World Bank: India’s Extreme Poverty Drops to 2.3%

Syllabus :GS 3/Economy 

Context 

• According to the World Bank’s Poverty and Equity Briefs (PEBs), India’s extreme poverty dropped significantly from 16% in 2011–12 to 2.3% in 2022–23, marking major progress in poverty reduction.

About the Poverty and Equity Briefs (PEBs)

• They are biannual reports by the World Bank and  provide a quick overview of poverty, inequality, and shared prosperity trends in over 100 developing countries. 
• It is released during the Spring and Annual Meetings of the World Bank and IMF, they aim to keep poverty reduction central on the global agenda.

Measurement 

• Poverty rates and total number of poor as measured by the national poverty line and for the international extreme poverty line ($2.15 in 2017 PPP terms), as well as the lower-middle-income ($3.65) and upper-middle-income ($6.85) poverty lines.
• Comparable poverty and inequality trends for apples-to-apples comparisons over time and across countries.
• Multidimensional poverty measure, including measures of poverty that also reflect non-monetary deprivations that poor people face in areas like education and access to basic services.
• Inequality as measured by the Gini Index.

Recent Findings for India

• India has made significant progress in reducing poverty, with extreme poverty — measured at $2.15 per day in purchasing power parity (PPP) terms — falling from 16 per cent in 2011–12 to 2.3 per cent in 2022–23
  • The decline lifted 171 million people above the internationally comparable poverty line.
• Rural extreme poverty declined from 18.4% to 2.8%, and urban from 10.7% to 1.1%, narrowing the rural-urban gap significantly.
  • Using the $3.65/day lower-middle-income countries (LMIC) poverty line, poverty dropped from 61.8% to 28.1%, with 378 million people moving above the threshold.
• The World Bank’s multidimensional poverty index (MPI), which includes extreme poverty but excludes nutrition and health deprivation, showed that non-monetary poverty declined from 53.8 per cent in 2005–06 to 16.4 per cent in 2019–21, and further to 15.5 per cent in 2022–23.
• India’s five most populous states — Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh — accounted for 54 per cent of the country’s extreme poor in 2022–23 and 51 per cent of its multidimensionally poor in 2019–21.
  •  These states had contributed 65 per cent of the extreme poor in 2011–12 and drove two-thirds of the overall decline by 2022–23.
• Despite improvements, wage inequality is high, the top 10% earn 13 times more than the bottom 10%.
• The Gini index based on consumption improved (28.8 to 25.5), but income inequality rose (Gini from 52 to 62).
• Youth unemployment stands at 13.3%, rising to 29% among graduates, with most jobs remaining informal, particularly in agriculture.
• Female employment remains low at 31% with a 234 million gap compared to men, though overall employment has been growing since 2021–22.

Source :BS