Revising Poverty Indicators in India: Transitioning from Counting the Impoverished to Establishing Last-Mile Prosperity
India, a country known for its rapid economic growth, has witnessed significant improvements in its poverty levels according to the World Bank's purchasing-power-parity (PPP) prices and the National Multidimensional Poverty Index (MPI). However, ongoing challenges persist, as highlighted by recent data.
**Decline in Extreme Poverty**
The dramatic decline in extreme poverty, measured by the global benchmark of $3 per day (PPP-adjusted), is evident. In just over a decade, the proportion of people living below this poverty line has decreased from approximately 27% in 2011 to around 5% by 2022-23. This translates to nearly 27 crore people moving out of extreme poverty [1][5].
Despite this progress, about one in four Indians (over 35 crore people) still remain below the minimum standard of living, lacking access to essentials such as nutritious food, safe housing, healthcare, and education [1].
**Multidimensional Poverty Reduction**
The MPI, which captures deprivation across health, education, and living standards, shows a substantial reduction in poverty rates. According to NITI Aayog's data, the poverty rate has decreased from 29.17% in 2013-14 to 11.28% in 2022-23 [2][4].
The MPI now includes 12 indicators across three dimensions: health (including nutrition and maternal health), education, and standard of living (including access to cooking fuel, sanitation, drinking water, housing, electricity, bank accounts, and assets) [2].
While progress has been made, challenges remain. For instance, stunting in children has marginally decreased (38.4% in 2015-16 to 35.5% in 2019-21), and anemia prevalence has worsened among women and children, indicating persistent nutritional poverty challenges [2].
**Addressing Persistent Challenges**
The World Bank's strategy for poverty alleviation in India is grounded in both equity and efficiency. It aims to translate statistical victories into lived prosperity in India, and includes measures to address pockets of persistent deprivation [3].
The strategy involves a calibrated, multidimensional, and technologically enabled approach. Proposals include expanding PM-FBY crop insurance to cover heat-stress crops, rolling out parametric disaster-risk micro-insurance for coastal districts, and a competitive cooperative-federalism grant to match state expenditure for each percentage-point MPI reduction [3].
**Looking Ahead**
India has made substantial strides in reducing extreme poverty by global income-based PPP measures. However, the MPI reflects ongoing deficits in nutrition and health, indicating that these areas require sustained policy focus [1][2][4].
The World Bank's strategy, grounded in both equity and efficiency, aims to address these challenges and translate statistical victories into tangible improvements in the lives of millions of Indians. The analysis of the United Nations Multidimensional Poverty Index Report of 2020 in the context of poverty in India is ongoing, providing valuable insights for future policy decisions.
[1] World Bank. (2023). India's Poverty Headcount Revised Downward. [2] NITI Aayog. (2023). National Multidimensional Poverty Index Report. [3] World Bank. (2023). World Bank Strategy for Poverty Alleviation in India. [4] NITI Aayog. (2023). MPI Trends in India. [5] World Bank. (2023). Global Poverty Count Revised Upward Due to Methodology Change.
To sustain the remarkable progress in reducing extreme poverty in India, it is crucial to devise a strategic approach that addresses ongoing challenges in areas such as nutrition and health. Given the persisting issues highlighted by the World Bank's strategy, a focus on efficiently allocating resources in finance and business sectors could prove pivotal in eradicating multidimensional poverty and ensuring the well-being of all Indians. This holistic strategy, when executed effectively, will convert statistical victories into tangible improvements in the economy, livelihoods, and overall quality of life for millions of Indians.
