Anticipated Decrease in India's Poverty Rate: Projected to Drop from 5.3% in 2023 to 4.6% in 2024, According to SBI Report
India's Poverty Rate Drops Dramatically, According to SBI Report
India is making remarkable strides in combating poverty, with the poverty rate expected to plummet to an astonishing 4.6% in 2024, according to a recent report by the State Bank of India (SBI) [1]. This figure is a significant improvement over the 5.3% poverty estimate the World Bank had for India in 2023 [3][4].
The SBI report points out that the country has registered impressive growth in poverty reduction, and its latest estimate reveals an even steeper decline compared to the World Bank's assessment. The substantial decrease in poverty can be attributed to advancements in data collection methods and updated definitions, as exemplified in the Household Consumption Expenditure Survey (HCES). Specifically, the introduction of the Modified Mixed Recall Period (MMRP) method, replacing the earlier Uniform Reference Period (URP), provides a more accurate portrayal of household consumption patterns [4].
This method employs shorter recall periods for frequently purchased items, leading to a more accurate and precise capture of consumption levels. As a consequence, consumption data have increased in national surveys, resulting in lower estimated poverty levels. For instance, the poverty rate in 2011-12 dropped from 22.9% to 16.22% under the earlier USD 2.15 per day poverty line [2]. In the 2022-23 survey, the poverty rate stood at just 5.25% under the newly increased USD 3.00 per day poverty line, and even lower at 2.35% under the old USD 2.15 threshold [2].
The World Bank recently adjusted the global poverty line from USD 2.15 per day (2017 PPP) to USD 3.00 (2021 PPP), causing an increase in the worldwide count of people in extreme poverty by 226 million [5]. However, India stands out as a statistical anomaly in a positive manner. Owing to revisions in consumption data and improved survey methods, India's revised figures have, in fact, managed to decrease the global poverty count by 125 million [5].
The SBI report underlines that recent estimates for India's poverty ratio align well with the World Bank's figures, taking into account differences in methodology and definitions [6]. The continued downward trend in India's poverty rate underscores the success of the country's economic reforms, targeted welfare initiatives, and refined data systems [6]. (ANI)
[1] SBI Report Indicates India's Poverty Rate to Fall to 4.6% in 2024.[2] The World Bank's 2024 Poverty Rate Estimate for India using a different metric is 5.44%.[3] World Bank's Estimate of India's Poverty Rate at 5.3% in 2023.[4] The role of new data collection methods and the MMRP method in reducing poverty estimates.[5] Revised Global Poverty Line and its impact on poverty statistics.[6] Comparability of SBI and World Bank's recent estimates for India's poverty ratio, taking into account differences in methodologies and definitions.
The recent SBI report suggests that the finance sector's evaluation of India's poverty rate aligns with the World Bank's, attributing the improvement to advancements in data collection methods such as the Modified Mixed Recall Period (MMRP). Moreover, changes in financial thresholds for measuring poverty have also influenced the news about the significant drop in India's poverty rate, providing fresh perspectives on global business trends.
