According to the paper, during an era of economic growth, when opportunities increase, the long-term determinants of poverty may decline while accidents of life associated with natural disasters, illness and death, and changes in occupation-specific opportunities may become more important
New Delhi: Poverty in India is estimated to have declined to 8.5 per cent in 2022-24 from 21.2 per cent in 2011-12, despite the challenges posed by the pandemic, according to a research paper by the economic think tank NCAER.
The study is based on the latest data from the India Human Development Survey (IHDS).
The NCAER economists led by Sonalde Desai have estimated a decline in headcount poverty ratios in rural areas over the last 10 years from 24.8 per cent in 2011-12 to 8.6 per cent now.
“According to the IHDS findings…poverty declined significantly between 2004-2005 and 2011-12 (from a headcount ratio of 38.6 to 21.2), and it continued to decline between 2011-12 and 2022-24 (from 21.2 to 8.5) despite the challenges posed by the pandemic,” the paper said.
In urban areas, the poverty level has decreased from 13.4 per cent to 8.4 per cent. The decline in poverty in rural areas has been sharper than in urban areas.
The paper points out that there has been a significant increase in food subsidy through the public distribution system and other benefits run through multiple schemes launched by the Centre as well as the states which have benefited the poor.
This sharper decline in poverty in rural areas was also reflected in a recent SBI Research report based on the NSSO Consumer Expenditure Survey.
According to the SBI report, poverty has staged a significant 4.4 per cent decline since 2018-19 and Urban Poverty 1.7 per cent decline post-pandemic, which shows that government initiatives for promoting the welfare of the bottom of the pyramid are having a significant beneficial impact on rural livelihood, the report states.
Along with the sharp decline in poverty in India, there has also been a marked reduction in the rural-urban income divide in the country, the report said.
According to a recent NITI Ayog discussion paper, India has registered a significant decline in multidimensional poverty in India from 29.17 per cent in 2013-14 to 11.28 per cent in 2022-23 which is a reduction of 17.89 percentage points.
Significant initiatives covering all dimensions of poverty have led to 24.82 crore individuals escaping multidimensional poverty in the last 9 years, the NITI Ayog paper said.
Uttar Pradesh registered the largest decline in the number of poor with 5.94 crore people escaping multidimensional poverty during the last nine years followed by Bihar at 3.77 crore, Madhya Pradesh at 2.30 crore and Rajasthan at 1.87 crore, it added.
The paper said economic growth and poverty decline create a dynamic climate that requires nimble social protection programmes.
Traditional strategies designed to address chronic poverty in a large segment of society may be less effective as accidents of birth become less important than accidents of life, it added.
The paper noted that ensuring social protection systems keep up with the pace of social transformation will be a key challenge for India as it strives towards equitable development.
According to the paper, during an era of economic growth, when opportunities increase, the long-term determinants of poverty may decline while accidents of life associated with natural disasters, illness and death, and changes in occupation-specific opportunities may become more important.
“Accidents of birth are more likely to affect long-term chronic poverty, accidents of life may have a transitory effect on moving in and out of poverty,” it said.
Earlier this year, NITI Aayog CEO BVR Subrahmanyam had said the latest consumer expenditure survey indicates that poverty has come down to 5 per cent in the country and people are becoming prosperous both in rural and urban areas.
“If we take the poverty line and inflate it with the Consumer Price Index (CPI) to today’s rate, we see that the average consumption of the lowest fractional, the 0-5 per cent, is about the same. This means poverty in the country is there in the 0-5 per cent group only,” the NITI Aayog CEO had said.
Agencies