India has officially eliminated 'extreme poverty', says US report

India has successfully eradicated 'extreme poverty', according to a report by American think tank, Brookings. The report, penned by Surjit Bhalla and Karan Bhasin, attributes this achievement to a sharp drop in the headcount poverty ratio and a significant rise in household consumption.

The government's robust policy focus on redistribution has fostered strong inclusive growth over the past decade. The country's official consumption expenditure data for 2022-23, the first survey-based poverty estimates in over a decade, has just been released.

The data reveals a real per capita consumption growth rate of 2.9 per cent per annum since 2011-12, with rural growth (3.1 per cent) surpassing urban growth (2.6 per cent). The survey also indicates a remarkable decrease in both urban and rural inequality.

The urban Gini index, a measure of inequality, has fallen from 36.7 to 31.9, while the rural Gini index has decreased from 28.7 to 27.0. This decline in inequality, particularly in the context of high per capita growth, is unprecedented in the history of inequality analysis.

According to the Brookings Institution, a combination of high growth and a significant reduction in inequality has resulted in the eradication of poverty in India, as per the Purchasing Power Parity USD 1.9 poverty line. Statistics reveal that the Headcount Poverty Ratio (HCR) for this poverty line has seen a decrease from 12.2% in the year 2011-12, to a mere 2% in 2022-23.

This equates to an annual reduction of 0.93 percentage points. In terms of geographical distribution, rural poverty was reported at 2.5%, while urban poverty was lower at 1%. Furthermore, when considering the PPP USD 3.2 poverty line, HCR declined from 53.6% to 20.8%. It is important to note that these estimates do not account for the free food supplies (comprising wheat and rice) provided by the government to approximately two-thirds of the population, nor the utilization of public health and education services.

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