Poverty rate in India comes down to 8.5% from 21%: Survey

Poverty rate in India comes down to 8.5% from 21%: Survey

Poverty rate in India comes down to 8.5% from 21%: Survey

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The findings were presented in a paper by a team of economists led by Sonalde Desai from the think tank NCAER and head of IHDS.

Date: July 6, 2024

A new study claims that poverty in India has seen a significant decline to 8.5 percent from 21 percent in 2011-12.

The study was conducted on the basis of findings of the latest India Human Development Survey (IHDS).

As per the papers presented at the India Policy Forum, which was utilized from the IHDS data from 2011-12 and 2022-24, of the total, 3.2 per cent were born into poverty, while 5.3 per cent fell into poverty due to ‘accident of life’.

The findings were presented in a paper by a team of economists led by Sonalde Desai from the think tank NCAER and the head of IHDS.

It also utilized the inflation-adjusted poverty line established by the Tendulkar Committee, which is employed by the government for policy formulation and implementation.

This is lower than the World Bank’s $2.15 international poverty line based on the 2017 purchasing power parity.

The report further indicates a more pronounced reduction in poverty in rural areas to 8.6 percent from 24.8 percent in 2011-12. Meanwhile, urban areas also witnessed a decrease from 13.4 per cent to 8.4 per cent.

It highlighted a substantial increase in food subsidies through the public distribution system and other benefits provided by various schemes implemented by the central and state governments.

Despite the overall reduction in chronic poverty levels, the study underscores the importance of addressing the vulnerability of those who may slip back into poverty due to unforeseen life events.

Challenges faced by India’s social safety net approach:

  • Identifying the poor and providing them with priority access to various social protection programs, including both in-kind and cash assistance.
  • Identifying and maintaining a limited core set of fully funded programs.
  • It cautions against the massive expansion of programs without a corresponding increase in resources, as this would render the approach ineffective.
  • 3 principles to address challenges for designing safety nets:
  • Universal programs for a limited set of basic safety nets
  • Risk insurance
  • Incorporating flexibility and institutional frameworks
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