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11 years of decline in extreme poverty: US report

According to a statement written by economists Surjit Bhalla and Karan Bhasin for a prestigious American think tank, The Brookings Institution, India has eradicated severe poverty. The authors used recently disclosed consumer spending statistics for the fiscal year 2022–2023.

The two renowned economists in the paper reference the statistics to show that real per capita consumption has increased by 2.9% year since 2011–12, with rural growth—which is 3.1% greater than urban growth—being noticeably higher than urban growth, which is 2.6%. Inequality between urban and rural areas has also decreased to an unparalleled degree. The rural Gini fell from 28.7 to 27.0, while the urban Gini fell from 36.7 to 31.9.

A higher number that is closer to one (or 100%) indicates more inequality. The Gini coefficient, also known as the Gini index, is used to quantify the disparity of income distribution. The article claims, “This decline is unprecedented in the annals of inequality analysis, especially in the context of high per capita growth.” The economists contended that this was mostly because the official Tendulkar poverty level in India and the PPP of USD 1.9 nearly match.

The writers of the article pointed out that “these estimates do not take into account the utilization of public health and education, nor the free food (wheat and rice) supplied by the government to approximately two-thirds of the population.” The article said that the drop in HCR is noteworthy since, historically, it took 30 years for India to have a comparable decline in poverty levels, which has now been seen over 11 years.

It also said that because severe poverty has all but disappeared in India, the country needs to move toward a higher poverty standard. This would provide a chance to rethink current social protection policies in order to better assist the really impoverished. India has eradicated severe poverty as it is widely understood in international comparisons, according to official statistics, the economists said.

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