Statistics on Poverty in India

The World Bank, which defines poverty as survival on less than $1.25 per day, says India reduced poverty from 60% of the population to 42% between 1981 and 2005. An impressive improvement, although not as impressive as China’s. Also, India still accounts for one-third of the world’s 1.4 billion poor people. 43% of Indian children are malnourished, a third of the world’s total. Over 35% of Indians are illiterate, and more than 20 million children are out of school.

The main causes of this progress are undoubtedly the “green revolution” and, in recent years, the steady economic growth (I argued here that there is, generally, a correspondence between faster per capita growth and faster poverty reduction).

Here’s how South Asia – which is almost entirely India – compares to East Asia and Africa:

(source)

(source)

The government of India uses a method to measure poverty that is different from the World Bank measurement: given that an average adult male has to eat food representing approximately 2000-2500 calories per day in order to sustain the human body, how much would it cost to buy these calories? Those who have an income that is lower than this cost, are considered poor.

Actually, the Indian government uses the thresholds of 2,400 calories a day in rural areas and 2,100 in urban areas. (City dwellers are thought to exert less energy, so they should need to consume less. See here).

This translates into an official poverty line set at 26 rupees (around $0.53) per person per day in rural areas and 32 rupees in urban areas (reflecting the different cost of food in cities). This calorie based measure was developed in the early 1970s. Subsequently, the poverty line has simply been updated using consumer price indices. The official line delivers a poverty rate of around 32% of the population, as opposed to the 42% according to the World Bank.

(source, this graph uses the percentage of the population in poverty, or headcount poverty; the measure of poverty used is the one based on calorie intake described above; this information comes from the National Sample Survey (NSS), which tracks consumption by a representative sample of the population – survey data only available for the years in the graph)

Of course, the Indian system, like all poverty measures, can be criticized. A person may be able to afford to buy food that contains 2,400 calories, but the quality or nutritional value of this food (in terms of vitamins etc.) may be so low that we can hardly exclude this person from the population of the poor. He or she may be able to buy 2,400 calories, but not enough nutritional value to lead a decent life.

However, if we take this measurement at face value we see that caloric intake does indeed mirror the poverty statistics in a satisfactory way. Compare the graph above to the one below:

(source)

However, a more fatal criticism of India’s poverty measurements is that it include only consumption of food. Poverty is more than just a nutritional issue. People may be able to buy enough food of sufficient nutritional quality, but may be left without resources for shelter, healthcare, education etc.

Conclusion: the exact extent of poverty in India is disputed. There is a paper on this controversy here or here. More on poverty in India here.