From EconWiki
Jump to: navigation, search

India, with a population nearing 1.2 billion people, has seen a steady decline in poverty rates. The number of Indians living on less than $1.25/day decreased from 60% in 1981 to 42% in 2005. The rate of people living on less than a dollar a day also fell from 42% to 24% from 1981 to 2005[1]. However, according to the Multidimensional Poverty Index (MPI) developed by the Oxford Poverty and Human Development Initiative, eight Indian states account for more poor people than the 26 poorest African nations combined (over 410 million poor)[2]. The rate of people earning less than $1.25/day may be decreasing, but there is still acute poverty within the country.Although, according to the Indian government, 38% of India’s population, about 380 million people are considered poor. The committee used a different method to accumulate this number. The committee analyzed health, education, sanitation, nutrition and income as factors to determine poverty level. India has the highest amount of poor people out of any country in the world. With poverty rates decreasing in parts of the country, poverty projections for the future look promising. According to a UN Millennium Development Goals Report, 320 million Indians are expected to come out of poverty within the next four years; with India's projected poverty rate at 22% by 2015. India is the only country in Southern Asia that is on track to have its poverty rate cut in half by 2015 (51% in 1990 to 22% in 2015)[3].

In this new paper, Martin Ravallion and Shaohua Chen produce a major update of poverty numbers for the developing world between 1981 and 2005. The global poverty numbers have been updated because a new international price survey conducted in 2005 has revised upwards the cost of living data from an earlier survey in 1993. Based on this new data, the old international poverty line of $1.08 a day in 1993 Purchasing Power Parity (PPP) prices has been updated to a new international poverty line of $1.25 a day in 2005 PPP prices. The paper also produces estimates for poverty levels at a-dollar-a-day in 2005 PPP prices. To asses progress over time, the 2005 poverty lines have been adjusted back to 1981 using the best available consumer price indices for each country.

Global Estimates: Using this new data, the paper finds that poverty levels across the globe have declined, with 1.4 billion people (one in four) in the developing world living below US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981. In other words, global poverty rates fell from 52% in 1981 to 26% in 2005 [4]


Trends In Rural and Urban Inequality In India

1993-1994 1994-1995 1995-1996 1997 1999-2000
Rural Gini 28.5 29.19 28.97 30.11 26.22
Urban Gini 34.50 33.43 35.36 36.12 34.40

India Headcount Ratios

1997-88 1993-94 1999-00
Rural Official Estimates 39.4 37.1 26.8
Urban Official Estimates 39.1 32.9 24.1

India Poverty Gap Indexes

1997-88 1993-94 1999-00
Rural Estimates from unadjusted data and official poverty lines 9.4 8.4 5.2
Urban Estimates from unadjusted data and official poverty lines 10.4 8.3 5.2


  1. "New Global Poverty Estimates — What it means for India". World Bank
  2. "8 Indian states have more poor than 26 poorest African nations". The Times Of India. 2010-07-12
  3. "India's poverty will fall from 51% to 22% by 2015: UN report - Times Of India". 2011-07-08. Retrieved 2011-10-16
  4.,,contentMDK:21880725~pagePK:141137~piPK:141127~theSitePK:295584,00.html "Resources For." India. Web. 26 Apr. 2012.
  5. Pal, Parthapratim. "Inequality in India: A Survey of Recent Trends." Web. 25 Apr. 2012. <>.

("Poverty in India." Azad India. Azad India Foundation. Web. 23 Apr. 2012. <>.)

(edit) Although the outlining of India and its admirable decline in poverty is important, perhaps the most important thing in regard to India is its new found economic stability. For hundreds of years, India was subjected to inhumane treatment and total manipulation and extortion on the part of Great Britain and other super powers extracting India's fertile resources and profiting tremendously. As of today, Indian is one of the most forward moving countries in the world. Globalization has become the new demographic in which the world is most concerned with very similarly to the industrialization era. The world's top business corporations have extended their hand in interest in doing business with the once struggling country. India is now a major playing in international business and that should have been highlighted. References: "Multinational Companies in India (MNC)." Business in India. Web. 01 May 2012. <>. "Ban Ki-moon Wants India to Play Greater Role in World Affairs." The Economic Times. Web. 01 May 2012. <>.

Personal tools