As of February 25, 2024, India has made significant strides in reducing poverty, with less than 5% of the population now living below the poverty line and extreme destitution almost eradicated, highlighted a government official based on the latest Household Consumption Expenditure Survey for the year 2022-23. Concurrently, the claim was made that retail inflation rates may have been estimated higher than they actually were.
B.V.R. Subrahmanyam, the head of Niti Aayog, refuted the idea that India’s growth was insubstantial and limited to a select few, asserting that it was broadly based, with rural incomes and expenditures growing more rapidly than those in urban settings. Notably, there has been a narrowing of the urban-rural consumption gap from 91% to 71% from 2004-05 to 2022-23, indicative of decreasing inequality. The reduction in rural household spending on food to less than 50% of total expenses marks a historic low. The shift in consumer spending patterns towards more durable goods and services is interpreted as a sign of rising incomes and evolving lifestyles. In addition, diversification in food consumption towards beverages, processed foods, milk, and fruits was observed.
Exploring the details of poverty metrics, Mr. Subrahmanyam cited the latest expenditure figures revealing that even the lowest income rural households spent on average ₹1,373, suggesting that poverty rates might be well below 10% if considering a doubled poverty line benchmark since 2011-12. Citing implicit benefits such as food transfers and subsidies included in schemes like PM Garib Kalyan Anna Yojana, he is persuaded that the extant poverty level is under 5%. Not counted within the survey were additional benefits such as healthcare from Ayushman Bharat and free education, which, if included, further support the claim of a significant reduction in deprivation.
The survey, measuring between August 2022 and July 2023, emphasized increased consumption in both rural and urban households, approximated at 2.5 times over 2011-12 levels. This enhanced level of consumption, serving as an indicator of increased income levels, particularly emphasizes the strength of the rural economy. The decline in poverty and the lessening of the urban-rural divide are seen as reflections of the successful execution of poverty alleviation measures.