India has adopted an innovative poverty alleviation strategy called the "graduation approach," pioneered by Bangladesh's BRAC. Unlike traditional welfare methods, this approach provides comprehensive support to ultra-poor families, combining social protection, financial inclusion, and livelihood promotion. Despite significant progress in poverty reduction, challenges persist, requiring sustained efforts to achieve holistic and inclusive development.
History of Poverty Estimation in India
Pre-Independence Period
Dadabhai Naoroji's Poverty Line (1867): Proposed a subsistence-based poverty line ranging from Rs. 16–35 annually. Focused on the minimum needs for survival (food, clothing, shelter).
National Planning Committee (1938): Formed by Subhash Chandra Bose to define a minimum living standard.
Bombay Plan (1944): Suggested a poverty line of Rs. 75 per capita annually.
Post-Independence Period
1962 Working Group: Recommended Rs. 20 per capita monthly consumption expenditure (1960–61 prices).
Dandekar and Rath Committee (1971): Defined poverty based on calorie needs (2,250 calories/day), setting Rs. 17 as the rural poverty line.
Alagh Committee (1979): Introduced separate urban and rural poverty lines based on nutritional needs, adjusted for inflation.
Lakdawala Committee (1993): Retained calorie-based estimation with state-specific poverty lines.
Tendulkar Committee (2009): Shifted to a broader consumption basket including health and education. Defined a uniform poverty line of ₹33/day in PPP terms.
Rangarajan Committee (2014): Used updated nutritional and behavioral standards, but its recommendations were not adopted officially.
Modern Approaches
Multidimensional Poverty Index (MPI): Captures non-income-based poverty dimensions (health, education, living standards).
Periodic Labour Force Surveys (PLFS): Tracks poverty through income and employment data.
Current Status of Poverty in India
Decline in Poverty Rates:
Multidimensional poverty reduced from 29.17% in 2013–14 to 11.28% in 2022–23.
Approximately 129 million Indians live on less than $2.15/day.
Urban-Rural Disparities:
Rural poverty dropped from 32.59% to 19.28%, while urban poverty fell from 8.65% to 5.27%.
Key Drivers:
Improved sanitation, nutrition, education, and access to cooking fuel contributed to poverty reduction.
States like Uttar Pradesh and Bihar witnessed significant progress.
Poverty as a Critical Concern in India
1. Rising Inequality
Top 10% control 57% of income; bottom 50% share declined to 13% (World Inequality Report 2022).
2. Employment Challenges
Unemployment at 7-8% (CMIE, 2023); informal sector workers lack job security and benefits.
3. Rural Dependency on Agriculture
46% of the workforce in agriculture contributes only 18% to GDP. Marginal farmers face income volatility.
4. Urban Poverty and Slums
17% of the urban population resides in slums with poor living conditions (Census 2011).
5. Health Inequalities
58.7% of healthcare costs are out-of-pocket, pushing families into poverty despite schemes like Ayushman Bharat.
6. Educational Gaps
Learning poverty at 56.1% pre-pandemic (World Bank). Rural students face significant skill and education deficits.
7. Climate Vulnerabilities
Poor populations disproportionately affected by climate events like Cyclone Amphan, which displaced 2.4 million people.
8. Regional Disparities
States like Kerala have below 5% poverty, while Bihar remains over 25%.
Strategies for Effective Poverty Alleviation
1. Education Access and Quality
Expand Samagra Shiksha Abhiyan with digital tools and teacher training.
Bridge the digital divide for rural areas under NEP 2020.
2. Livelihood Diversification
Strengthen MGNREGA and rural entrepreneurship programs like SVEP.
Promote allied sectors (dairy, fisheries) for sustainable rural incomes.
3. Social Safety Nets
Universalize Direct Benefit Transfers (DBT) under PM-KISAN and Ayushman Bharat.
Introduce unemployment insurance for informal workers.
4. Financial Inclusion
Enhance Jan Dhan Yojana coverage with financial literacy drives.
Expand access to low-interest loans through NABARD and digital financial tools.
5. Employment and Skill Development
Align PMKVY training programs with industry-specific needs.
Promote public-private partnerships for employment in labor-intensive industries.
6. Addressing Malnutrition
Strengthen PDS with fortified foods and Poshan Abhiyan.
Scale community kitchens and mid-day meal programs.
7. Women’s Empowerment
Expand SHGs under DAY-NRLM and Stand Up India schemes.
Institutionalize gender budgeting at state levels.
8. Climate-Resilient Development
Expand crop insurance under PMFBY with timely payouts.
Promote renewable energy solutions like PM Kusum Yojana.
9. MSME Promotion
Enhance credit access under ECLGS and promote rural startups.
Integrate MSMEs with digital markets to boost resilience.
10. Urban-Rural Balanced Development
Expand One District, One Product (ODOP) for local job creation.
Develop affordable housing and satellite towns for urban migrants.
Conclusion
India’s embrace of the graduation approach and other innovative poverty alleviation strategies reflects its commitment to addressing poverty holistically. However, achieving the vision of an equitable society demands sustained policy reforms, efficient program implementation, and active community participation. By leveraging education, financial inclusion, and climate resilience, India can transform its poverty alleviation narrative into a global success story.
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