13th November – India is making dramatic strides in addressing extreme poverty

In 2015, the United Nations adopted 17 Sustainable Development Goals (SDGs) to be achieved by 2030, of which the first two are “ending extreme poverty and hunger”.

What is extreme poverty?

Extreme poverty is defined as living on less than $1.90 a day, measured in 2011 purchasing power parity prices.

What is WPC?

  • The World Poverty Clock (WPC) provides real-time poverty estimates until 2030 for (almost) every country in the world.
  • It uses publicly available data on income distribution, production and consumption and bridges the common decadal gaps between large-scale surveys and censuses.
  • WPC is a systematic and consistent analytical framework to measure progress towards SDGs.

What does it say?

  • According to the WPC, 8% of the world, or nearly 600 million people, lives in extreme poverty. While 23,000 people escape poverty each day, about 7,000 are falling back into extreme poverty.
  • In 2015, the global “hot-spots” for extreme poverty were India, Nigeria, Democratic Republic of Congo, Ethiopia and Bangladesh, with nearly half of the world’s extreme poor.
  • For the last quarter century, the percentage of the world’s population living below the extreme poverty line has reduced from 36% to 10% in 2015. While much of that progress is attributable to declines in South-East Asia and East Asia, particularly China, the declines in this decade are due in substantial degree to South Asia, particularly India.

How did India achieve this feat?

  • An average GDP growth rate of over 7% for the last 26 years has made a dramatic impact on extreme poverty in India.
  • During the last full census in 2011, India’s extreme poverty rate was reported to be 21.9%, or 265 million people.
  • The latest figures say that the extreme poverty number is likely to have fallen to 4% or about 50 million in 2019, and is likely to drop below 40 million by 2021.

Concerns –

  • The richest 1% of India now hold 58% of wealth, and the richest 10% over 80%. This structural shift will have profound consequences for politics and economics, with an aspiring class that is very large and growing, and with abject poverty declining to a much smaller percentage of the population.
  • The garibi hatao (remove poverty) sentiment needs to be replaced by amiri badhao (increase wealth) for the lower middle class with a specific thrust on the re-distribution of wealth. India’s transformation to an unequal lower-middle-income country is upon us.

Way forward –

This shift in India’s poverty structure will necessitate two things—

  1. the state’s capacity will need to enable the effective delivery of all that’s required to meet evolving aspirations, and
  2. the state will have to embrace and enable the private sector as a participant in the next phase. The job is simply too large and complex for a single type of entity to accomplish. The Indian state has become better in one area—targeted redistribution. Those skills will have to be honed and refined to reduce leakages and improve direct help to marginal farmers, large sections of unemployed women, the north-eastern states and scheduled castes and tribes.
  • A dramatic refocus of the government towards fewer areas like security, infrastructure, primary education and public health is required.
  • At the same time, the government must reduce its distraction and participation in numerous other areas from banking to consumer goods. In all other areas, the government should play an enabling role like providing guarantees, gap funding and actions that have a meaningful impact on the ease of conducting business.

Conclusion –

“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of,” said Confucius.


QUESTIONTo combat abject poverty, India needs an attitudinal change from ‘garibi hatao’ to ‘amiri badhao’. Discuss

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