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Poverty ratio falls to 21.9% in FY12

India’s poverty ratio dropped to 21.9% in 2011-12 from 37.2% in 2004-05,the fastest fall in several decades,as faster economic growth raised incomes across segments and propped up the spending power of millions of people.

Written by Fe Bureau | New Delhi | Published: July 24, 2013 12:17 am

India’s poverty ratio dropped to 21.9% in 2011-12 from 37.2% in 2004-05,the fastest fall in several decades,as faster economic growth raised incomes across segments and propped up the spending power of millions of people.

Poverty: Read full report

Based on the NSSO’s data on monthly per capita consumption expenditure,the Planning Commission computed persons below the poverty line at 25.7% for rural areas and 13.7% for urban areas during 2011-12,compared to 41.8% and 25.7% in 2004-05.

The national average fell to 21.9% from 37.2% in seven years to 2011-12,at 2.18% per annum. This was faster than the 0.74% annual fall between 1993-94 and 2004-05,the commission estimated using the Tendulkar method for mixed reference period (MRP).

People with a consumption expenditure of less than R816 per month in rural areas and R1,000 in urban areas are defined as poor. For a family of five,the all-India poverty line in terms of consumption expenditure amounts to about R4,080 per month in rural and R5,000 in urban areas.

“In 2011-12,India had 270 million persons below the Tendulkar Poverty Line

compared to 407 million in 2004-05,a reduction of 137 million over the seven-year period,” the plan panel said. The rapid decline in poverty comes in the backdrop of average GDP growth of 8.3% compared to 6.1% during 1993-2005. During the last few years,rural incomes have grown faster than urban incomes,after the government rolled out schemes such as MGNREGS.

The maximum number of poor people reside in UP (598.19 lakh),Bihar (358.15 lakh),MP (234.06 lakh),Maharashtra (197.92 lakh) and West Bengal (194.98 lakh).

While the present poverty estimate is based on the Tendulkar method,it had come under criticism,prompting the Centre to set up a committee under Prime Minister’s economic adviser C Rangarajan. But the Rangarajan committee is expected to submit its report by the middle of 2014.

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