India has many distinction of being in the numbered list of many categories. However, this distinction is bit awestruck. The recent trend in the world have suggested that Indian economy is resurrecting and many sectors like Information technology, healthcare and some other domains making good fortunes for the country. The recent distinction bestowed by World Bank is a curtain raiser for many who believe India is joining the league of developed nations. The news is centered on how India can carry the burden of one third of the world’s poor and what would it do to alleviate the poverty.
World Bank’s latest estimates on global poverty estimates that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005. This is likely to give fresh ammunition to those who maintain that economic reforms, which started in 1991, have failed to reduce poverty at a faster rate.
According to the new estimates, India had 456 million people or about 42% of the population living below the new international poverty line of earning income less than $1.25 per day. The number of Indian poor constitutes 33% of the global poor, which is pegged at 1.4 billion people.
There are 828 million people, or 75.6% of the Indian population living below earning of $2 a day. Even Sub-Saharan Africa, considered the world’s poorest region, is better than India. It has 72.2% of its population (551m) people below the earning of $2 a day level.
The estimates are based on recently recalculated purchasing power parity (PPP) exchange rates, which make comparisons across countries possible. The dollar exchange rates being referred as the criteria.
The full report has not yet been released, however, a briefing note sent by the Bank had some of the data and showed that the poverty rate, those below earning $1.25 per day, for India had come down from 59.8% in 1981 to 51.3% by 1990 , 8.5 percentage points over nine years. Between 1990 and 2005, it declined to 41.6%, a drop of 9.7 percentage points over 15 years. This clearly shows a much slower rate of decline.
According to the estimates, more than four out of 10 Indians live below what the world’s poorest countries consider the poverty line. The new estimates are sobering not just for India but for the developing world as a whole, as they reveal higher levels of poverty than earlier estimated.
In fact, East Asia is the region that has recorded the sharpest reductions in poverty from about 79% of the population in 1981 to 18% in 2005. Contrary to that, Eastern Europe and Central Asia has seen poverty rates go up from 1.6% to 5%. What is noticeable in this region is the decline in poverty till 1987, when it was down to just 1% of the population, and the sharp rise subsequently.
The Bank also makes the point that while raising people above the poverty line is a relatively achievable task. It also believes poverty levels in 1990 can be halved by 2015, although, it is proving very difficult to raise them above the earning $2 per day mark.
Source: World Bank