India has recorded a sharp drop in poverty over the past decade, the World Bank has declared this in its latest report “Poverty & Equity Brief”, showing that extreme poverty fell 2.3% in 2022-23, against 16.2% in 2011-2012. This marks a quarter of a dramatic work, with 171 million people raised above the international poverty line of $ 2.15 per day.
At the same time, the poverty measured by the lower average income line of $ 3.65 per day increased from 61.8% to 28.1%, which allowed 378 million people to leave poverty. The transition from India to a lower average income country was accompanied by significant gains in rural and urban areas.
The report stressed that 171 million people were withdrawn from extreme poverty and 378 million exceeded the poverty line during this period.
Rural-urban stages are shrinking
The Urban-Rural ditch has also shrunk. Extreme poverty in rural areas increased from 18.4% to 2.8%, while urban poverty increased from 10.7% to 1.1%, narrowing the rural-urban gap from 7.7 percentage points to only 1.7. Larger poverty under the line of $ 3.65 shows a similar trend, with rural poverty down 69% to 32.5%, and urban poverty from 43.5% to 17.2%.
Five main states – Uttar Pradesh, Maharashtra, Bihar, Western Bengal and Madhya Pradesh – represented 65% of the extremes of India in 2011-2012 and were responsible for two -thirds of the national drop in extreme poverty. In 2022-2023, these states still represented 54% of the extremely poor population of India.
Job
One of the most important developments reported in the report is that employment growth has exceeded the expansion of the working age population since 2021-2022. Urban unemployment fell to 6.6% in T1 FY24 / 25, the lowest since 2017-2018. Female employment has also shown encouraging signs, especially in rural agriculture, even if gender disparities remain – with 234 million men more than women in paid work.
Despite these earnings, the challenges persist. Unemployment of young people was 13.3%, going strongly to 29% among young people formulated by the colleges. Official employment remains limited, with only 23% of unspeakable jobs as formal. Informality continues to dominate the agricultural sector, while independent work increases, especially among rural workers and women.
Despite an increase in the participation of the female active population at 31%, gender disparities remain striking, with 234 million men more than women in paid employment.
Multidimensional poverty
India has also made significant progress in reducing multidimensional poverty, which takes into account access to education, health and basic services. The measurement of multidimensional poverty (MPM) fell to 15.5% in 2022–23, against 53.8% in 2005-2006. However, 29.9% of the population does not have access to limited standard and 13.8% of adults did not finish primary education.
The other indicators include:
Only 1% of the population does not have access to electricity
11.2% lack access to improving drinking water sources
14.9% of the poverty rate among people with higher education against 35.1% among those without formal education
Inequality remains
Regarding consumption inequality, the GINI index has improved slightly from 28.8 to 25.5 between 2011–12 and 2022-23. However, income inequality remains severe. Data from the global inequality database show that the income index of India Gini going from 52 in 2004 to 62 in 2023. In 2023-24, the highest 10% gained 13 times more than the lowest 10%.
Revised thresholds to allocate future estimates
The World Bank warns that poverty estimates can change with updated poverty thresholds. If the extreme poverty line is revised at $ 3.00 / day and the line of less than an average income of $ 4.20 / day, poverty rates from 2022 to 23 from India would be adjusted to 5.3% and 23.9% respectively.
Although these gains are remarkable, the World Bank highlights the importance of continuous improvements in education, sanitation and formal employment to support poverty reduction.
The World Bank also noted a drop in multidimensional poverty, with its internal measure, the rate of 15.5% in 2022-2023, compared to 53.8% in 2005-2006. These measures represent not only income, but also deprivation of education, sanitation, drinking water and access to electricity.
