Yes! You heard it right. India has now officially eliminated extreme poverty, according to the US agency, American think tank Brookings. The same has been revealed after seeing a sharp decline in the headcount poverty ratio and a stark increase in household consumption. A recent report by the Brookings Institution, a US think tank, suggests that India has significantly reduced extreme poverty. A report authored by Surjit Bhalla, Former Executive Director, of IMF for India and Karan Bhasin, a researcher, states that this has been possible due to the governments strong policy thrust on redistribution, which has led to strong inclusive growth in India over the last decade.India has just released the official consumption expenditure data for 2022-23, providing the official survey-based poverty estimates over the past 10 years. The report shows that the real per capita consumption growth has been recorded at 2.9 percent since 2011-12. However, the rural growth recorded at 3.1 percent was significantly higher than the urban growth of 2.6 percent. Taking it to his official X handle, Surjit Bhalla mentioned, “Ideal choice for a poverty line would be something between 33 - 40% both lines have incredible poverty history behind them, around the world PPP$ 3.2 has too low a poverty rate more on this later. The fact remains as BBV argued that the existing Tendulkar-PPP $1.9 line is too low.”With @karanbhasin95 With elimination of extreme poverty, time for a serious look at poverty line upgrade PPP$3.2 line shows a poverty level (w/o food subsidies) at 20.8 %, more than half the rate (45 %) estimated by World Bank https://t.co/vpTnMKtDrE ! https://t.co/3ccRKYjJal— Surjit Bhalla (@surjitbhalla) March 2, 2024According to Brookings, high growth and a large decline in inequality have combined to eliminate poverty in India for the Purchasing Power Parity USD 1.9 poverty line.The Headcount Poverty Ratio (HCR) for the 2011 PPP USD 1.9 poverty line has declined from 12.2 percent in 2011-12 to 2 percent in 2022-23, equivalent to 0.93 percentage points (ppt) per year. Rural poverty stood at 2.5 percent while urban poverty was down to 1 percent.For the PPP USD 3.2 line, HCR declined from 53.6 percent to 20.8 percent.Heres a summary of the key points:Extreme poverty reduction: The report indicates that India has eliminated extreme poverty as defined by the international standard of $1.90 per day (PPP).Headcount ratio decline: The percentage of people living below this poverty line has fallen considerably, from 12.2% in 2011-12 to around 2% in 2022-23.Urban-rural divide: Poverty reduction has been observed in both rural and urban areas, with rural poverty at 2.5% and urban poverty at 1%.
