Poverty, A Significant Issue In India

Home / blog / Poverty, A Significant Issue In India

Poverty is a significant issue in India, despite being one of the fastest-growing economies in the world, clocked at a growth rate of 7.11% in 2015, and a sizable consumer economy. The World Bank reviewed and proposed revisions on May 2014 to its poverty calculation methodology and purchasing power parity basis for measuring poverty worldwide. According to this revised methodology, the world had 872.3 million people below the new poverty line, Nigeria, and Congo are expected to overtake India by the end of 2019. As of 2014, 58% of the total population were living on less than $3.10 per day. According to the Modified Mixed Reference Period (MMRP) concept proposed by World Bank in 2015, India’s poverty rate for period 2011-12 stood at 12.4% of the total population, or about 172 million people; taking the revised poverty line as $1.90

India Poverty rate since 1993 based on World Bank $1.99 PPP poverty line.
The World Bank has been revising its definition and benchmarks to measure up poverty since 1990, with a $2 per day income on purchasing power parity basis as the definition in use from 2005 to 2013. Some semi-economic and non-economic indices have also been proposed to measure poverty in India; for example, the Multi-dimensional Poverty Index placed 33% weight on number of years spent in school and education and 6.25% weight on financial condition of a person, in order to determine if that a person is poor.

The different definitions and different underlying small sample surveys used to determine poverty in India, have resulted in widely different estimates of poverty from 1950s to 2010s. In 2012, the Indian government stated 22% of its population is below its official poverty limit.
The World Bank, in 2011 based on 2005’s PPPs International Comparison Program, estimated 23.6% of Indian population, or about 276 million people, lived below $1.25 per day on purchasing power parity. According to United Nation’s Millennium Development Goals (MDG) programme 270 millions or 21.9% people out of 1.2 billion of Indians lived below poverty line of $1.25 in 2011-2012.

From late 19th century through early 20th century, under British colonial rule, poverty in India intensified, peaking in the 1920s. Famines and diseases killed millions each time. After India gained its independence in 1947, mass deaths from famines were prevented. Rapid economic growth since 1991, has led to sharp reductions in extreme poverties in India. However, those above poverty line live a fragile economic life.

As per the methodology of the Suresh Tendulkar Committee report, the population below the poverty line in India in 2009-2010 was 354 million (29.6% of the population) and that in 2011-2012 was 269 million (21.9% of the population). The Rangarajan Committee said in 2014 that the population below the poverty line in 2009-2010 was 454 million (38.2% of the population) and that in 2011-2012 was 363 million (29.5% of the population). Deutsche Bank Research estimated that there are nearly 300 million people who are middle class. If former trends continue, India’s share of world GDP will significantly increase from 7.3% in 2016 to 8.5% by 2020. In 2015, around 170 million people, or 12.4%, lived in poverty (defined as $1.90 (Rs 123.5)), a reduction from 29.8% in 2009.

The Asian Development Bank estimates India’s population to be at 1.28 billion with an average growth rate, from 2010-2015, at 1.3%. In 2014, 49.9% of the population aged 15 years and above were employed. However, there are still 21.9% of the population who live below the national poverty line. The World Poverty Clock shows real-time poverty trends in India, which are based on the latest data, of the World Bank, among others.

From November 2017, the World Bank started reporting poverty rates for all countries using two new international poverty lines: a “lower middle-income” line set at $3.20 per day and an “upper middle-income” line set at $5.50 per day. India falls in the lower middle-income category. Using the $3.20 per day poverty line, the percentage of the population living in poverty in India was 60% (2011). This means that 763 million people in India were living below this poverty line in 2011.

Source : Wikipedia
https://en.wikipedia.org/wiki/Poverty_in_India

Need Help? Chat with us
X