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India achieved the official elimination of extreme poverty

Team Finance Saathi

02/Mar/2024

India has achieved the official eradication of extreme poverty, as indicated by a Brookings report. The report underscores a significant reduction in the headcount poverty ratio and an increase in household consumption, attributing these positive trends to the government's redistribution policies that have fostered inclusive growth.

In a significant milestone, a US-based think tank has declared that India has successfully eradicated 'extreme poverty,' attributing the achievement to the strong policy emphasis on redistribution by the Narendra Modi government. The report, authored by Surjit Bhalla and Karan Bhasin of the Brookings Institution, presents noteworthy insights:

India has officially eliminated 'extreme poverty,' evident in the substantial decline in the headcount poverty ratio and a considerable rise in household consumption.
The government's robust focus on redistribution policies is credited for fostering inclusive growth in India over the past decade.
Recently released official consumption expenditure data for 2022-23 reveals a real per capita consumption growth of 2.9% per year since 2011-12. Rural growth at 3.1% surpasses urban growth of 2.6%.
The report constitutes the 'first official survey-based poverty estimates for India in over ten years.'
Higher consumption growth in rural areas is attributed to the government's extensive array of publicly funded programs focused on redistribution.
The data indicates an unprecedented decrease in both urban and rural inequality.
The combination of high growth and a substantial decline in inequality has collaboratively led to the elimination of poverty in India for the Purchasing Power Parity USD 1.9 poverty line, according to Brookings.
The number of poor people in India, at both poverty thresholds, is notably lower than World Bank estimates.
The report acknowledges that the estimates do not account for the government-supplied free food or the utilization of public health and education services.
Policies such as the national mission for constructing toilets and ensuring universal access to electricity, modern cooking fuel, and piped water have played a crucial role in driving consumption.
Rural access to piped water has significantly increased from 16.8% in August 2019 to the current rate of 74.7%, positively impacting public health.
The Brookings report affirms that official data now confirms the elimination of extreme poverty in India, aligning with international comparisons. This development carries positive implications for global poverty headcount rates

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India achieved the official elimination of extreme poverty

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