‘India has eliminated extreme poverty,’ claims US think-tank

The report, authored by noted economists, saw the findings as an encouraging development and said, time has come for India to graduate to higher poverty line, much like other developed counterparts

New Delhi: India has eliminated extreme poverty and is now eligible to move to a higher poverty line, claimed Brookings, a US-based think-tank, in its report.

Citing a comprehensive set of data, it said that the country has registered a decline in headcount poverty ratio (HCR) and a significant jump in household consumption expenditure, which in turn has helped it in getting rid of abject poverty. The report, authored by noted economists Surjit Bhalla and Karan Bhasin, saw the findings as an encouraging development and said, time has come for India to graduate to higher poverty line, much like other developed counterparts.

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The Brookings report attributes the country’s freedom from extreme poverty to PM Modi government’s policy thrust on redistribution under several welfare programs. It says that the government’s sharp focus on providing basic amenities to the entire population via cooking gas, housing for all, toilet constructions, piped water, and electricity supply to urban as well as rural belts went a great deal in enabling and facilitating an environment for all-inclusive growth.

The government’s explicit focus on improving development indicators could have been the game-changer behind this change, says the report. The report finds growth in per capita consumption, a decline in urban and rural inequality and a drastic decline in the country’s poverty index.

According to the Brookings Report, the real per capita consumption growth was recorded at 2.9 per cent per annum while rural growth was at 3.1 per cent per annum staying higher than urban growth of 2.6 per cent. It also found an unprecedented decline in both urban and rural inequality. The urban Gini (x100) declined from 36.7 to 31.9; the rural Gini declined from 28.7 to 27.0.

The Headcount Poverty Ratio (HCR) for the 2011 PPP$ 1.9 poverty line has declined from 12.2 per cent in 2011-12 to 2 per cent in 2022-23, equivalent to 0.93 percentage points (ppt) per year. Rural poverty stood at 2.5 per cent while urban poverty was down to 1 per cent, the report found.

Incidentally, the decline in HCR at the higher poverty line is remarkable given that in the past it took 30 years for India to witness a similar decline in poverty levels as now witnessed over 11 years, it said. On a closing note, the report said India should now graduate to a higher poverty line, which would then provide an opportunity to redefine existing social protection programs in order to give greater support to the genuine poor.