Poverty figures drop by 50 million, India on way to become middle-income nation: Study


Study based on World Bank data says the drop has happened in the past two years, but Congress govt’s NREGA scheme also played its part.

New Delhi: The number of Indians living in poverty has fallen significantly in the past two years — from 125 million in 2016 to 75 million in 2018 — shows a study by researchers at the Brookings Institution.

The study, based on World Bank data, projects that poverty numbers will further fall to 20 million by 2022.

India has thus made noteworthy progress in curbing extreme poverty and is fast moving to become a middle-income nation from a poor one, says James Crabtree, associate professor at the Lee Kuan Yew School of Public Policy, National University of Singapore, quoting the study.

“A mix of factors explain this remarkable shift. Some credit should go to India’s previous Congress government, which introduced various state programmes designed to help the very poorest,” writes Crabtree in the Nikkei Asian Review.

Crabtree highlights the important contribution of NREGA in providing employment to whosoever needed it — about 51 million households in 2016 alone, despite being a “wasteful and expensive scheme”.

However, it is also the trickle-down effect from economic growth that is enabling India to become a middle-income nation.

“Average income per head in purchasing power parity terms has risen from $1,140 in 1991 to $6,490 in 2017, according to the World Bank, putting India firmly in the ranks of middle-income states,” writes Crabtree.

Income increasing, but so is inequality

While India has been able to reduce absolute poverty, inequality has also increased in the country, with the share of the top 10 per cent earners being 55 per cent in the national income, compared to 32 per cent in 1980.

“The bottom 50 per cent have seen their share decline from 23 per cent to 15 per cent, with the poorest doing worst of all,” Crabtree notes in his article.

He cautions against this trend, emphasising that India would find it harder to reduce this gap as the country progresses, if the experience of other nations is anything to go by.

Further, poverty reduction doesn’t necessarily indicate improved parameters of human development.  India continues to be behind countries such as Nepal and Bangladesh when it comes to issues such as child mortality and maternal health, Crabtree notes.

Time to refocus on policies

India’s growth trajectory is now akin to middle-income Southeast Asian nations, unlike before when most comparisons were drawn with Sub-Saharan nations.

“There were fewer signs of the dire problems of hunger and abject hardship that defined people’s perceptions of India perhaps as recently as a decade ago,” writes Crabtree.

A larger number of Indians now occupy urban spaces and have access to education and basic jobs, says Crabtree.

Despite this, governance continues to be an issue — even for basics such as electricity, water and sanitation and politicians still are “comically corrupt”.

According to Crabtree, it is time India reprioritises to meet its changing development needs.

“As with many middle-income countries, India’s fight against poverty needs now to focus less on the alleviation of extreme hardship. That battle is close to being won in large parts of the country,” the article says.

“Instead, it needs to begin a new fight to build basic state capacity, providing decent government services and inexpensive forms of social security which can help its people build better lives,” concludes Crabtree.

Source: ThePrint

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