How many Indians are poor? An answer to this question remains elusive, notwithstanding the fact that after a gap of 12 years, the National Sample Survey Office (NSSO) conducted a Household Consumption Expenditure Survey (HCES) in 2022-2023 and released its findings this February.
National income poverty level is measured on the basis of this survey. The government has not released any poverty estimate based on the latest HCES.
However, a few economists have estimated poverty using this survey data which show that the level of poverty has dipped in India. Broadly, going by these estimates, less than 10 per cent Indians were poor in 2023, in comparison to around 21 per cent in 2011-2012.
The latest estimate comes from the National Council of Applied Economic Research (NCAER) through its India Human Development Survey that tracks the impacts of “economic changes and public policies on household well-being.”
This survey says that about 8.5 per cent Indians are poor. The NCAER estimates faster poverty reduction in rural areas than in urban areas.
In an opinion piece in a daily newspaper, Sonalde Desai, who led the analysis, wrote, “We must move past the futile debate about estimating the exact number of poor individuals and accept that poverty is declining.”
However, the NCAER estimate and Sonalde’s assessment bring out aspects of India’s poverty that have the potential to undo the great progress made in poverty reduction. India’s geography of poverty remains the same: the officially demarcated poorest 200 districts, currently referred to as the ‘aspirational districts’. Also, the social and economic backgrounds of the poor in India remain the same: either they belong to the socially marginalised groups or are in economically disadvantaged geographies like forested areas.
It is accepted that most of India’s poor are born in poor households (coincidently in the socially marginalised population groups), setting in an inescapable trap of poverty. It is called the “accident of birth” that certainly defines whether one will be poor in the country.
Sonalde in her analysis says that this equation has changed. “Whereas accidents of birth largely shaped the fortunes of Indian citizens in the 20th century, the 21st century has seen a rising importance of accidents of life,” she writes, giving an authoritative conclusion in the change in poverty equations in the country.
Of the poor population of 8.5 per cent as per NCAER assessment, 3.2 per cent are poor by birth and 5.3 per cent are poor due to “accident of life”. In the NCAER assessment, there is a group of populations termed as “vulnerable”. While 8.5 per cent of India’s population is poor, the vulnerable population is 37.4 per cent.
This vulnerable population though is not poor but can slip below the poverty line at any point of time. And the reasons: “accident of life” which includes physical accidents, natural disasters, and health emergencies and major economic events like marriages or festivals besides others.
It is widely known that health expenditure and economic losses due to erratic weather conditions and natural disasters, majorly impact households’ poverty level. The high level of “vulnerable” population indicates the near chronic situation in poverty despite the huge spending on anti-poverty programmes.
The vulnerable population might consist of people who escaped poverty due to these programmes, but still don’t have the capacity to remain above the poverty line. This is clear from the assessment that decline in poverty is “coupled” with an increase in the vulnerable population. In the future, this population group will increase.
So is the “accident of life”, the most prominent being the climate change induced erratic climatic events that impact the population dependent on agriculture who also account for a significant portion of the poor population. This is where the public development programmes must gear towards building the safety net, for uplifting people above the poverty line and enabling the vulnerable population to further move out of this precarious situation. This is the way India can attain poverty eradication, sustainably.