Understanding Poverty Measurement and Trends in India

What Is Poverty and How Is It Measured?

Poverty is a state where individuals or groups do not have sufficient financial resources to fulfill basic living requirements such as food, shelter, healthcare, and education. Various methods are used to measure poverty:

• International Poverty Line: Set at $2.15 per day (PPP), this measures extreme poverty globally.
• Lower-Middle-Income Poverty Line: At $3.65 per day, this captures poverty in developing nations like India.
• Multidimensional Poverty Index (MPI): This includes indicators beyond income, such as education, sanitation, and electricity access.

How Prevalent Is Poverty in India Today?

According to the World Bank's most recent data for 2022–23:

• Extreme poverty has decreased to 2.3%.
• Lower-middle-income poverty stands at 28.1%.
• Multidimensional poverty has dropped to 15.5%, down from 53.8% in 2005–06.
• The rural-urban poverty gap has significantly narrowed:
  • Rural extreme poverty decreased from 18.4% (2011–12) to 2.8% (2022–23).
  • Urban extreme poverty fell from 10.7% to 1.1%.

How Did India Achieve This Reduction in Poverty?

India's notable poverty reduction can be attributed to various factors:

• Economic Growth: Sustained GDP growth has resulted in better job creation and enhanced income opportunities.
• Welfare Schemes:
  • PM Garib Kalyan Anna Yojana: Provided free food grain during the pandemic.
  • MGNREGA: Ensured wage employment in rural areas.
  • Ayushman Bharat: Offered health insurance to the underprivileged.
  • Ujjwala Yojana: Facilitated access to clean cooking fuel.
• Improved Infrastructure: Enhanced roads, electrification, sanitation, and banking access have supported rural upliftment.
• Social Sector Investments: Focused on education, digital access (Jan Dhan, Aadhaar, Mobile), and women's empowerment.

How Does the World Bank Measure Poverty in India?

The World Bank employs several methods for assessing poverty, including:

• Consumption Expenditure Surveys: The 2011–12 CES and the 2022–23 Household Consumption Expenditure Survey are crucial data sources.
• Revised PPP Lines: Based on 2021 Purchasing Power Parity, the updated poverty thresholds are:
  • $3/day (extreme)
  • $4.20/day (lower-middle-income)
• Multidimensional Indicators:
  • Access to sanitation (29.9% lack access)
  • Primary education (13.8% of adults are uneducated)
  • Data on drinking water, electricity, and school enrolment.

Challenges in Measuring Poverty Accurately

Several challenges hinder accurate poverty measurement:

• Data Gaps: Variations in survey designs complicate long-term comparisons.
• Underreporting of Inequality: The Gini coefficient may be understated due to sampling issues and data limitations.
• Lack of Real-time Data: There is an over-dependency on older surveys, necessitating integration with NFHS and Census findings.

Frequently Asked Questions (FAQs)

Q1. What defines poverty in India?
Answer: Poverty in India is defined as the inability to meet basic needs such as food, shelter, healthcare, and education, measured through specific income thresholds and indices.

Q2. What is the current rate of extreme poverty in India?
Answer: As of 2022–23, the rate of extreme poverty in India has fallen to 2.3%, indicating significant progress in poverty reduction efforts.

Q3. What are some key welfare schemes in India for poverty alleviation?
Answer: Key welfare schemes include PM Garib Kalyan Anna Yojana, MGNREGA, Ayushman Bharat, and Ujjwala Yojana, aimed at improving financial conditions for the poor.

Q4. How does the World Bank measure poverty?
Answer: The World Bank measures poverty using consumption expenditure surveys, revised PPP lines, and multidimensional indicators related to education and basic services access.

Q5. What challenges exist in measuring poverty?
Answer: Major challenges include data gaps from inconsistent survey designs, underreporting of inequality, and reliance on outdated data sources, which complicate accurate assessments.

UPSC Practice MCQs

Question 1: What is the International Poverty Line as per the latest standards?
A) $1.90/day
B) $2.15/day
C) $3.65/day
D) $4.20/day
Correct Answer: B