Poverty in India has seen changes over the decades. The poverty rate has decreased remarkably since the late 20th century. The latest reports suggest that the current poverty rate is between 4 and 4.5 percent. This marks a substantial reduction in extreme poverty levels.
Recent Findings from the State Bank of India
The annual Household Consumption Expenditure Survey (HCES) conducted from August 2023 to July 2024 provided critical vital information about poverty trends. The State Bank of India (SBI) released a report indicating that rural poverty fell to 4.86 percent in FY24, down from 7.2 percent in FY23. Urban poverty also decreased to 4.09 percent from 4.6 percent in the previous year.
Historical Poverty Trends
The decline in poverty can be traced back through various years, showing a consistent downward trend. The World Bank has provided data denoting the poverty rate in India over the years. Below is a summary of key figures:
- 1977 – 63.11%
- 1983 – 56.26%
- 1987 – 50.59%
- 1993 – 47.64%
- 2004 – 39.91%
- 2009 – 32.87%
- 2011 – 22.53%
- 2015 – 18.73%
- 2017 – 13.37%
- 2018 – 11.09%
- 2019 – 12.73%
- 2020 – 14.72%
- 2021 – 11.9%
Poverty Headcount Ratio
According to NITI Aayog, the Poverty Headcount Ratio has decreased from 29.17% in 2013-14 to 11.28% in 2022-23. This reflects achievement in poverty reduction efforts. Over the last nine years, approximately 24.82 crore Indians have escaped multidimensional poverty.
Factors Contributing to Poverty Reduction
Several factors have contributed to the decline in poverty rates. Key reasons include:
- Higher consumption growth among the lowest income decile.
- Government support initiatives aimed at poverty alleviation.
- Inflation adjustments to the poverty line, allowing for accurate assessments.
Poverty Line Adjustments
The SBI report adjusted the poverty line for inflation, setting it at Rs 1632 for rural areas and Rs 1944 for urban areas for 2023-24. These adjustments were based on the recommendations of the Suresh Tendulkar committee, which established the poverty line in 2011-12.
Rural vs Urban Poverty
Poverty rates differ between rural and urban areas. The SBI report indicates that rural poverty has seen a sharper decline compared to urban poverty. The following figures illustrate this trend:
- Rural Poverty – 4.86% in FY24 (down from 25.7% in FY12)
- Urban Poverty – 4.09% in FY24 (down from 13.7% in FY12)
Impact of Food Prices
Food prices affect overall expenditures. The SBI report notes that changes in food prices impact not only food-related spending but also general consumption patterns. This marks the importance of stable food prices in poverty reduction efforts.
Future Projections
The SBI report suggests that poverty estimates may undergo minor revisions once the 2021 census is completed. The new census data will provide updated vital information about the rural-urban population share. It is believed that urban poverty could decline further with continued economic growth.
Major Committees on Poverty Estimation
Various committees have shaped the understanding and estimation of poverty in India:
- Lakdawala Committee (1993): Recommended a calorie-based approach to measure poverty.
- Tendulkar Committee (2009): Introduced a uniform all-India urban poverty line.
- Rangarajan Committee (2014): Reinstated separate rural and urban poverty lines.
Government Initiatives for Poverty Eradication
The Government of India has launched several initiatives aimed at poverty eradication:
- Affordable Healthcare: Ayushman Bharat Yojana, Pradhan Mantri Bharatiya Janaushadhi Pariyojana.
- Social Security: Pradhan Mantri Matru Vandana Yojana, Pradhan Mantri Garib Kalyan Anna Yojana.
- Financial Inclusion: PM Jan Dhan Yojana, PM Ujjwala Yojana.
- Employment and Skill Development: MGNREGA, PM Kaushal Vikas Yojana.
