Close to 8.3 million people may have come out of extreme poverty in India in 2022
Photo credit UNDP India
By Pradeep Kumar Panda
Bhubaneswar, March 8: The World Poverty Clock provides another complementary perspective on poverty reduction in India. It renders an online platform for monitoring the progress in reducing extreme poverty defined by the poverty line of PPP$1.9 with respect to individual countries on an annual basis. It provides insights on the progress made on eradication of extreme poverty under the business as usual assumptions provided by specific scenarios called ‘Shared Socio-economic Pathways (SSP 2)’.
The methodology builds a relationship of poverty reduction with population and average per capita income [for detailed methodological framework, see Cuaresma (2018). As per this study, empirical evidence indicates that increase in the income level of the poor tends to be proportional to increase in average income per capita (Dollar and Kraay, 2002, Dollar et al., 2016).
According to this clock, India would be able to eliminate extreme poverty by 2024. Despite this, an estimated 36.8 million people would still remain in extreme poverty in 2024. It can be seen that prior to the onset of COVID-19 in 2019, India was on course to achieving its SDG goal of bringing extreme poverty below a level of three per cent of the population. However, due to the deleterious impact of COVID-19, close to 17 million people were pushed into extreme poverty in 2020, with the number of people living in extreme poverty increasing from 53.3 million to 70.2 million.
However, in 2021, about 11 million people have moved out of extreme poverty largely due to the government support through the pandemic stimulus packages. In 2022, close to 8.3 million people are expected to be lifted out of extreme poverty. India has been quite successful in reducing poverty in its various dimensions.
Poverty reduction has been made more effective and comprehensive by support from various government policies, including food subsidies and subsidization of services relating to health, education and water and sanitation. These effects are captured in multidimensional measurement of poverty as highlighted in the recent UNDP study (2022).
PM Garib Kalyan Anna Yojana (PM-GKAY) played a critical role in containing extreme poverty even in the presence of COVID-19. The PM-GKAY provided 5 kg of food grain per person per month free of cost for all the beneficiaries covered under the National Food Security Act (NFSA) [Antodaya Anna Yojana and Priority Households] including those covered under Direct Benefit Transfer (DBT).
Up to November 2022, PM-GKAY has been in operation for 27 months under different phases. As per available information, the government provided food grains to around 800 million beneficiaries covering all 36 states/UTs during April 2020 to November 202112. The more general policy support programs covering sectors such as health and education also have had a bearing on poverty reduction, especially when poverty is viewed as a multidimensional phenomenon.
As substantiated by the 2022 UNDP report, the reduction in the incidence of poverty is much sharper in a multidimensional perspective as compared to the income-based measurement of poverty. India was successful in bringing 415 million people above the poverty line during the period 2005-06 to 2019-21.
The poverty headcount ratio reduced from 55.1 per cent in 2005-06 to 27.7 per cent in 2015-16 and further to 16.4 per cent in 2019-21. In 2019-21, with reference to the total MPI value of 6.9, the largest contribution came from deprivation with reference to living standards, followed by health and education. For the poorest groups (children, lower castes and those living in rural areas), poverty reduced the fastest in absolute terms, although the data do not reflect post- pandemic changes.
The incidence of poverty fell from 36.6 per cent in 2015-2016 to 21.2 per cent in 2019-2021 in rural areas and from nine per cent to 5.5 per cent in urban areas. India’s headcount or incidence of multidimensional poverty is 6.1 per cent points lower than the incidence of income poverty, implying that individuals living below the income poverty line may have access to non-income resources.
India is relatively better placed in terms of the MPI as compared to some of its South Asian counterparts. As compared to an MPI value of 0.069 for India, Bangladesh and Pakistan had higher MPI values of 0.104 and 0.198 respectively for the latest period. The MPI value was 0.091 for the South Asia region.
The UNDP report observes that there have been visible investments in boosting access to sanitation, cooking fuel and electricity. A policy emphasis on universal coverage in the case of education, nutrition, water, sanitation, employment and housing has also contributed to a sharp reduction in multidimensional poverty in India. (Concluded)
The first two parts of the series tracking poverty were as follows
23 countries have higher proportion of poor than India
Link: https://theraisinahills.com/23-countries-have-higher-proportion-of-poor-in-rural-areas-than-india/
Free foodgrain scheme helped in tackling poverty; rich states stay ahead
Link: https://theraisinahills.com/free-foodgrain-scheme-helped-in-tackling-poverty-rich-states-stay-ahead/
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