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India down as World Bank ups its poverty threshold

Posted by Ramoo on August 30, 2008

ENS Economic Bureau Posted online:

Wednesday, August 27, 2008

The number swelled to 456 million in 2005 from 420 million in 1981

NEW DELHI, AUGUST 26: Compared with 1981, 36 million more Indians are

now living below the poverty line, according to the new poverty

estimate released by the World Bank. Based on new data and higher

costs of living across the world, the World Bank has revised its

threshold of poverty to less than $1.25 a day, up from the previous

measure of one dollar a day. And this redefinition paints a sorry

picture of the poverty scenario for Indian policymakers in particular.

As per the new definition, the number of po

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or in India swelled to

almost 456 million people in 2005, up from 420 million in 1981. In

relative terms, however, the percentage of Indian poor has declined

from 60 per cent in 1981 to 42 per cent in 2005.

There is, however, a significant mismatch between the Indian

government’s official poverty estimates in 2004-05, which were to the

tune of 301.72 million people or 27.5 per cent of the total

population. However, unlike the World Bank figures, India’s official

estimate is based on the average calorie intake per day as opposed to

average daily wages. Speaking to The Indian Express, Pronab Sen, chief

statistician of India, said, “We don’t accept the World Bank estimate

of poverty since it is based on a single-figure formula, which is not

suited to the Indian situation. It doesn’t take into account the price

differentials between urban and rural areas or even between different

states.” The World Bank says its redefinition of the poverty line is

not arbitrary. It is the average poverty line found in the poorest

10-20 countries, it says. In the global context, the total number of

people living on less than $1.25 a day is 1.4 billion or roughly 26

per cent of the world population.


WHILE THE number of poor according to the new definition has grown,

that of people living on less than a dollar a day has declined to

266.5 mn (24%) in 2005 from 296 mn (42%) in 1981

THIS MEANS the number of people just above this line is still very

high and it is not falling

THOUGH A high growth has helped alleviate poverty, the Bank also

highlighted the importance of making growth more inclusive

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