Why in News?
The World Bank has recently published the paper titled ‘Poverty has declined over the Last Decade But Not As Much As Previously Thought’.
- The paper came close on the heels of a working paper released by the International Monetary Fund (IMF) saying India has almost eradicated extreme poverty and cut down consumption disparity to its lowest levels in 40 years through state-funded food handouts (Public Distribution System).
- Decline in Extreme Poverty- Extreme poverty in India was 12.3% percentage points lower in 2019 compared with 2011, as poverty headcount rate decreased from 22.5% in 2011 to 10.2% in 2019, with a comparatively sharper decrease in rural areas.
- Since 2011, there is Slight moderation in consumption inequality, but by a margin smaller than what is reported in the unpublished National Sample Survey -2017.
- The extent of poverty reduction during 2015-2019 is estimated to be notably lower than previous projections based on growth in private final consumption expenditure reported in national account statistics.
- The World Bank describes “extreme poverty” as living on less than USD 1.90 per person per day.
- Rural vs Urban Poverty- Poverty reduction was higher in rural areas compared with urban area in India as rural poverty declined from 26.3% in 2011 to 11.6% in 2019, although in urban areas the decline was from 14.2% to 6.3% in the corresponding period.
- Rural and urban poverty declined by 14.7 and 7.9% points during 2011-2019.
- In 2016, urban poverty rose by 2% in India, coinciding with the demonetisation, on the other hand rural poverty rose by 10% in 2019.
- Small Farmers- The study shows that smallholder farmers have experienced higher income growth. Real incomes of farmers with the smallest landholdings have grown by 10% in annualized terms between the two survey rounds (2013 and 2019) compared to a 2% growth for farmers with the largest landholding.
- The growth in incomes of smallest landholders in rural areas provides proof of moderation in income disparity in rural areas.
- Smallest landholders include a larger share of the poor population. This income incorporates wages, net receipt from crop production, net receipt from farming of animal farming and net receipt from non-farm business. Income from leasing out land has been exempted.
Significance of the Report-
- The World Bank’s paper is important as India has no official estimation of recent periods. The last expenditure survey was published in 2011 by the National Sample Survey Organisation (NSSO), when the country had also released official estimates of poverty and inequality.
- It throw light on how poverty and inequality have evolved since 2011 using a new household panel survey, the Consumer Pyramids Household Survey conducted by Centre for Monitoring the Indian Economy (CMIE).
Major Poverty Alleviation Programs of India-
- Integrated Rural Development Programme (IRDP).
- Pradhan Mantri Awaas Yojana (PMAY).
- National Old Age Pension Scheme.
- Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA).
- National Urban Livelihood Mission (NULM).
- Annapurna Scheme.
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
- Pradhan Mantri Jan Dhan Yojana (PMJDY).
- Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM).