Poverty in India

Poverty in India is an important issue in India, despite having one of the fastest growing economies in the world, clocked at a growth rate of 7.6% in 2015, and a sizable consumer economy: Deutsche Bank Research estimated that there are nearly 300 million people who are middle class. If current trends continue, India's share of world GDP will significantly increase from 7.3% in 2016 to 8.5% by 2020. In 2015, around 170 million people, or 12.4%, lived in poverty (defined as $1.90 (Rs 123.5)), a reduction from 29.8% in 2009.

The World Bank has revised its definition and benchmarks to measure poverty since 1990, with $2 per day income on purchasing power parity basis as the definition in use from 2005 to 2013. Some semi-economic and non-economic indices have also been proposed to measure poverty in India; for example, the Multi-dimensional Poverty Index placed 33% weight on number of years spent in school and education and 6.25% weight on financial condition of a person, in order to determine if that a person is poor.

The different definitions and different underlying small sample surveys used to determine poverty in India, have resulted in widely different estimates of poverty from 1950s to 2010s. In 2012, the Indian government stated 22% of its population is below its official poverty limit. The World Bank, in 2011 based on 2005's PPPs International Comparison Program, estimated 23.6% of Indian population, or about 276 million people, lived below $1.25 per day on purchasing power parity. According to United Nation's Millennium Development Goals (MDG) programme 270 millions or 21.9% people out of 1.2 billion of Indians lived below poverty line of $1.25 in 2011-2012.

Poverty in India is a historical reality. From late 19th century through early 20th century, under British colonial rule, poverty in India intensified, peaking in 1920s. Famines and diseases killed millions each time. After India gained its independence in 1947, mass deaths from famines were prevented. Rapid economic growth since 1991, has led to sharp reductions in extreme poverty in India. However, those above poverty line live a fragile economic life.

The World Bank reviewed and proposed revisions in May 2014, to its poverty calculation methodology and purchasing power parity basis for measuring poverty worldwide, including India. According to this revised methodology, the world had 872.3 million people below the new poverty line, of which 179.6 million people lived in India. In other words, India with 17.5% of total world's population, had 20.6% share of world's poorest in 2011. As of 2014, 58% of the total population were living on less than $3.10 per day . According to the Modified Mixed Reference Period (MMRP) concept proposed by World Bank in 2015, India's poverty rate for period 2011-12 stood at 12.4% of the total population, or about 172 million people; taking the revised poverty line as $1.90.

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