Reality Check: Beyond Statistics, is Poverty Actually Reducing in India?

Governments and organisations have always shown a keen interest in measuring poverty, often using it as a benchmark for their performance. Leaders frequently claim success by stating, "We have reduced poverty and performed better than the previous government." But how accurate are these claims?

Reducing poverty is undoubtedly a positive economic and social indicator. It suggests that more people are earning, contributing to the economy and participating in social and political life. However, in an era where data can be easily manipulated, these numbers require careful scrutiny before being accepted at face value.

How is poverty measured in India?

In India, poverty is measured using consumption expenditure rather than income. The National Sample Survey Office (NSSO) is responsible for collecting this data. The last official poverty line was set by the Tendulkar Committee in 2005, which defined poverty as spending below Rs 447 per person per month in rural areas and Rs 579 in urban areas. Over time, experts have argued that these thresholds were too low. 

By 2011-12, after adjusting for inflation, the poverty line stood at Rs 33 per day in urban areas and Rs 27 per day in rural areas – numbers that remain India’s official benchmarks even today.

The Rangarajan Committee in 2011 proposed a revised methodology, raising the poverty line to Rs 47 per day in urban areas and Rs 32 in rural areas. Interestingly, while the Tendulkar method estimated poverty at 21.9% in 2011-12, the Rangarajan method placed it at 29.5%. This discrepancy highlights how changing the measurement criteria can significantly alter poverty statistics. 

What does the World Bank say?

The World Bank recently reported that 17 crore people escaped poverty between 2011-12 and 2022-23, with extreme poverty dropping from 16.2% to 2.3%. Their definition of extreme poverty is based on spending less than $2.15 per day – around Rs 180 – using consumption data rather than income. However, this method also has flaws. 

It fails to accurately capture the financial instability of self-employed or daily wage workers, who may earn irregularly but need to feed their families daily. Additionally, consumption data masks income inequality, creating an illusion of stability even when earnings are uneven.

A study published in EPW (April 2025) by economists Himanshu, Peter Lanjouw, and Philipp Schirmerand reveals that while poverty has declined since 2011-12, the rate of reduction has slowed compared to the 2004-05 to 2011-12 period. Their estimates suggest that the number of poor decreased from 25 crore in 2011-12 to 22.5 crore in 2022-23. 

They also point to the problems of using incomparable consumption surveys. Ideally, consumption surveys should be conducted every five years, but after the 2011-12 survey, the next one was delayed by a decade, arriving only in 2022-23. They argue that the 2022-23 and 2023-24 surveys cannot be reliably compared due to changes in sampling design, data collection techniques, and recall periods. For instance, asking about milk purchases over the last seven days versus two days can yield vastly different results, further complicating poverty assessment.

However, poverty is not just about consumption – it is a multidimensional crisis. Even if families can afford food, they may struggle with healthcare costs, school fees, or access to basic amenities like electricity and clean water. If poverty had truly declined, why do 30% of rural households still rely on MNREGA work, where wages are below market rates? Why does the government need to provide free ration to 80 crore people?

The debate on inequality adds another layer of complexity. The World Bank claims that inequality has decreased, citing a drop in the Gini Index (a measure of income inequality) from 28.8 in 2011-12 to 25.5 in 2022-23. However, the World Inequality Database (2023) presents a starkly different picture, reporting a Gini coefficient of 62 based on income. 

This contradiction suggests that while consumption patterns may appear equitable, income disparities remain severe. Can we forget that the richest 1% of Indians control 40% of the nation’s wealth? 

Can we forget how during the pandemic when millions suffered job losses, Mukesh Ambani earned Rs 90 crore per hour? Despite the HIndenburg allegations and case of fraud registered in the US, Gautam Adani’s wealth grew by Rs 1 lakh crore. Meanwhile, half of India’s population owns less than Rs 3.5 lakh. These are the people who can be pushed to poverty by one hospital bill.

In conclusion, while official reports and government claims celebrate poverty reduction, the reality on the ground tells a different story. Data can be presented in ways that highlight progress while obscuring persistent challenges. 

Before accepting these narratives, we must critically examine wages, living conditions, and income distribution. The true measure of development lies not in statistics alone, but in whether ordinary citizens experience tangible improvements in their lives. Blindly sharing WhatsApp forwards is not enough – understanding the data is essential.

Kavita Kabeer is a writer and satirist.

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