A recent study by the State Bank of India (SBI) highlights a significant milestone for India: the national poverty rate has dropped below 5%, with extreme poverty almost eradicated.
Key Findings:
- Poverty Rates (FY24):
- National: Between 4-4.5%.
- Rural Areas: 4.86%, down from 7.2% in FY23 and 25.7% in FY12.
- Urban Areas: 4.09%, down from 4.6% in FY23 and 13.7% in FY12.
- Poverty Line:
- Originally defined in 2011-12 and adjusted for inflation:
- Rural areas: ₹1,632/month.
- Urban areas: ₹1,944/month.
- Calculations based on the Consumption Expenditure Survey and fractile distribution data place the poverty line in the 0-5% decile, indicating improved economic conditions among the poorest.
- Originally defined in 2011-12 and adjusted for inflation:
- Drivers of Decline:
- Higher consumption growth among the bottom 5% of the population, particularly in rural areas.
- Targeted government programs, economic growth, and inflation control contributed to lifting millions out of poverty.
Historical Perspective:
India’s poverty reduction trajectory has accelerated in recent years, with consistent declines in both rural and urban poverty:
- Rural poverty dropped by more than 80% from FY12 to FY24.
- Urban poverty witnessed a similar decline, highlighting widespread improvements in living conditions.
(Source: DD News)
