The Decline of Poverty in India: A Study
According to a new study based on the latest India Human Development Survey, poverty in India has seen a remarkable decline from 21% in 2011-12 to 8.5% currently. The study utilized the inflation-adjusted poverty line established by the Tendulkar Committee, which is crucial for government policy formulation and implementation.
This decline in poverty is even lower than the World Bank’s international poverty line of $2.15 based on the 2017 purchasing power parity. The findings, presented in a paper by economists led by Sonalde Desai from the think tank NCAER, indicate a more significant reduction in poverty in rural areas, where the headcount ratio fell from 24.8% to 8.6%. Urban areas also witnessed a decline from 13.4% to 8.4%.
The study also highlighted a substantial increase in food subsidies through the public distribution system and other benefits provided by various government schemes. However, the authors stress the need for a shift in the approach to social protection, focusing more on unforeseen life circumstances such as illness, marriage, and natural disasters that can push individuals into poverty.
Despite the overall reduction in chronic poverty levels, there is a need to address the vulnerability of individuals who may slip back into poverty due to unforeseen events. The study emphasizes the importance of ensuring that social protection systems evolve with the changing economic landscape.
Challenges and Solutions
The study proposes three principles for designing effective safety nets: universal programs for basic safety nets, risk insurance, and flexibility in institutional frameworks. It emphasizes the importance of adapting social protection programs to changing circumstances and warns against massive program expansions without adequate resources.
Economic growth and poverty decline create a dynamic environment that requires adaptable social protection programs. Keeping pace with social transformation will be a key challenge for India in achieving equitable development.
Flexibility in designing effective programs that can adapt to changing circumstances is crucial. The paper cites MGNREGS as an example, highlighting the need for flexibility in program design to achieve intended purposes.
Overall, the study underscores the importance of addressing poverty through a comprehensive and adaptable social protection system that can cater to the evolving needs of India’s population.
Conclusion
As India continues its journey towards reducing poverty levels, the focus must be on designing efficient and flexible social protection programs that can address the dynamic nature of poverty. By prioritizing universal basic safety nets and incorporating risk insurance, India can ensure that its social protection systems evolve in tandem with economic growth.
