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Time of India
13 hours ago
- Business
- Time of India
Despite World Bank 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. 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
17 hours ago
- Business
- 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.
Indian Express
2 days ago
- Business
- Indian Express
At World Bank's raised poverty line of $3 a day, extreme poverty rate falls to 5.3% in 2022-23 from 27.1% in 2011-12
With the World Bank raising its threshold poverty line to $3 a day (daily consumption of less than $3) from the earlier $2.15 a day, the extreme poverty rate for India declines sharply to 5.3 per cent in 2022-23 from 27.1 per cent in 2011-12. In absolute terms, people living in extreme poverty fell from 344.47 million to just 75.24 million, latest data from the World Bank shows. At $2.15 daily consumption — the earlier poverty line based on 2017 prices— the share of Indians living in extreme poverty is 2.3 per cent, which is significantly lower than 16.2 per cent in 2011-12, according to the World Bank's estimates. The number of people living below the $2.15-per-day poverty line is recorded at 33.66 million in 2022, down from 205.93 million in 2011. Despite the World Bank revising its extreme poverty line to adjust for global inflation in 2021 prices, India seems to have fared well, with the poverty numbers holding good. At $3 a day threshold, India's extreme poverty rate for 2022-23 rises from 2.3 per cent (at a poverty line of $2.15 a day) to 5.3 per cent, the World Bank has estimates. Adjusting the earlier $2.15-per-day line for domestic inflation from 2017 to 2021, according to sources, brings the threshold poverty line to roughly $2.60—still lower in real terms than the new $3 a day benchmark. The share of Indians living below the revised lower-middle-income category (LMIC) poverty line of $4.20 per day (from $3.65 in 2017 prices) also fell from 57.7 per cent in 2011-12 to 23.9 per cent in 2022-23. In absolute numbers, people living under the revised LMIC poverty line dips from 732.48 million to 342.32 million in a period of 11 years. The World Bank estimates India's population at 1438.07 million in 2023, using its World Development Indicators database and the official Household Consumption Expenditure Survey. Based on the earlier LMIC line of $3.65/ day, India's poverty rate falls from 61.8 per cent to 28.1 per cent, with around 401 million Indians living below the $3.65/day line in 2022. Using the revised LMIC poverty line of $4.20 per day in 2021 prices, India's poverty rate drops to 23.9 per cent from 28.1 per cent in 2022-23. This may seem counter-intuitive, but sources said this is because the new threshold is about 5 per cent lower for India than the inflation-adjusted equivalent of the earlier $3.65 benchmark. When adjusted for domestic inflation between 2017 and 2021, the previous $3.65 line would be roughly $4.40 in 2021 prices, making the revised $4.20 line effectively a lower bar for India. Poverty rates for 2023-24 will be released in October under its Poverty and Inequality Platform (PIP). Sources in the government said these numbers have not been arrived at internally too. Under the $3.65-per-day LMIC line (in 2017 prices), rural poverty fell from 69 per cent in 2011-12 to 32.5 per cent in 2022-23, while urban poverty dropped from 43.5 per cent to 17.2 per cent. The gap by education level was even starker—35.1 per cent of Indians over 16 without any schooling lived below the poverty line in 2022-23, compared to just 14.9 per cent among those with a post-secondary education. According to the World Bank's multidimensional poverty index (MPI), non-monetary poverty in India declined from 53.8 percent in 2005-06 to 15.5 per cent in 2022-23. The index comprises six indicators, namely consumption or income, educational attainment, educational enrolment, drinking water, sanitation, and electricity. The NITI Aayog has estimated that India's population living in multidimensional poverty fell to 11.28 per cent in 2022-23 from 29.17 per cent in 2013-14. Data in the Household Consumption Expenditure Survey (HCES) 2023-24 also indicates a rise in monthly consumption in India. In 2011-12 prices, rural average monthly consumption spending per person increased to Rs 2,079 in 2023-24 from Rs 1,430 in 2011-12, a rise of 45.4 per cent. Urban average monthly consumption expenditure increased by 38 per cent to Rs 3,632 per person from Rs 2,630. Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More
Mint
01-05-2025
- Business
- Mint
Himanshu: India needs official poverty data for effective policymaking
Last week, the World Bank released its latest estimates of poverty for India. According to its Poverty and Equity Briefs , poverty in India declined from 16.2% in fiscal year 2011-12 to 2.3% in 2022-23, with 171 million people lifted out of it in 11 years—or 15.5 million persons per year. These estimates are based on its $2.15-per-day poverty line used to measure extreme poverty. These numbers differ from the World Bank's estimates of poverty using the same $2.15 poverty line on its Poverty and Inequality Platform (PIP). Indian poverty, according to this, was at 22.9% in 2011-12 and fell to 13% in 2021-22, with the number of poor falling by 107 million, or 10.7 million persons per year. Not just the level of poverty, the extent of its decline also varies vastly. Part of the reason for the Bank's sharp downward revision in poverty was its use of the recently-released 2022-23 Household Consumer Expenditure Survey (HCES). However, its PIP estimates for 2021-22 were made through a survey-to-survey imputation using the 'consumer pyramids' data of the Centre for Monitoring Indian Economy. The World Bank acknowledges problems in using HCES 2022-23 data for poverty and inequality measurements, given the substantial changes it underwent, but it has still used it. This is strange. The last time it found data on consumption expenditure non-comparable with past data was in 1999-00, and it did not use it for poverty estimation. None of its reports has Indian poverty estimates for 1999-00. The use of HCES 2022-23 is also responsible for the downward revision of the Bank's poverty estimates for 2011-12, the data of which is not controversial. Its new estimates as well as the PIP ones use the 2011-12 consumption survey of the NSSO and the same poverty line of $2.15. The downward revision is a result of a shift from the earlier estimates of consumption expenditure in 2011-12 that were based on a uniform recall period (URP) of 30 days to the modified mixed recall period (MMRP), which uses a mix of 7-day, 30-day and 365-day recall periods. These two sets of estimates are not comparable, with MMRP estimates pegging consumption expenditure significantly higher than URP estimates. As a result, using the same poverty line, estimated poverty using the MMRP method is only 16.2% in 2011-12, far less than 22.9% estimated earlier for the same year. The fact that there are now two World Bank estimates of poverty using the same poverty line is problematic in the context of assessing India's poverty reduction. It also raises basic questions over the World Bank's methodology of estimating poverty for countries with non-comparable data on consumption expenditure. The appropriate method would have been to use a poverty line that takes into account changes in the recall period such that the poverty estimates remain the same. After all, the number of poor in a country is a given fact and a methodology shift should not result in such a different poverty ratio. But even with the changes, both these World Bank estimates suggest a sharp deceleration in poverty reduction efforts. By its estimates, India managed to lift 175 million persons out of poverty between 2004-05 and 2011-12 using the same $2.15 poverty line. So an annual 25 million persons were lifted out of poverty. This declined after 2011-12 to only 10.7 million per year, if we go by the PIP estimates, and 15.5 million per year by the new estimates. While there are issues with the Bank's poverty estimates that stem from comparability and its choice of poverty line, as well as deflators and the implicit inter-temporal inflation used for arriving at rupee-equivalent poverty lines, these have never been relevant for policy analysis in India. India has been a pioneer in defining national poverty lines since independence. These have been used by several other countries to define and estimate poverty in their own countries. Unfortunately, there is no official poverty line for India currently, despite the Rangarajan panel that was set up to look into poverty estimation having submitted its report in 2014. Although there is consumption data available for 2022-23 and 2023-24, issues surrounding its robustness and comparability with earlier survey rounds warrant setting up a new committee to examine the data and suggest a national poverty line. With a significant proportion of India's population still living in poverty, its estimation simply cannot be left to international agencies. The country needs an official poverty estimate to aid policymaking and determine poverty trends after 2011-12. The author is associate professor at Jawaharlal Nehru University and visiting fellow at the Centre de Sciences Humaines, New Delhi.
