Progress in Poverty Reduction

India has significantly reduced poverty, with extreme poverty, defined as living on $2.15 per day in PPP terms, decreasing from 16% in 2011–12 to 2.3% in 2022–23, according to the World Bank.

• This decline lifted 171 million people above the internationally comparable poverty line.
• Rural extreme poverty fell from 18.4% to 2.8%, and urban extreme poverty from 10.7% to 1.1%.
• The rural-urban poverty gap decreased from 7.7 to 1.7 percentage points, with a 16% annual decline in the divide.

Poverty at the LMIC Threshold

When using the $3.65-per-day line for lower-middle-income countries (LMIC):

• Poverty fell from 61.8% to 28.1%, pulling 378 million people out of poverty.
• Rural poverty decreased from 69% to 32.5%, and urban poverty from 43.5% to 17.2%.
• The rural-urban gap reduced from 25 to 15 percentage points, indicating a 7% annual decline.

Multidimensional Poverty Index

The World Bank's MPI, excluding nutrition and health deprivation, showed:

• Non-monetary poverty declined from 53.8% in 2005–06 to 16.4% in 2019–21, and to 15.5% in 2022–23.

Challenges in Data Comparability

N C Saxena, former Planning Commission secretary, highlighted issues due to change in data collection methodology, stressing the need for independent data sources like Census and NFHS.

State Contributions to Poverty

The five most populous states, Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh, comprised:

• 54% of the extreme poor in 2022–23 and 51% of the multidimensionally poor in 2019–21.
• They accounted for 65% of the extreme poor in 2011–12 and two-thirds of the overall decline by 2022–23.

Potential Changes to Poverty Estimates

Estimates may change with revised poverty lines and 2021 PPPs:

• Under a $3 per day threshold, 2022–23 poverty rates would adjust to 5.3% and 23.9% for a $4.20 per day threshold.

Income Inequality and Employment

Wage Disparities

• In 2023–24, the top 10% earned 13 times more than the bottom 10%.
• The consumption-based Gini index improved from 28.8 in 2011–12 to 25.5 in 2022–23.
• Income inequality rose, with the Gini coefficient increasing from 52 in 2004 to 62 in 2023.

Employment

• Youth unemployment stands at 13.3%, rising to 29% among tertiary-educated graduates.
• 23% of non-farm paid jobs are formal, with most agricultural jobs remaining informal.
• Self-employment is rising, especially among rural workers and women.
• The female employment rate is 31%, with 234 million more men in paid employment.
• Since 2021–22, employment growth has surpassed the expansion of the working-age population.