India’s poverty reduction has significantly slowed down

Source: The post India’s poverty reduction has significantly slowed down has been created, based on the article “Analysing poverty levels in India by comparing various surveys” published in “The Hindu” on 22 May 2025. India’s poverty reduction has significantly slowed down.

UPSC Syllabus Topic: GS Paper2- governance-Issues relating to poverty and hunger.

Context: India has not published official poverty data since 2011–12. A recent paper titled ‘Poverty Decline in India after 2011–12: Bigger Picture Evidence’ addresses this gap using imputation-based methods. It finds that the pace of poverty reduction has slowed considerably after 2011–12.

For detailed information on Understanding Poverty in India read this article here

Challenges in Poverty Estimation

1. Absence of Updated Official Estimates: The last official poverty estimate was published in 2011–12. Since then, multiple unofficial and often conflicting estimates have emerged due to lack of fresh data.
2. Survey Disruptions and Gaps: The Household Consumption Expenditure Survey (HCES) for 2017–18 was scrapped over “methodological issues.” The latest HCES (2022–23) cannot be easily compared with the 2011–12 survey, as no intermediate surveys exist.
3. Limitations of UMPCE-Based Data: From 2014 onwards, the National Sample Survey Office (NSSO) introduced the Usual Monthly Per Capita Consumption Expenditure (UMPCE), based on a single vague question. This measure lacks consistency with past metrics and gives a poverty estimate of 26–30% in 2019–20.

Three Broad Estimation Methods Identified

1. Alternative NSSO Surveys: Some studies rely on alternate NSSO surveys such as the Periodic Labour Force Survey (PLFS), but these suffer from limited comparability and depend on weak consumption indicators.
2. National Accounts-Based Scaling: Surjit Bhalla and colleagues used Private Final Consumption Expenditure (PFCE) from the National Accounts Statistics (NAS) to scale HCES 2011–12 data. This assumes uniform consumption growth, which may not reflect real conditions.
3. Survey-to-Survey Imputation: This method fills data gaps by linking compatible surveys. Though outcomes may vary based on survey choice, it helps track long-term trends in poverty.

New Approach and Findings on Poverty Trends

1. Use of Consistent Survey Pairs and Poverty Lines: The authors use the Tendulkar Committee poverty line. They impute consumption data from the Employment-Unemployment Survey (EUS) of 2011–12 and Periodic Labour Force Survey (PLFS) from 2017–18 onwards. Both surveys share similar sampling and design features.
2. Enhanced Accuracy via State-Level Modelling: Unlike World Bank studies, the authors include State-fixed effects or State-level estimates, improving the precision and reliability of their poverty estimates.
3. Main Findings: Their results show poverty declined from 37% in 2004–05 to 22% in 2011–12, and only to around 18% by 2022–23. The number of poor fell marginally from 250 million to 225 million, showing that progress has slowed significantly since 2011.

Diverging Trends Across Indian States

1. Significant Gains in Uttar Pradesh: Uttar Pradesh showed marked poverty reduction during this period, according to the authors’ estimates.
2. Slow Progress in Some Poorer States: Jharkhand and Bihar showed little improvement. In states like Maharashtra and Andhra Pradesh, poverty reduction has largely stagnated.
3. Call for Comparable Official Data: The authors stress the need for consistent, publicly available government data to resolve current uncertainties.

Supporting Evidence from Broader Indicators

1. Slower GDP Growth: Gross Domestic Product (GDP) growth slowed from an annual average of 6.9% (2004–2011) to 5.7% (2011–2023), reflecting a broader economic deceleration.
2. Rural Wage Growth Falls: Real rural wages grew at 4.13% annually until 2011–12, but slowed to 2.3% annually after that, indicating weakening income gains.
3. Return to Agriculture: Between 2004–05 and 2017–18, 66 million workers left agriculture. Since 2017–18, 68 million re-entered the sector, which has lowered productivity and wages, aggravating rural poverty.

Conclusion

This study shows a clear slowdown in poverty reduction since 2011–12. While it may not settle the debate, the authors call for urgent release of official data and renewed policy efforts to combat poverty.

Question for practice:

Examine the factors that have contributed to the slowdown in poverty reduction in India since 2011–12.