NEW DELHI: India is home to roughly one-third of all poor people in the world. It also has a higher proportion of its population living on less than $2 per day than even sub-Saharan Africa.As the article shows, India is making steady progress at advancing his cause with a significant decline in poverty over the last 20 years as the country has thrown off the dead hand of socialism and embraced free market capitalism.
That is the sobering news coming out of the World Bank's latest estimates on global poverty. The fine print of the estimates also shows that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005. This is likely to give fresh ammunition to those who maintain that economic reforms, which started in 1991, have failed to reduce poverty at a faster rate.
India, according to the new estimates, had 456 million people or about 42% of the population living below the new international poverty line of $1.25 per day. The number of Indian poor also constitute 33% of the global poor, which is pegged at 1.4 billion people.
India also had 828 million people, or 75.6% of the population living below $2 a day. Sub-Saharan Africa, considered the world's poorest region, is better — it has 72.2% of its population (551m) people below the $2 a day level.
The estimates are based on recently recalculated purchasing power parity (PPP) exchange rates, which makes comparisons across countries possible. The dollar exchange rates being referred to here, therefore, are not the ones used in normal exchange rates.
While the full report has not yet been released, a briefing note sent by the Bank had some of the data and showed that the poverty rate — those below $1.25 per day — for India had come down from 59.8% in 1981 to 51.3% by 1990 or 8.5 percentage points over nine years. Between 1990 and 2005, it declined to 41.6%, a drop of 9.7 percentage points over 15 years, clearly a much slower rate of decline.
An FAQ on the new estimates, also provided by the Bank, however states, "India has maintained even progress against poverty since the 1980s, with the poverty rate declining at a little under one percentage point per year."
What's also worth noting is that the poverty rate of $2/day is completely arbitrary even using PPP exchange rates. India's official poverty level is around $0.50/day and even allowing for a fair amount of political fudging it's still a big gap.