New Delhi [India], January 3 : As the poverty rates in the country declined below 5 per cent in 2024, a research study by State Bank of India (SBI) also highlighted that the extreme poverty in the country has reduced to minimal.
It said "At an aggregate level, we believe poverty rates in India could now be in the range of 4-4.5 per cent with almost minimal existence of extreme poverty"
The report also highlighted significant improvements in rural and urban poverty levels over the years, supported by data from the government's Consumption Expenditure Survey.
According to the survey, rural poverty is estimated at 4.86 per cent in FY24, a sharp decline from 7.2 per cent in FY23 and 25.7 per cent in FY12. Similarly, urban poverty has dropped to 4.09 per cent in FY24, compared to 4.6 per cent in FY23 and 13.7 per cent in FY12.
Recently PM Narendra Modi had also said that over 23 crore people have come out of poverty in last ten years.
The poverty estimates may undergo minor revisions if the 2021 census is done and updated rural-urban population data is published. However, SBI Research believes that urban poverty levels could decline even further in the coming years.
It said "It is possible that these numbers could undergo minor revisions once the 2021 census is completed and new Rural Urban population share is published. We believe Urban poverty could decline even further".
The methodology for these estimates starts with the poverty line defined in 2011-12, adjusted for decadal inflation and an imputation factor derived from National Sample Survey Office (NSSO) data. The new poverty line for 2023-24 stands at Rs 1,632 for rural areas and Rs 1,944 for urban areas.
Using this adjusted poverty line and fractile distribution data, the proportion of poverty in rural areas is calculated at 4.86 per cent and in urban areas at 4.09 per cent for FY24.
The report attributed the decline in rural poverty to higher consumption growth among the bottom 5 per cent of the population, leading to a shift in the poverty line.
In FY23, the poverty line fell within the 5-10 per cent decile, but by FY24, it had shifted to the 0-5 per cent decile, indicating better economic conditions for the poorest segments of the population.
This sharp reduction in poverty levels shows country's progress in improving living standards and addressing inequality. With continued economic growth and targeted policies, the country appears poised to achieve even greater reductions in poverty, particularly in urban areas.
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