Poverty Eradication in India: Successes, Gaps & Policy Imperatives

• The Household Consumption Expenditure Surveys (HCES) conducted by the National Statistical Office (NSO) for 2022–23 and 2023–24, along with a World Bank assessment, reflect a significant reduction in poverty levels in India.

Decline in Poverty and Emerging Policy Priorities

• Sharp Decline in Poverty Ratios: India’s all-India poverty rate dropped from 29.5% in 2011–12 to 4.9% in 2023–24, indicating near eradication of extreme poverty.
  • According to the World Bank’s $2.15/day (Purchasing Power Parity-PPP) benchmark, poverty declined from 16.2% to 2.3% between 2011–12 and 2022–23.
• Updated Poverty Lines (Rangarajan Committee Methodology):
  • Rural Poverty Line: Raised from ₹972 (2011–12) to ₹1,940 (2023–24).
  • Urban Poverty Line: Increased from ₹1,407 to ₹2,736.
  • Reflects adjustments for inflation and changing consumption needs.
• Improved Living Standards and Equity: The share of population below $3.65/day (PPP) (lower-middle-income line) dropped from 61.8% to 28.1%, indicating rising consumption levels.
• Falling Inequality: Gini coefficient (measuring consumption inequality) improved from 0.310 to 0.253, suggesting more equitable distribution of resources.

Key Drivers of Poverty Reduction

• Strong Economic Growth: Real GDP grew by 9.2% in 2023–24, generating employment and income.
• Moderated Inflation: Consumer Price Index (CPI) eased to 5.4%, increasing real purchasing power, especially for the bottom 40%.
• Enhanced Survey Methodology: The NSO adopted modern sampling techniques, expanded sectoral coverage, and updated consumption classifications, thereby improving data accuracy.
• Improved Welfare Delivery: Expansion of Direct Benefit Transfers (DBT), JAM trinity (Jan Dhan–Aadhaar–Mobile), and food security schemes enhanced last-mile service delivery.

Persisting Challenges

• Economic and Climate Vulnerability: Large populations remain one shock away from falling back into poverty. Health crises, climate shocks, and employment disruptions pose ongoing risks.
• Urban Welfare Gaps: Informal workers, gig economy participants & migrants in cities often remain underserved or excluded from social welfare schemes, including PDS, health insurance & housing support.
  • Portability of entitlements (e.g., ration cards) remains limited and uneven across states.
• High Food Inflation: Despite CPI moderation, food inflation (7.5% in 2023–24) continues to erode real incomes, particularly affecting the nutrition security of poor households.
• Regional Disparities: States such as Bihar, Odisha, and Jharkhand continue to report above-average poverty rates, underscoring the need for region-specific poverty alleviation, targeted investments, and infrastructure-led inclusive growth.
• Data Gaps in Urban Informality: Urban informal sector and gig workers are often undercounted in household surveys, potentially underestimating the scale of urban poverty.

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Way Forward

• Institutionalise Welfare: Integrate PMGKAY and DBT into long-term food and social security systems.
• Skill Development: Promote market-relevant skilling for SC/ST youth and minorities.
• Urban Poverty Focus: Implement rental housing, microcredit, and urban employment programs.
• Health & Education: Sustain investment in nutrition, education, and public health.
• Inclusive Monitoring: Use social audits and caste-based policy evaluation for equity.

Economic growth by itself does not ensure poverty alleviation. Sustainable poverty reduction depends on pro-poor, inclusive growth that prioritizes human development through education, healthcare, and institutional reforms such as land redistribution.

Reference: Indian Express | PMFIAS: Poverty in India

UPSC Mains PYQs – Theme – Poverty

1. [UPSC 2020] “The incidence and intensity of poverty are more important in determining poverty based on income alone”. In this context analyse the latest United Nations Multidimensional Poverty Index Report.
2. [UPSC 2018] ‘Poverty Alleviation Programmes in India remain mere show pieces until and unless they are backed by political will’. Discuss with reference to the performance of the major poverty alleviation programmes in India.
3. [UPSC 2015] Though there have been several different estimates of poverty in India, all indicate reduction in poverty over time. Do you agree. Critically examine with reference to urban and rural poverty indicators.

PMF IAS Pathfinder for Mains – Question 290

Q. Despite a notable reduction in extreme poverty, rising income inequality continues to impede inclusive development in India. Critically examine the factors responsible for this paradox and suggest effective policy measures to address income disparities and promote equitable growth. (250 Words) (15 Marks)

Approach

• Introduction: Write a contextual introduction by mentioning the current poverty, i.e., 4.9%.
• Body: Examine the factors responsible for this paradox, the challenges in addressing it, and suggest effective policy measures.
• Conclusion: Emphasis on “Sabka Saath, Sabka Vikas” to ensure equitable growth to achieve inclusive development.