Poverty in India is on rise again

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Source: The Hindu


During the 2000’s there was decline in poverty as was indicated by the Government data. However, now multiple data point to a rise in poverty and unemployment. 


Poverty Source: The Hindu

  • Consumption expenditure survey (CES) is conducted and released every 5 years by NSO 
  • 2017-2018 data was not released, and the next set will be released in 2022. 
  • But based on the recent NSO’s PLFS (periodic labour force survey), the unemployment rate has reached a 45-year high and also the poverty levels.
Measurement of Poverty 
  • Prior to 2011, PLFS (periodic labour force survey) data was also used to estimate poverty. 
  • Household monthly per capita expenditure data was also collected based on Mixed Recall Period methodology. 
  • In 2011, the government decided to raise the poverty line as per the recommendations of the Tendulkar committee. 
Rise in poverty figures 
  • In absence of CES data, PLFS data can be used to estimate poverty. 
  • NSO’s CES data 2017 (leaked) showed that rural consumption had fallen by 8% and since over 65% of the population is rural, poverty is estimated to be increased. 
  • The absolute number of poor had risen from 217 Mn(2012) to 270 Mn(2019). (first time since history of CES) 
Reasons for increased poverty 
  • Demonetization and GST reforms struck a heavy blow to the unorganized sector & MSME. 
  • Household savings declined, Private investment fell from 31% to 28% 
  • Public expenditure was constrained by fiscal consolidation 
  • Exports fell, in absolute terms 
  • There was a rise in unemployment and real wages did not increase. 

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