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

India PM Modi's Party Distances Itself From Religious Conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote Hindu-dominant agenda by luring Muslims and Christians to convert More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.