Poverty Decline in India After 2011–12

India has not released official poverty estimates since the 2011–12 Household Consumption Expenditure Survey (HCES). In this vacuum, multiple unofficial and often contradictory estimates have emerged. The paper by Himanshu et al. employs an alternative methodology—survey-to-survey imputation—to evaluate poverty trends in India from 2011–12 to 2022–23 and offers evidence of significant deceleration in poverty reduction during this period.

Key Findings of the Study

• Between 2004–05 and 2011–12, poverty declined substantially from 37% to 22%.
• From 2011–12 to 2022–23, the decline was marginal—from 22% to approximately 18%.
• In absolute terms, the number of poor decreased only slightly from 250 million to 225 million in the past decade.

Methodological Approaches to Estimate Post-2011 Poverty

• NSSO-Based Estimates using UMPCE
• Utilises Usual Monthly Per Capita Consumption Expenditure (UMPCE) derived from a single survey question.
• Adopted in NSSO surveys (71st round onwards) and Periodic Labour Force Surveys (PLFS).
• Lacks compatibility with older, detailed multi-question surveys (like HCES 2011–12).
• Estimated poverty: 26–30% in 2019–20.
• Limitation: Oversimplification due to single-question data collection.
• National Accounts-Based Approach (Surjit Bhalla et al., 2022)
• Uses Private Final Consumption Expenditure (PFCE) data from National Accounts Statistics.
• Applies PFCE growth to scale 2011–12 HCES data to post-2011 years.
• Limitation: Assumes uniform consumption growth, potentially overlooking distributional changes and inequality.
• Survey-to-Survey Imputation (Used by the Authors)
• Combines data from related surveys to estimate missing information.
• Specifically uses the Employment-Unemployment Survey (EUS, 2011–12) and PLFS (post-2017), due to similar sampling and methodology.
• Incorporates Tendulkar Committee poverty lines, as opposed to the World Bank poverty thresholds.
• Estimates calculated at the state level or using state-fixed effects for improved granularity.
• Conclusion: Poverty declined only marginally post-2011–12 despite earlier rapid decline.

State-Level Trends

• Significant progress in poverty reduction noted in Uttar Pradesh.
• Limited or negligible progress in traditionally poor states like Jharkhand and Bihar.
• Stagnation in poverty reduction in large states such as Maharashtra and Andhra Pradesh.

Corroborating Evidence for Slower Poverty Reduction

• GDP growth rate slowed from 9% (2004–05 to 2011–12) to 5.7% (2011–12 to 2022–23).
• Real rural wage growth decelerated from 13% annually (2004–05 to 2011–12) to 2.3% (2011–12 to 2022–23).
• Structural shift reversal: After decades of decline in agricultural employment, 68 million workers re-entered agriculture post-2017–18, suggesting distress-driven employment patterns.
• Agricultural productivity slowed in recent years due to workforce re-concentration, thereby limiting income growth and poverty reduction.

Significance and Policy Implications

• The study underlines the urgency of releasing official poverty data using updated and consistent methodology.
• It suggests that while economic growth remains a key factor in poverty reduction, it must be inclusive and accompanied by sectoral employment and wage gains.
• It calls for a renewed focus on rural development, wage growth, and social sector investments.
• The lack of robust and regular data hampers evidence-based policymaking in poverty alleviation.