estimate in 2011 counted 26 crore, or 21.9% of the population as extremely poor.
Lastly, the estimates also conform with the 2020 IMF working paper by economists Dr Surjit Bhalla, Karan Bhasin and Arvind Virmani, which drew sharp criticism and praise for projecting poverty rate at 2.5%.
Meanwhile, according to the World Bank report, if the five most populous states including Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh accounted for 65% of India's extreme poor in 2011-12, they contributed to two-thirds of the overall decline in extreme poverty by 2022-23.
But hey, hold the jubilation.
Not all in the country are convinced that poverty has well and truly declined to the extent the statistics suggest and call for careful scrutiny. Critics counter that there's really no glory in telling people stuff they either don't believe or cannot accept as ground reality. They reason that in the absence of broad-based growth, there's no way of spinning the math to make poverty numbers look rosy and without growth, nothing can actually kill poverty. Not facts. Not figures. And certainly not a flock of forecasts.
