Extreme Poverty in India declined 12% in the last decade, says World Bank

• The World Bank’s latest Policy Research Working Paper mentioned that the extreme poverty count fell nearly 12% points to 10.2% in 2019.
• The decline in the rural areas was much higher than in urban areas, the research paper further added.
• Last week, a study by Indian Monetary Fund noted that India has almost eradicated extreme poverty.

Extreme poverty in India is estimated to have declined 12.3 percentage points between 2011 to 2019, according to a recent World Bank Policy Research Working Paper.

The paper, titled ‘Poverty has declined over the last decade But Not As Much As Previously Thought, ' mentioned that the extreme poverty count fell from 22.5% in 2011 to 10.2% in 2019.

Notably, the World Bank defines ‘living in extreme poverty’ in India as living on $1.9 or less in purchasing power parity (PPP) terms.

The decline in the rural areas was much higher than in urban areas, the report jointly authored by economists Sutirtha Sinha Roy and Roy van der Weide noted. It further noted that the reduction in rural poverty is more pronounced with a 14.7% point drop, whereas rural poverty witnessed a 7.9% point dip.

The research paper mentioned that in the first half of the decade, extreme poverty declined t0 19.1%. The remaining 9.1% drop was achieved in the later years, between 2015 and 2019. Extreme poverty dropped by 3.2% points between 2017 and 2018 alone, which was the fastest rate in over two decades.

The research paper also highlighted that poverty marginally increased for a brief period at least twice in the last decade. This was around the demonetisation of the Indian currency in 2016 and the economic slowdown after that.

Only last week, the International Monetary Fund (IMF) mentioned that India has almost eradicated extreme poverty and has brought down its consumption inequality to its lowest level in the last four decades. These consumption inequalities were dealt with state-provided food handouts.

The IMF report highlighted that less than 1% of the Indian population is living under extreme poverty. Food ration schemes were “instrumental” in ensuring that extreme poverty did not rise during the pandemic and remind steady, the study found.

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