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Statistics on Poverty in India

Content

1. World Bank numbers

2. Indian government numbers

3. Inequality

4. Alternative poverty measurement

1. World Bank numbers

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. The number in 2010 was 33%. 33% stands for about 400 million people. Because of population growth, this number of 400 million isn’t much below the number of some decades ago:

 Graph1

Even at a $5 a day poverty line (which is less than a third of the U.S. poverty line), 96 percent of Indians are poor.

graph2

An estimated 29.8% of Indians live below the country’s national poverty line in 2010 (see point 2 below). Here are two graphs showing the evolution of the poverty rate – perfcentages of poor Indians – according to the World Bank numbers:

graph3

An impressive improvement, although not as impressive as China’s (see also the first graph above). Also, India’s 400 million poor people account for one-third of all poor people:

graph4

The state of Uttar Pradesh alone has 8% of the world’s population who live in extreme poverty. However, it’s not India’s poorest state. With a population of 100 million people, Bihar is poorest. Average income is $294 per year, less than all but two Sub-Saharan African countries. More than half of children under 3 suffer from malnutrition. One in three malnourished children are Indian, and rates of malnutrition are higher in India than in sub-Saharan Africa. Nearly a third of all newborn deaths occur in India.

Interesting factoid: if income in India were distributed completely equally, the entire nation would still be living on less than half the UK poverty line. (The UK poverty line is a relative line: you’re poor in the UK when your income after tax is below 60% of the national median).

While the trend in India is going in the right direction, our optimism should be womewhat tempered when we consider that 43% of Indian children are still malnourished, and that is also a third of the world’s total. In India, 42% of children under five years of age are underweight. 58% of children under five surveyed are stunted. Over 35% of Indians are illiterate, and more than 20 million children are out of school.

The main causes of the reduction in the poverty rate over the last decade 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 economic growth and faster poverty reduction).

Here’s how South Asia – which is almost entirely India – compares to East Asia and Africa, in absolute numbers of people now rather than in percentages of population:

graph5

Here’s another graph showing the absolute numbers of people below the World Bank poverty line (also compared to China and Africa):

graph6

The number of poor people has grown in South Asia, but that’s partly because the total population has grown. The proportation of poor people in the total population has come down recently, after decades of stagnation:

graph7

 

2. Indian government numbers

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.

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 current poverty rate of around 30% of the population, as opposed to 33% according to the World Bank.

graph8

( 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:

graph9

However, a more damning criticism of India’s poverty measurements is that it includes 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.

Some more Indian government data:

graph11

Conclusion: the exact extent of poverty in India is disputed.

 

3. Inequality

Regarding inequality – which according to some is the better measure of poverty – we see that there has been a deterioration in India’s cities, but not in the country as a whole (see the first graph on this page):

graph12

Here’s another measure of inequality:

graph13

 

4. Alternative poverty measurement

India’s census form ask whether people own certain basic assets such as TV, phone, radio or bicycle. People who mention that they don’t own any of these can be considered poor. The map below colour-codes India’s districts according to the proportion of  households without these assets in each district. Lighter-coloured districts are “better off”:

graph14

In total, around 18% of households are “asset-less”. This poverty rate is a lot lower than the official one.

Just one example: only 18 Indians in every 1,000 own a car. In China the figure is 58, according to the World Bank, while in most European countries it is more than 500. India’s level of car ownership per capita is even lower than in Sudan, or Afghanistan.

Blog posted on 24/04/2014 @ 18:01

 

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