Decline in Poverty Rates in India – Rural poverty declines sharply in FY24 at 4.86%
Recent research from the State Bank of India (SBI) reveals a significant decline in poverty rates across both rural and urban areas. The report indicates that rural poverty has decreased to 4.86% for the fiscal year ending March 2024, down from 25.7% in 2011-12. Similarly, urban poverty has also seen a notable reduction, now estimated at 4.09%, compared to 13.7% in the same period. This positive trend is largely attributed to various government support programs aimed at improving the living conditions of the poor.
Government Initiatives Driving Change
The SBI research highlights the crucial role of government initiatives in reducing poverty levels. Programs that provide direct benefits, such as cash transfers and infrastructure development, have significantly contributed to this decline. The report notes that the consumption growth among the lowest income decile has been particularly impactful. This growth is essential, as it indicates that even the poorest segments of society are experiencing improved living standards.
Moreover, the research emphasizes the importance of monitoring food prices. Fluctuations in food prices can greatly affect overall expenditure, particularly for low-income households. The latest Household Consumption Expenditure Survey, released by the Ministry of Statistics and Programme Implementation, supports these findings. It shows a reduction in consumption inequality in both rural and urban areas during the period from August 2023 to July 2024. This suggests that the benefits of government programs are reaching a broader segment of the population.
Urban vs. Rural Poverty: A Comparative Analysis
The decline in urban and rural poverty presents an interesting comparison. While rural poverty has dropped to 4.86%, urban poverty stands slightly lower at 4.09%. This indicates that both areas are benefiting from economic growth, but the pace of improvement varies. The SBI report suggests that urban poverty may decline even further in the coming years.
The research also points out that the gap between rural and urban monthly per capita consumption expenditure has narrowed. In 2009-10, rural monthly per capita consumption was 88.2% lower than urban levels. This gap has now reduced to 69.7%. Such progress is attributed to government initiatives that enhance rural infrastructure, increase farmers’ incomes, and improve overall rural livelihoods.
Future Projections and Challenges Ahead
Looking ahead, the SBI report projects that poverty rates in India could stabilize between 4% and 4.5%. This would indicate a minimal existence of extreme poverty. However, these estimates may be subject to revision once the 2021 census is completed and new population data is available.
The report also highlights the impact of food inflation on consumption demand, particularly in lower-income states. Rural populations in these areas tend to be more risk-averse, which affects their spending behavior. States like Uttar Pradesh and Bihar show lower savings rates, potentially due to higher outward migration.
The new estimated poverty line for 2023-24 is set at Rs 1,632 in rural areas and Rs 1,944 in urban areas. This delineation of poverty lines is crucial for understanding the economic landscape and for formulating effective policies to further reduce poverty in India.
Observer Voice is the one stop site for National, International news, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.