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The World Bank's recent Poverty & Equity Brief reveals a remarkable achievement for India: lifting 171 million people out of extreme poverty between 2011-12 and 2022-23. This significant reduction, showcased during the World Bank's Spring Meetings, underscores the nation's progress in improving the living standards of its citizens. The report highlights that the proportion of Indians living below the international benchmark for extreme poverty, defined as $2.15 per day, plummeted from 16.2% to a mere 2.3% during this period. This dramatic decrease translates to a substantial improvement in the lives of millions who were previously struggling to meet their basic needs. The World Bank's findings provide a positive outlook on India's efforts to combat poverty and promote inclusive growth. These figures aren't just numbers; they represent real families and individuals gaining access to better opportunities, improved healthcare, and a more secure future. The sheer scale of this poverty reduction is noteworthy, positioning India as a key player in global efforts to eradicate extreme poverty. While these achievements are commendable, it is crucial to examine the underlying factors that contributed to this progress and consider the challenges that remain. A deeper dive into the World Bank report is necessary to understand the specific policies and initiatives that proved most effective, as well as the regional disparities and vulnerable populations that still require targeted support. Understanding these nuances will be crucial for designing future strategies to sustain and accelerate poverty reduction efforts in India.
Further analysis of the World Bank's report reveals that the decline in poverty was not uniform across all regions and demographic groups. While rural poverty experienced a substantial decrease from 18.4% to 2.8%, urban poverty also saw a significant drop from 10.7% to 1.1%. This narrowing of the rural-urban gap, from 7.7 to 1.7 percentage points, suggests that both urban and rural areas have benefited from poverty reduction initiatives. However, it is important to note that the absolute number of poor people may still be higher in rural areas, emphasizing the need for continued focus on rural development. Furthermore, the report highlights India's transition into the lower-middle-income category, indicating broader economic progress. Using a higher poverty line of $3.65 per day, more reflective of the lower-middle-income context, poverty fell from 61.8% to 28.1%, lifting an impressive 378 million people out of poverty. This indicates that a large segment of the population has moved beyond extreme poverty but remains vulnerable to economic shocks and requires continued support to achieve greater financial stability. This underscores the importance of focusing on policies that promote sustainable livelihoods, create employment opportunities, and enhance access to education and healthcare for all citizens. While these positive developments are encouraging, it's crucial to address the persistent inequalities and vulnerabilities that exist within the country.
The report also acknowledges the significant contributions of India's five most populous states – Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh – to the overall reduction in extreme poverty. These states accounted for two-thirds of the total poverty reduction, highlighting the crucial role they play in shaping the national poverty landscape. However, it is also important to note that these states still harbor a significant proportion of the remaining extremely and multidimensionally poor, emphasizing the need for targeted interventions in these regions. The World Bank's report also sheds light on the substantial progress made in reducing non-monetary poverty, as reflected in India's Multidimensional Poverty Index (MPI). The MPI, which encompasses indicators related to education, health, and living standards, fell from 53.8% in 2005-06 to 16.4% in 2019-21. This indicates significant improvements in areas such as school enrollment, access to healthcare, and access to basic amenities like sanitation and clean water. These improvements in non-monetary dimensions of poverty are crucial for enhancing human capital and promoting long-term economic development. These multifaceted achievements highlight the country's journey towards creating a more inclusive and equitable society. However, continuing to address the underlying causes of poverty remains critical.
Beyond monetary poverty, the World Bank's analysis delves into employment trends, revealing largely positive developments. Job growth has outpaced the increase in the working-age population since 2021-22, indicating a strengthening labor market. Urban unemployment dropped to 6.6% in Q1 FY2024-25, the lowest level since 2017-18, suggesting improved job prospects in urban areas. Notably, female employment has shown significant gains, reflecting progress in promoting gender equality in the workforce. However, challenges persist, particularly in youth unemployment, which remains elevated at 13.3%. Alarmingly, youth unemployment among graduates is even higher, reaching 29%, suggesting a mismatch between the skills acquired by graduates and the demands of the labor market. This underscores the urgent need for reforms in the education system to align curricula with industry requirements and equip young people with the skills needed to succeed in the modern economy. Furthermore, the World Bank points to a continuing gender gap in employment, with 234 million more men in paid work than women. This disparity highlights the need for policies that promote equal opportunities for women in the labor market, such as access to childcare, flexible work arrangements, and skills training programs. Addressing these challenges is crucial for ensuring inclusive and sustainable economic growth.
The dominance of self-employment and informal work in the rural economy further underscores the need for targeted interventions to improve the livelihoods of rural households. While self-employment can provide a source of income, it often lacks the security and benefits associated with formal employment. Strengthening rural infrastructure, promoting access to credit and markets, and providing training and support to rural entrepreneurs can help improve the productivity and profitability of self-employment activities. The Poverty & Equity Briefs, published biannually by the World Bank, serve as a valuable resource for policymakers and researchers seeking to understand poverty and inequality trends across developing countries. These briefs provide an overview of key trends and policy recommendations, informing global policy discussions and guiding efforts to reduce poverty and promote inclusive growth. In conclusion, the World Bank's report paints a largely positive picture of India's progress in reducing poverty, highlighting the significant achievements made in lifting millions of people out of extreme poverty and improving living standards across the country. However, challenges remain, particularly in addressing regional disparities, youth unemployment, and gender inequality in the labor market. By addressing these challenges and building on the successes of the past decade, India can continue to make progress towards its goal of eradicating poverty and creating a more inclusive and prosperous society for all its citizens. Continued focus on education, employment, and equitable distribution of resources is key to sustained success.
Source: World Bank says India lifted 171 million nationals out of extreme poverty in a decade