WILL POVERTY STILL HAUNT INDIA IN 2047?

Economic growth is needed, but inclusion and sustainability are equally important to reduce poverty and improve the living conditions of vast sections of the population

- S. MAHENDRA DEV CHAIRMAN, ECONOMIC ADVISORY COUNCIL TO THE PRIME MINISTER

GROWTH IS NOT the sole objective of economic policy. It is necessary to ensure that the benefits of growth accrue to all sections. Eradication of poverty is thus an important objective. The objective of this article is to (a) examine briefly the recent trends in poverty and (b) look at the strategies needed to reduce or eliminate income and multidimensional poverty by 2047.

RECENT TRENDS

The estimates by R. Rangarajan and myself (2025) show that poverty ratios (rural + urban) declined from 29.5% in 2011-12 to 9.5% in 2022-23 and to 4.9% in 2023-24. Recently, World Bank (2025) released a brief on Poverty & Equity for over 100 developing countries. The brief says India has significantly reduced poverty over the past decade. Extreme poverty (living on less than $2.15 per day in purchasing power parity terms) declined from 16.2% in 2011-12 to 2.3% in 2022-23, lifting 171 million people above this line. Using the $3.65 per day poverty line for lower-middle-income countries, poverty fell from 61.8% to 28.1%.

Another notable achievement is that there has been a significant decline in poverty between 2022-23 to 2023-24. In one year, poverty declined from 9.5% in 2022-23 to 4.9% 2023-24. What are the reasons for a significant decline of poverty in one year? It looks like GDP growth could be a proximate reason for reduction in poverty in 2023-24.