Poverty in India: Is it declining?

The discourse on poverty in India has always focused on the proportion of poor to the total population. Rarely do we see any statistic on the number of poor in India and how has this changed over a period of time. Even the UN’s development goals focus on the proportion of poor with indicators such as Poverty Headcount Ratio and Poverty gap Ratio and not on the number of poor. The UN country development reports do not mention the change in the number of poor people.  The World Bank on its website, though, gives us an idea regarding the change in the numberof poor in India in the past. It states that, the number of poor people living under $1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This means that while we had a lower percentage below the $1.25 a day  poverty line, the absolute number of poor sustaining below $1.25 a day had increased during 1980-2005 - not exactly a victory over poverty!

Going by India’s Planning Commission data, the proportion of poor in India has declined from 37.2% in 2004-05 to 29.8% in 2009-10. What does it mean in terms of number of poor? Interestingly, according to the planning commission which has used the poverty line suggested by the Tendulkar Committee, the number of poor in India in 2005 was around 413 million, which is only 43 million less than World Bank estimates based on people living below USD 1.25 a day. Lets look at the following table.

#	2005	2010
Population of India (billion)	1.11	1.15
Percentage of Poor	37.2%	29.8%
Number of Poor (million)	412.92	342.7

It does seem like there has been a substantial reduction in the number of poor over this period. This has not happened earlier in the history of independent India.  No wonder, a lot of commentators have found this significant, as the following articles would suggest:

1. Rapid GDP growth- best antidote for poverty, 28 Mar, 2012, Swaminathan S Anklesaria Aiyar
2. Poverty of Ideas, 18 Apr, 2012, Arvind Panagariya, Professor, Columbia University