India needs official poverty data for effective policy formulation

World Bank estimates are confusing and we must adopt our own measure of India's poverty ratio

- HIMANSHU

Last week, the World Bank released its latest estimates of poverty for India. According to its Poverty and Equity Briefs, poverty in India declined from 16.2% in fiscal year 2011-12 to 2.3% in 2022-23, with 171 million people lifted out of it in 11 years—or 15.5 million persons per year. These estimates are based on its $2.15-per-day poverty line used to measure extreme poverty.

These numbers differ from the World Bank's estimates of poverty using the same $2.15 poverty line on its Poverty and Inequality Platform (PIP). Indian poverty, according to this, was at 22.9% in 2011-12 and fell to 13% in 2021-22, with the number of poor falling by 107 million, or 10.7 million persons per year. Not just the level of poverty, the extent of its decline also varies vastly.

Part of the reason for the Bank's sharp downward revision in poverty was its use of the recently-released 2022-23 Household Consumer Expenditure Survey (HCES). However, its PIP estimates for 2021-22 were made through a survey-to-survey imputation using the 'consumer pyramids' data of the Centre for Monitoring Indian Economy.