News / Economy

India Records Sharp Drop in Poverty Rate

A boy sells roses while standing on a road divider during in Mumbai in this July 12, 2013, file photo.A boy sells roses while standing on a road divider during in Mumbai in this July 12, 2013, file photo.
x
A boy sells roses while standing on a road divider during in Mumbai in this July 12, 2013, file photo.
A boy sells roses while standing on a road divider during in Mumbai in this July 12, 2013, file photo.
Anjana Pasricha
In India, the government says the percentage of poor people has dropped sharply following strong economic growth during the last seven years. While critics acknowledge that the poverty rate has declined at a rapid pace, they say the Indian government's definition of poverty results in the undercounting of the number of poor.
 
Thirty-five-year-old Jay Prakash Mahato begins his day at 5 am cleaning cars in the business hub of Gurgaon. He then goes to work in a factory making crockery. In the evening he cooks for a family. The two part time jobs along with his regular job help him earn about $200 a month.
 
Mahato says his economic status has improved hugely since he migrated from a village in Bihar more than a decade ago.
 
Mahato says when he came to Gurgaon the wages were very low - about $40. He lived a hand-to-mouth existence. Now he is able to comfortably feed and clothe his four children.
 
Economists link Mahato’s rising income to a decade in which India’s economy grew by almost eight percent annually. Wages improved and people like Mahato got more opportunities, whether at regular jobs or part time ones.
 
The government this week announced that the number of poor people dropped from more than 400 million in 2005 to 270 million by 2012. That’s a drop from 37 percent to 22 percent of the population - or roughly two percent every year. 
 
Numbers debatable

Economists say the actual number of poor people is debatable because the government counts only those who spend less than 55 cents a day in urban areas and about 45 cents in rural areas as poor. The international poverty standard is less than $1.25 per day. By that mark, in 2010, the World Bank estimated nearly 33 percent of Indians were living in poverty.
 
Jay Prakash Mahato is seen cleaning a car as part of his three jobs, in New Delhi's business district of Gurgaon (Anjana Pasricha/VOA).Jay Prakash Mahato is seen cleaning a car as part of his three jobs, in New Delhi's business district of Gurgaon (Anjana Pasricha/VOA).
x
Jay Prakash Mahato is seen cleaning a car as part of his three jobs, in New Delhi's business district of Gurgaon (Anjana Pasricha/VOA).
Jay Prakash Mahato is seen cleaning a car as part of his three jobs, in New Delhi's business district of Gurgaon (Anjana Pasricha/VOA).
Economist Y.K. Alagh in Gujarat says that the exact proportion of poor in the country of 1.2 billion may be questioned. But he says the trend is clear - there is evidence to show that poverty has declined at a more rapid pace in the past decade. 
 
“One, it was a period of high growth. Second, it was a period of high agricultural growth. Employment has also improved.  Agricultural growth and employment are very important determinants of poverty. So in that sense it is plausible, that poverty has fallen in India. What is the level, well…,” . said Alagh.
 
The decline has been steeper in the country’s vast rural areas where two thirds of the population lives. Some of the country’s poorest states such as Orissa, Bihar and Rajasthan have also shown sharper drops in poverty levels than more prosperous regions.
 
However, rural areas are still home to the bulk of the poor - three out of every four live in the countryside. 
 
Job creation challenge

The head of the Indira Gandhi Institute for Development Research in Mumbai, Mahendra Dev, says that makes it critical to focus on creating more jobs outside of the farming sector.
 
“There is a need to shift them to non-farm employment, [the] basic thing is we need more productive employment. India missed [opportunities in the] labor intensive manufacturing sector. You cannot do it overnight, but medium term we have to go to [the] manufacturing sector,” said Dev.
 
Mahato, who migrated from Bihar, one of India’s poorest states, agrees.
 
He says his condition was bad in the village. There were no jobs and no money, and the only sustenance was a few fields which they cultivated. 
 
The political opposition has slammed the government for the latest poverty numbers saying they have been calculated by lowering the bar to measure poverty. 
 
Economist Alagh says India’s record on fighting poverty has been a mixed bag.
 
“Grain consumption has gone up. Nutrition levels have improved, but for women, the girl child and in some regions, chronic malnutrition is still very high. Obviously those are the glaring failures. A lot more could have been done, more focused programs, better evaluation, more effective local institutions,” said Alagh. 
 
The government has promised new norms to identify the poor and more programs to fight high levels of malnutrition in the country. Among them is an ambitious food program to provide highly subsidized food grains to nearly two thirds of the population. Opposition parties, however, are questioning the government for trying to push through this program if it claims only one in every five persons is poor.

You May Like

Video Iran Nuclear Deal Becomes US Campaign Issue

Voters in three crucial battleground states - Florida, Ohio and Pennsylvania - overwhelmingly oppose nuclear deal with Iran More

With IS in Coalition Cross-Hairs, al-Qaida's Syria Affiliate Reemerges

Jabhat al-Nusra has rebounded, increasingly casting itself as a critical player in battle for Syria’s future More

Lessons Learned From Katrina, 10 Years Later

FEMA chief Craig Fugate says key changes include better preparation, improved coordination among state, federal assistance agencies More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs

World Currencies

EUR
USD
0.8770
JPY
USD
119.68
GBP
USD
0.6414
CAD
USD
1.3265
INR
USD
66.194

Rates may not be current.