Extreme poverty more than halves in India: World Bank – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/extreme-poverty-more-than-halves-in-india-world-bank/article65330343.ece

Extreme poverty in India has declined by over 12 percentage points during 2011-2019, a World Bank working paper has said.This is the second working paper after a recent International Monetary Fund paper that talked about poverty reduction. However, while the former dealt with the period before Covid, the latter focuses on the period during the pandemic.

The World Bank paper said extreme poverty was as low as 0.8 per cent in the pre-pandemic year of 2019, and food transfers were instrumental in ensuring that it remained at that level in the pandemic year 2020. Extreme poverty is measured as the number of people living on less than $1.90 per day ( Rs. 144.40 at Rs. 76 a dollar).

“Our preferred estimates suggest that the poverty head-count rate is 10.2 per cent in 2019, down from 22.5 per cent in 2011,” said the paper titled ‘Poverty in India Has Declined over the Last Decade But Not As Much As Previously Thought’ and authored by Sutirtha Sinha Roy and Roy van der Weide.

The paper said poverty reduction was higher in rural areas (down from 26.3 to 11.6 per cent between 2011 and 2019 or 14.7 percentage points) than in urban areas (from 14.2 to 6.3 per cent during the same period or 7.9 percentage point).

Consumption inequality

Consumption inequality in India has moderated after 2011, with almost no change between 2015 and 2019. Farmers with small landholding sizes have experienced higher income growth. Real incomes for farmers with the smallest landholdings have grown by 10 per cent in annualised terms between 2013 and 2019.

However, the paper mentioned that urban poverty rose by 2 percentage points in 2016 (coinciding with demonetisation) and rural poverty rose by 10 basis points in 2019 (coinciding with a slowdown in the economy).

“We observe a slight moderation in consumption inequality since 2011, but by a margin smaller than what is reported in the unreleased NSS-2017 survey. Finally, the extent of poverty reduction during 2015-2019 is estimated to be notably lower than earlier projections based on growth in the private final consumption expenditure reported in the national account statistics,” it says.

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