Analysing poverty levels in India by comparing various surveys

General Trend in Poverty Reduction

• Sharp decline (2004–05 to 2011–12): Poverty fell from 37% to 22%.
• Slowdown (2011–12 to 2022–23): Further decline only to 18%, despite economic growth.
• Absolute poor: Fell marginally from 250 million to 225 million over the last decade.

Relevance : GS 2(Governance ,Poverty)

Methodological Categories Used for Estimating Post-2011 Poverty

1. UMPCE (Usual Monthly Per Capita Consumption Expenditure) Method
   1. Derived from a single-question consumption measure in NSS surveys.
   2. Limited comparability with previous surveys due to vague definitions.
   3. Estimated poverty: 26–30% for 2019–20.

• PFCE (Private Final Consumption Expenditure) Approach
  • Used national accounts data to scale up 2011–12 HCES.
  • Adopted by Surjit Bhalla et al. in 2022.
  • Criticised for disconnect from ground-level distribution data.
• Survey-to-Survey Imputation Method (Used in this paper)
  • Fills gaps between HCES and newer datasets using compatible companion surveys.
  • Favoured by World Bank for international poverty tracking.
  • The authors improve it by:
    • Using Tendulkar poverty lines (India-specific).
    • Employing EUS and PLFS (employment surveys) for imputation.
    • Estimating at state level with fixed effects to improve accuracy.

Regional Variations in Poverty Trends

• Uttar Pradesh: Significant reduction in poverty.
• Jharkhand & Bihar: Sluggish progress.
• Maharashtra & Andhra Pradesh: Poverty decline has stagnated.

Macroeconomic Correlates Supporting Slowdown

• GDP growth deceleration: From 6.9% (2004–11) to 5.7% (2011–22).
• Real wage growth slowdown: From 4.13% to 2.3% annually in rural India.
• Agricultural workforce reversal:
  • 33 million moved out (2004–17), but 68 million re-entered post-2017.
  • Linked to stagnant agricultural productivity and rising rural distress.

Data Gaps and Need for Official Estimates

• No official poverty data since 2011–12 CES.
• 2017–18 HCES scrapped, 2022–23 survey still awaits detailed release.
• Authors stress that without comparable official data, debate on poverty levels will persist.

Key Takeaways

• Poverty reduction in India has slowed since 2011–12.
• New estimates using improved survey matching methods indicate only marginal gains.
• Economic and employment data corroborate the trend.
• Urgent need for reliable, frequent, and comparable poverty data to inform policymaking.