How India Reduced Extreme Poverty from 16.2% to 2.3% in a Decade – Key Insights
Introduction
India has achieved a remarkable milestone in poverty reduction, lifting 171 million people out of extreme poverty between 2011-12 and 2022-23, according to a new World Bank report. The proportion of Indians living below the $2.15 per day extreme poverty line dropped from 16.2% to just 2.3% in this period—a testament to the country’s economic growth and policy interventions.
Finance Minister Nirmala Sitharaman highlighted this achievement, emphasizing that employment growth has outpaced the working-age population. But how did India accomplish this feat? Let’s dive deeper.
Key Findings from the World Bank Report
1. Rural vs. Urban Poverty Decline
- Rural areas saw extreme poverty drop from 18.4% (2011-12) to 2.8% (2022-23).
- Urban areas recorded a decline from 10.7% to 1.1% in the same period.
- Faster poverty reduction in rural regions suggests effective welfare schemes like MGNREGA, PM-KISAN, and improved agricultural incomes.
2. Data Sources & Methodology
- The report relies on:
- Consumption Expenditure Survey (2011-12)
- Household Consumption Expenditure Survey (2022-23)
- Improved survey methods (better sampling, questionnaire design) may affect historical comparisons.
3. Inequality Trends: Gini Index Decline
- India’s Gini Index (inequality measure) fell from 28.8 (2011-12) to 25.5 (2022-23).
- However, the World Bank cautioned that data limitations may understate true inequality levels.
What Drove India’s Poverty Reduction?
1. Government Welfare Schemes
- Direct Benefit Transfers (DBT) – Reduced leakages in subsidies.
- PM Jan Dhan Yojana – Financial inclusion for the unbanked.
- Ayushman Bharat – Healthcare access for low-income families.
2. Economic Growth & Job Creation
- Sitharaman noted employment growth surpassing working-age population expansion.
- MSME sector and gig economy boosted informal job opportunities.
3. Rural Development Programs
- MGNREGA – Guaranteed rural employment.
- PM-KISAN – Direct cash support to farmers.
Challenges & Limitations
While progress is impressive, the World Bank flagged key concerns:
- Data comparability issues due to survey methodology changes.
- Potential underestimation of consumption inequality.
- Regional disparities – Some states still lag in poverty reduction.
FAQ Section
1. How many people escaped extreme poverty in India?
India lifted 171 million (17 crore) people out of extreme poverty between 2011-12 and 2022-23.
2. What is the current extreme poverty rate in India?
As of 2022-23, only 2.3% of Indians live below the $2.15/day poverty line, down from 16.2% in 2011-12.
3. Which areas saw the biggest poverty decline?
Rural poverty fell faster (18.4% → 2.8%) than urban poverty (10.7% → 1.1%).
4. Did inequality decrease in India?
The Gini Index improved (28.8 → 25.5), but data limitations may understate true inequality.
5. What policies helped reduce poverty?
Key schemes: MGNREGA, PM-KISAN, Ayushman Bharat, and Direct Benefit Transfers (DBT).
India’s poverty reduction success is inspiring, but challenges remain. What do you think should be the next step to eliminate extreme poverty completely? Share your thoughts in the comments!
Disclaimer
This article is based on the World Bank’s Poverty and Equity Brief. Data interpretations may vary due to methodological changes. For official reports, visit World Bank.
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