NEW DELHI: India has seen about 496 million people being lifted out of poverty between 2011 and 2023 in one of the world’s fastest declines in this metric, the World Bank says, although the gains remain uneven.
The share of the population living below the lower middle-income poverty line of US$4.20 a day fell from 57.7% to 16.1% over this period, pushing a little under half a billion people above this threshold.
The reductions were even sharper in the extreme poverty category -– measured at US$3 a day – from 27.1% to 2.6%, it said in a report published this month.
This was “mainly driven by strong consumption growth, rising employment, especially among women, and expanded social transfers, including food subsidies,” World Bank’s South Asia poverty economists led by Ayago Wambile wrote in the report.
While employment increased by about 134 million between 2017 and 2023, the World Bank economists said that the wage disparities “remain pronounced,” as median earnings among the top 10% of workers were about 13 times those of the bottom 10% in 2023.
The report also flagged a recent rise in youth unemployment – from 14.6% in the April-June quarter last year to 15.9% in the same period this year.
The report’s findings align with the World Bank’s optimistic outlook on the world’s fastest-growing major economy, as well as a recent wave of student street protests that poses one of the biggest challenges yet to Indian Prime Minister Narendra Modi.
The World Bank earlier this month raised its growth forecast for India to 7.1%, saying strength in industry and services will help the economy weather a weaker monsoon and elevated energy prices.
Future declines in population living in poverty are expected to be more gradual, with the World Bank estimating those below the US$4.20-a-day threshold in India will fall from 14.2% in 2026 to 12.1% by 2028.
Even though the nationwide poverty number is shrinking, the report found that this population cohort is becoming more concentrated in a “contiguous belt” stretching from Uttar Pradesh in the north to the state of West Bengal in the east.
This region now accounts for about 57% of India’s remaining poor.
“Further reductions in national poverty will increasingly depend on enabling productive employment in these states,” the report said. — Bloomberg
