Absolute poverty almost eliminated from India: NITI Aayog member

Vulnerability will be eliminated in seven years

Absolute poverty in India, measured by the $1.9 per day income norm, has been virtually eliminated, with only about 1 per cent of people at this income level in 2024, according to Arvind Virmani, member, NITI Aayog.

 

The World Bank in the 1960s developed three poverty lines: the $1 a day line, $2 a day line, and $4 a day line. These have since been adjusted for inflation, with the $1 threshold now standing at $1.9 per day, Virmani said in his speech on the theme "A Vision of Viksit Bharat 2047". He delivered the lecture under the P V Gandhi Chair Oration of the Indian Merchants' Chamber (IMC) in Mumbai.

 

Poverty measured by this indicator, now referred to as absolute poverty, has declined from 12.2 per cent in 2011-12 to 2.3 per cent over 11 years and has fallen further to 1 per cent in 2024.

 

“That 1 per cent now cannot be addressed through general policy. These may be people living in the hills or remote areas. You have to go out there and find the actual individuals,” he said.

 

An even more interesting aspect, which is not widely discussed, is the $2 per day income threshold, now revised to $3.2. This figure has declined dramatically from about 54 per cent to 21 per cent and now stands at less than 15 per cent. These people can be classified as the vulnerable population. This vulnerability will also be eliminated in the next seven years, the NITI Aayog member said.

 

Referring to the opportunities, challenges, and threats to the economy, Virmani said there has been a shift in the share of workers in the population over the past 30 years. This demographic change will continue for the next 30-40 years.

 

“In developed countries such as the United States, Western Europe, and even China, Thailand, and Russia, the share of the working-age population has been declining for the past 30 years and will continue to decline over the next 30 years. Even in countries like Indonesia, Mexico, and Vietnam, where this share increased over the past 30 years, a decline is expected.”

 

India is the only country where the share will still rise marginally, he added.

 

"We will essentially have a comparative advantage in human capital. We need to focus on low-skill, middle-skill, and high-skill development. If we get it right, India will be a supplier of all types of skills, from the lowest level to the highest, across the world. That is a huge opportunity,” Virmani said.