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MASSIVE ACHIEVEMNT : India Has Eliminated Extreme Poverty, Says US Think Tank Brookings


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In a major boost for the Indian government before the general elections, a commentary published by a leading American think-tank, The Brookings Institution, authored by economists Surjit Bhalla and Karan Bhasin, has noted that India has eliminated extreme poverty.

The report, based on the recently released consumption survey, also states that there has been an unprecedented decline in urban and rural poverty. Bhalla and Bhasin note that the data shows a strikingly lower number of poor people in India than those estimated by the World Bank.

This comes days after B V R Subrahmanyam, the CEO of the government’s own think-tank, the Niti Aayog, said that the consumer expenditure survey indicates poverty has come down to 5 percent and people are becoming prosperous both in rural and urban areas.

“High growth and large decline in inequality have combined to eliminate poverty in India for the per person, per day (PPP) poverty line of $1.9 (at 2011 prices). The Headcount Poverty Ratio (HCR) — i.e., the proportion of a population that lives below the poverty line — has declined from 12.2 per cent in 2011-12 to 2 per cent in 2022-23.

One of the pivotal factors contributing to this success, according to the study, is the amalgamation of high economic growth and a significant reduction in income inequality. The ‘headcount poverty ratio at the purchase power parity $1.9 level plummeted from 12.2% in 2011-12 to a mere 2% in 2022-23.

The authors asserted that the elevated consumption growth in rural areas is a direct outcome of the government’s unwavering commitment to redistribution. Publicly funded initiatives, such as the national mission for constructing toilets and the drive for universal access to electricity, modern cooking fuel, and piped water, have played a pivotal role, the study said.

Highlighting the impact of such policies, the report notes a staggering increase in rural access to piped water from 16.8% in August 2019 to an impressive 74.7% at present.

The authors emphasise that the elimination of extreme poverty in India not only heralds positive implications for global poverty rates but also signals the need for the nation to graduate to a higher poverty line.

The report comes at a time when two of the world’s leading economies – Japan and the UK – have slipped into recession. Britain recently revealed a 0.3 percent contraction in the fourth quarter of 2023 and has officially entered a recession. Japan, once poised to become the world’s largest economy, has also been struggling to recover after the Covid pandemic which crippled the country’s finances.

The spotlight has now turned on India, which has emerged as a beacon of opportunity for investors. Projections from the International Monetary Fund suggest that India is poised to overtake both Japan and Germany in terms of economic output, with estimates placing the shift in 2026 and 2027, respectively.


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