New Delhi: A recently published World Bank report presents a comprehensive analysis of poverty reduction in India between the fiscal years 2011-2012 and 2022-2023, revealing a remarkable decrease in extreme poverty. The report quantifies this reduction as 170 million people lifted out of extreme poverty, defined as living on less than $2.15 a day. This significant achievement translated to a drop in the proportion of the extremely poor from 16.2 per cent to a mere 2.3 per cent across the nation. A more pronounced decrease was observed in rural areas, where the percentage fell from 18.4 per cent to 2.8 per cent, compared to a decrease from 10.7 per cent to 1.1 per cent in urban areas.
The five states of Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh, which collectively housed 65 per cent of the extremely poor in 2011-2012, played a crucial role in this poverty reduction, driving two-thirds of the overall decline. While these states still account for 54 per cent of those in extreme poverty, the data shows a clear improvement. This assessment is based on data from the 2011-2012 Consumption Expenditure Survey and the 2022-2023 Household Consumption Expenditure Survey, which also reveal a decline in consumption-based inequality, evidenced by a decrease in the Gini Index from 28.8 to 25.5.
However, the World Bank acknowledges inherent limitations within the survey methodology and data, potentially leading to an underestimation of inequality and complicating historical comparisons. This is contrasted by data from the World Inequality Database, which reveals a different trend: rising income inequality, with the Gini Index increasing to 62 in 2023 from 52 in 2004, and the top 10 per cent of earners earning 13 times more than the bottom 10 per cent in 2023-2024. This discrepancy highlights the complexities in measuring and interpreting inequality across different datasets and methodologies.
Despite these contrasting perspectives on inequality, the World Bank report also highlights positive trends in employment. Since 2021-2022, employment growth has outpaced the growth of the working-age population. The report further notes significant shifts in workforce demographics, with a growing number of men migrating from rural to urban areas for employment opportunities, while female employment in rural agriculture is also on the rise. These evolving dynamics reflect broader economic transformations within India.
