The World Bank's revision of its poverty estimates is befuddling

It has tweaked its methodology in ways that make it even harder to assess the reality of deprivation

- HIMANSHU

On June 5, the World Bank released an updated estimate of poverty for India, six weeks after the last one on April 26. However, unlike the April release, this one is accompanied by a detailed note on methodology for changes in the global poverty estimate (as well as for India).

For the record, the April estimate was based on the $2.15-per-day poverty line using the 2017 PPP index derived from the International Comparison Programme (ICP) 2017 cycle. For India, it suggested a decline in poverty from 16.2% in 2011-12 to 2.3% in 2022-23.

The latest estimates use the updated 2021 ICP cycle for the PPP index with the extreme poverty line revised to $3 a day. Based on this new poverty line and PPP exchange rates, poverty in India was found to have declined from 27.1% in 2011-12 to 5.3% in 2022-23.

However, in India's case, there are several issues. First, take the contentious issue of comparability of the 2022-23 Household Consumption Expenditure Survey (HCES) data with earlier rounds. The methodology note acknowledges this, but then goes ahead and uses it. While the absence of comparable consumption data is a major issue in the case of India, the World Bank's decision to use Indian data for global poverty estimation could raise questions on the credibility of its estimate for poverty across the world.