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
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.
THE ODD NUMBERS
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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