Extreme Poverty declines in India

Insight Bureau: According to a World Bank Policy Research Paper, extreme poverty has declined 12.3 average points between 2011 and 2019 in India.

In 2011, poverty stood at 22.5 percent and the count plummeted to 10.9 percent in the year 2019. The study also estimated that the decline in rural areas was much higher than in urban areas.

The Word Bank paper is titled ‘Poverty has Declined over the last decade But Not As Much As Previously Thought’ and is jointly authored by economists Sutirtha Sinha Roy and Roy van der Weide.

In urban areas the drop was found to be 7.4 percent lower than that in rural areas where the decline was reported to be 14.7 percentage points.

From 2011 to 2015 the decline was 3.4 percent points but it rose to a 9.1 percent between the years 2015 to 2019. The rate of poverty reduction between 2004 and 2011 is estimated at approximately 2.5% points per year.

It is said that the paper followed two different approaches to calculate the reduction and estimation of poverty.

“Both approaches yield qualitatively similar levels and trends in headcount poverty estimated at the $1.90 line: poverty is about 12.3 percentage points lower in 2019 than 2011,” it said.

“Real incomes for farmers with the smallest landholdings have grown by 10% in annualized terms between the two survey rounds (2013 and 2019) compared to a 2% growth for farmers with the largest landholding,” it also said.