India’s sharp decline in extreme poverty is a major achievement. Now the priority must be job creation, social security and greater female participation
The World Bank report comes with a sense of relief for India. It estimates that the share of Indians living below $3 a day fell from 27.1 per cent in 2011-12 to 5.3 per cent in 2022-23. Its latest report, in October, puts the 2024 figure near 2 per cent, about 33 million people. On the older $2.15 line, the fall was from 16.2 to 2.3 per cent. Though in per cent terms the fall is significant yet in absolute numbers it is still quite large and given the fact that over 80 crore people still depend upon the government ration is still a cause of concern. The report, in fact, says it is a reduction in ‘extreme poverty’ which is synonymous with destitution. However, the milestone is significant as it shows the trend, a path that India is walking on.
This has happened over a period of more than a decade is significant as it shows that the path is right but pace is rather slow. Indeed, steady growth, rising rural incomes and a post-pandemic jobs recovery helped, but the Bank report also cites free and subsidised food transfers as a major factor. Yet another reason is plugging in leakages, which ate most of the Government doles. Digital direct transfers helped close leaks that once swallowed welfare. Besides, better reach of subsidies through targeted subsidies on cooking gas, toilets, electricity and housing has made a difference.
Five states (Uttar Pradesh, Maharashtra, Bihar, West Bengal and Madhya Pradesh) held 65 per cent of the extreme poor in 2011-12 and delivered two-thirds of the decline.
This report is indeed a moral booster but no cause for complacency or celebration as yet. Escaping destitution is not prosperity, and it does not make India a developed country. The $3 line works out to roughly Rs 60 a day, a survival benchmark drawn from the world’s poorest nations. At $4.20, the lower-middle-income line, about 216 million Indians remained poor in 2024.
At $8.30, the upper-middle-income benchmark, 1.14 billion fall short. Development means decent jobs, schools, healthcare and security, not merely the absence of hunger. The scars of malnutrition and poor schooling do not vanish when a household crosses a line.
Moreover, we must also acknowledge the report’s loopholes. The 2022-23 consumption survey changed its method, moving from a single visit to several and from paper to tablets, with no bridge survey to calibrate the break.
Consumption is not income, and it says nothing about wealth, dignity or vulnerability. Estimates have swung each time the data source changed.
And India has not revised its national poverty line since 2009. The way forward begins with honesty. Several challenges cannot wait. Jobs come first: only 23 per cent of non-farm paid work is formal, and youth unemployment of 13.3 per cent climbs to 29 per cent among graduates. Just 31 per cent of women are in paid work, an enormous untapped engine of growth.
The five states that still hold over half the extreme poor need targeted investment. We still have a long way to go!