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

FIFA Indictments Put Gold Cup Tournament Under Cloud

Experts say US indictments could lead to charges of other world soccer officials, and lead to major shakeup in sport's governance More

Video Seoul Sponsors Korean Unification Fair

At a recent even in Seoul, border communities promoted benefits of increased cooperation and North Korean defectors shared stories of life since the war More

Video VOA EXCLUSIVE: Iraq President Vows to Fight IS 'Until They Are Killed or We Die'

In wide-ranging interview with VOA Persian service reporter, Fuad Masum describes conflict as new type of fight that will take time to win More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Expelled from Pakistan, Afghan Refugees Return to Increased Hardshipi
X
Ayesha Tanzeem
May 28, 2015 6:48 PM
Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Expelled from Pakistan, Afghan Refugees Return to Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video Floodwaters Recede in Houston, but Rain Continues

Many parts of Texas are recovering from one of the worst natural disasters to hit the southwestern state. Heavy rains on Monday and early Tuesday caused rivers to swell in eastern and central Texas, washing away homes and killing at least 13 people. As VOA’s Greg Flakus reports from Houston, floodwaters are receding slowly in the country's fourth-largest city, and there likely is to be more rain in the coming days.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.

VOA Blogs

World Currencies

EUR
USD
0.9205
JPY
USD
123.69
GBP
USD
0.6508
CAD
USD
1.2456
INR
USD
64.051

Rates may not be current.