Number of poor in India has gone up: World Bank

The shrinking power of the dollar has made more Indians poor, a World Bank report released on Tuesday said.

According to the survey, the actual number of poor in India has gone up over the years if the new poverty line benchmark - a daily income  of $1.25 - is taken into consideration.

However, if one were to consider the decades-old poverty line of daily income less than $1 or around Rs 40, the number of Indians living below the poverty line has gone down in the past three decades.

"The new estimates, which reflect improvements in internationally comparable price data, offer a much more accurate picture of the cost of living in developing countries and set a new poverty line of $1.25 a day," the report said.
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India is home to roughly one-third of all poor people in the world. It also has a higher proportion of its population living on less than $2 per day than even sub-Saharan Africa.

That is the sobering news coming out of the World Bank's latest estimates on global poverty. The fine print of the estimates also shows that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005. This is likely to give fresh ammunition to those who maintain that economic reforms, which started in 1991, have failed to reduce poverty at a faster rate.

India, according to the new estimates, had 456 million people or about 42% of the population living below the new international poverty line of $1.25 per day. The number of Indian poor also constitute 33% of the global poor, which is pegged at 1.4 billion people.

India also had 828 million people, or 75.6% of the population living below $2 a day. Sub-Saharan Africa, considered the world's poorest region, is better — it has 72.2% of its population (551m) people below the $2 a day level.

The estimates are based on recently recalculated purchasing power parity (PPP) exchange rates, which makes comparisons across countries possible. The dollar exchange rates being referred to here, therefore, are not the ones used in normal exchange rates.

While the full report has not yet been released, a briefing note sent by the Bank had some of the data and showed that the poverty rate — those below $1.25 per day — for India had come down from 59.8% in 1981 to 51.3% by 1990 or 8.5 percentage points over nine years. Between 1990 and 2005, it declined to 41.6%, a drop of 9.7 percentage points over 15 years, clearly a much slower rate of decline.

An FAQ on the new estimates, also provided by the Bank, however states, "India has maintained even progress against poverty since the 1980s, with the poverty rate declining at a little under one percentage point per year."