Poverty Fell Significantly Last Year

Syllabus: GS 3/Economy 

In News

• The latest Household Consumption Expenditure Surveys by the NSO for 2022–23 and 2023–24 show a sharp decline in poverty and a modest reduction in inequality in India.

What is Poverty?

• Poverty refers to a condition where individuals are unable to meet their basic needs. Its definition and measurement vary across countries. 
• In India, poverty is assessed by the number of people living below the Poverty Line, which represents a threshold income level.
  • Households with consumption below this level are considered poor. 
• The poverty line represents the minimum income level necessary to meet basic needs, and varies across countries depending on their overall economic conditions.

Poverty measurement in India

• India’s poverty estimation has evolved over decades, starting with V N Dandekar and N Rath in 1971 who defined the poverty line based on calorie consumption (2,250 calories per person per day, based on National Sample Survey data of 1960-61), setting it at Rs 15 for rural and Rs 22.5 for urban areas. 
• In 1979, the Y K Alagh Task Force set poverty lines based on calorie needs of 2,400 calories (rural) and 2,100 calories (urban), which remained the official method until the 1990s.
  • but this approach was criticized for not accurately reflecting poverty.
• In 1993, the Lakdawala Committee introduced state-specific poverty lines considering regional price differences but faced criticism for moving away from calorie standards.
• In 2009, the Tendulkar Committee recommended major changes, including shifting focus from calorie-based poverty lines to nutritional outcomes, using a uniform basket for rural and urban areas, adjusting price calculations, and including health and education expenses in poverty measurement.
  • According to this method, the 2009–10 poverty line was set at ₹673 per month for rural areas and ₹860 for urban areas. 
  • Individuals spending less than these amounts were classified as living below the poverty line.
  • The last official poverty data from 2011-12, based on Tendulkar’s line, showed 21.9% of Indians below poverty.
• In response, the Rangarajan Committee (2012-14) reinstated separate rural and urban poverty lines, raising poverty thresholds significantly.
  • However, the government did not officially adopt this report. 

Trends of poverty in India

• The overall poverty rate dropped from 29.5% in 2011–12 to 9.5% in 2022–23 and further to 4.9% in 2023–24. 
• This trend aligns with an increase in GDP growth and a decline in general inflation, although food inflation rose slightly. 
• Welfare programmes remained largely unchanged, suggesting that economic growth may be a key factor in recent poverty reduction. 
• The World Bank recently released a Poverty & Equity Brief for over 100 developing countries. 
  • It reported a substantial decline in extreme poverty, from 16.2% in 2011–12 to 2.3% in 2022–23. 
  • Analysis shows most of the poor are clustered just below the poverty line, while many non-poor are slightly above it, indicating that poverty is not deeply entrenched.
  • Even when poverty lines are raised to 125%, the decline remains significant. 
  • Inequality, measured by the Gini coefficient, fell from 0.310 in 2011–12 to 0.253 in 2023–24, with an unusually sharp decline between 2022–23 and 2023–24.

Governments Steps 

• The Government of India has made significant strides in enhancing the quality of life and reducing poverty in its many forms.
• The programme implemented by the government to generate Employment and alleviate poverty are – The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Swarnjayanti Gram Swarozgar Yojana (SGSY), and Swarna Jayanti Sahari Rozgar Yojna (SJSRY).
• Key initiatives such as Poshan Abhiyan and Anemia Mukt Bharat have notably improved access to healthcare, leading to a marked reduction in deprivation. 
• The government also operates one of the world’s largest food security programs—the Targeted Public Distribution System under the National Food Security Act.
• Decisions, such as extending free food grain distribution under Pradhan Mantri Garib Kalyan Anna Yojana for another five years, exemplify the Government’s commitment. 
• Various programs addressing maternal health, clean cooking fuel distribution through Ujjwala Yojana, improved electricity coverage via Saubhagya, and transformative campaigns like Swachh Bharat Mission and Jal Jeevan Mission have collectively elevated living conditions and overall well-being of people.
• Additionally, flagship programs like Pradhan Mantri Jan Dhan Yojana and PM Awas Yojana have played pivotal roles in financial inclusion and providing safe housing for the underprivileged.

Source :IE