India's Poverty Has Dropped To 5%, Says Niti Aayog Chief

Less than 5% of Indians are now believed to be below the poverty line...

The most recent household consumption expenditure survey conducted by the statistics office indicates a robust performance in rural consumption, narrowing the gap with urban areas, potentially leading to a substantial reduction in the country's poverty levels, according to B V R Subrahmanyam, CEO of Niti Aayog. He suggested that based on this data, the poverty rate in the country could be as low as 5% or even less, emphasizing that rural deprivation seems to have significantly diminished.


This data could also influence the Reserve Bank of India's decision-making regarding interest rates, as the proportion of food and cereals in the retail inflation index has decreased. Subrahmanyam asserted that the data has effectively dispelled any uncertainties regarding the state of the rural economy.


The poverty level is determined based on consumption expenditure data, and there has been considerable contention surrounding the estimation of the number of individuals living in poverty. Notably, the latest available data is from 2011-12, as data for 2017-18 was not released until now. An analysis of the data revealed a shift in spending patterns, particularly in rural areas, with the proportion of expenditure on food decreasing from 53% in 2011-12 to 46.4% in 2022-23.


The recent household consumption expenditure survey highlights significant changes in both rural and urban consumption patterns. Notably, there has been a decline in the share of food and cereals, while spending on non-food items such as appliances, entertainment, beverages, healthcare, and transportation has increased. The survey indicates substantial growth in rural monthly per capita consumption expenditure, rising by 164% from Rs 1,430 in 2011-12 to Rs 3,773 in 2022-23, and urban areas experienced a 146% increase, from Rs 2,630 to Rs 6,459 during the same period.


Edited By: Arusha Farooq

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