New phase of India's poverty challenge, Pg17

Key Highlights:

• The World Bank reported India's poverty rate fell to 2.6% using a $3-per-day threshold and 16.1% with a $4.2-per-day threshold in 2023.
• Poverty is projected to decline further to 14.2% by 2026 and 12.1% by 2028, dependent on productive job creation in poorer states.
• Youth unemployment increased to 15.9%, and real earnings have shown little movement despite India's significant GDP growth.
• Approximately 57% of India's poor population resides in a continuous region spanning from Uttar Pradesh to West Bengal.
• Unofficial updates to the C. Rangarajan committee poverty line for 2022-23 indicate Chhattisgarh and Jharkhand have the highest rural and urban poverty rates.

India Poverty Update.jpg

Detailed Insights:

• The World Bank uses international poverty lines of $3 and $4.2 per day to provide a global comparative assessment of poverty levels.
• The observed economic growth has not translated into a widely 'felt' improvement in living standards for many citizens.
• The International Labour Organization (ILO) has also highlighted a global trend where decent living is becoming increasingly unaffordable.
• The C. Rangarajan committee in 2014 established India's official poverty line at Rs 1,407 (urban) and Rs 972 (rural) monthly per capita expenditure.
• Updated unofficial Rangarajan poverty lines reveal substantial poverty reduction in some areas, such as urban Bihar, which saw a drop from 50.8% in 2011-12 to 9.1% in 2022-23.
• Challenges persist in the poverty-concentrated belt, with Jharkhand experiencing a 5.2% decline in factory worker wages in 2024-25.
• A high proportion of youth aged 15-29 are not in employment, education, or training (NEET) in Bihar (81% of districts), West Bengal (75%), and Uttar Pradesh (69%).

Key Concepts Involved:

• Poverty Line: A monetary threshold representing the minimum income or consumption expenditure required to afford basic necessities.
• Lower Middle-Income Country Threshold: A specific daily income level ($4.2 per day) used by the World Bank to measure poverty in lower-middle-income economies.
• Youth Unemployment: The proportion of the youth labor force (typically 15-29 years old) that is actively seeking but unable to find employment.
• Real Earnings: Wages or income adjusted for inflation, reflecting the actual purchasing power of an individual's earnings over time.