Poverty in India
According to an International Monetary Fund paper, extreme poverty, defined by the World Bank as living on US$1.9 or less in purchasing power parity (PPP) terms, in India was as low as 0.8% in 2019, and the country managed to keep it at that level in 2020 despite the unprecedented COVID-19 outbreak.
[3] According to United Nations Development Programme administrator Achim Steiner, India lifted 271 million people out of extreme poverty in a 10-year time period from 2005–2006 to 2015–2016.
A 2020 study from the World Economic Forum found "Some 220 million Indians sustained on an expenditure level of less than Rs 32 / day—the poverty line for rural India—by the last headcount of the poor in India in 2013.
[13] The National Multidimensional Poverty Index (MPI) assesses simultaneous deprivations in health, education, and standard of living, with each dimension carrying equal weight.
[29][30] In their paper, economists Sandhya Krishnan and Neeraj Hatekar conclude that 600 million people, or more than half of India's population, belong to the middle class.
These differences in definitions yield a complex and conflicting picture about poverty in India, both internally and when compared to other developing countries of the world.
India's current official poverty rates are based on its Planning Commission's data derived from so-called Tendulkar methodology.
A realistic definition and comparison of poverty must consider these differences in costs of living, or must be on purchasing power parity (PPP) basis.
On this basis, currency fluctuations and nominal numbers become less important, the definition is based on the local costs of a basket of essential goods and services that people can purchase.
[18] The issue of Company rule in India and its effects on Indian poverty was raised by Anglo-Irish Whig politician Edmund Burke in the House of Commons of Great Britain; in 1778, Burke began an impeachment trial against East India Company officail Warren Hastings on charges including mismanagement of the Indian economy; Hastings was ultimately cleared of the charges in 1785.
[69][73] These colonial policies moved unemployed artisans into farming, and transformed India into a region increasingly abundant in land, unskilled labour, and low productivity.
[17][76] The colonial policies on taxation and its recognition of land ownership claims of zamindars and mansabdars, or Mughal era nobility, made a minority of families wealthy.
[78] (...) there was lack of food, of clothing, of housing and of every other essential requirement of human existence... the development policy objective should be to get rid of the appalling poverty of the people.The National Planning Committee, notes Suryanarayana, then defined goals in 1936 to alleviate poverty by setting targets in terms of nutrition (2400 to 2800 calories per adult worker), clothing (30 yards per capita per annum) and housing (100 sq.
[78] This method of linking poverty as a function of nutrition, clothing and housing continued in India after it became independent from British colonial empire.
In 1943, for example, despite rising agricultural output in undivided South Asia, the Bengal famine killed millions of Indians from starvation, disease and destitution.
Destitution was so intense in Bengal, Bihar, eastern Uttar Pradesh, Jharkhand and Orissa, that entire families and villages were "wiped out" of existence.
Using NSSO data regarding household expenditures for 1960–61, they determined that in order to achieve this food intake and other daily necessities, a rural dweller required an annual income of ₹ 170.80 per year (₹ 14.20 per month, adjusted to 1971 Rupee).
[93][94] Additionally, in 1976, the Indian government passed the Bonded Labor System Act in an effort to end debt bondage in India, a practice which contributes to generational poverty.
[96] There are wide variations in India's poverty estimates for 1990s, in part from differences in the methodology and in the small sample surveys they poll for the underlying data.
[99] The Suresh Tendulkar Committee set up to look into the people living under the poverty line in India submitted its report in November 2009.
This was revised in 1993, and the absolute poverty line was set at $1.08 a day for all countries on a purchasing power parity (PPP) basis, after adjusting for inflation to the 1993 US dollar.
[5] Thereafter, the World Bank determined poverty rates from those living on less than US$1.25 per day on 2005 PPP basis, a measure that has been widely used in media and scholarly circles.
[105] The Ministry of Statistics and Programme Implementation conducted the Household Consumption Expenditure Survey (HCES) during August 2022 to July 2023 and the factsheet was published on 24 February 2024.
[107] The below table shows the average MPCE (in rupees) across fractile classes (all-India) in 2022-23:[108] *Imputation includes quantity of consumption for a number of items, received and consumed free of cost through various social welfare programmes.
[124] While India may well be on the path to eradicating extreme poverty, it still lags well behind in other important development indicators, even in comparison to some of its neighbouring countries, especially in regard to health and education.
[22][23][133] Another reason proposed is India's launch of social welfare programs such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Midday Meal Scheme in government schools.
[137] India has achieved annual growth exceeding 7 percent over the last 15 years and continues to pull millions of people out of poverty, according to the World Bank.
The country has halved its poverty rate over the past three decades and has seen strong improvements in most human development outcomes, a report by the international financial institution has found.
Growth is expected to continue and the elimination of extreme poverty in the next decade is within reach, said the bank, which warned that the country's development trajectory faces considerable challenges.
Additionally, the report highlighted that India experienced a reduction in deprivation across all indicators, with notable progress seen among the most impoverished states and marginalised populations, including children and disadvantaged caste groups.
