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LATEST NEWS UPDATES | McKinsey pegs poverty line at Rs 1,336 per month -Prabhakar Sinha

McKinsey pegs poverty line at Rs 1,336 per month -Prabhakar Sinha

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published Published on Feb 20, 2014   modified Modified on Feb 20, 2014
-The Times of India


NEW DELHI: A Global consultancy firm pegged a new level for poverty or empowerment line - at Rs 1,336 per month per person as against the poverty line prescribed by the government at around Rs 870 per month per person.

McKinsey, in a report, said the empowerment line determines the level of consumption required for an individual to fulfill his/her basic need for food, energy, housing, drinking water, sanitation, health care, education and social security at a level sufficient to achieve a modest standard of living.

According to the report - From poverty to empowerment: India's imperative for jobs, growth, and effective basic services - 56% of the population lacks the means to meet essential needs as consumption level falls below Rs 1,336 per person per month or almost Rs 6,700 per month for a family of five. This translates to 680 million people whose consumption levels across both rural and urban area of the country fall short of this mark.

The report said India can bring more than 90% of its people above the empowerment line in a decade by implementing inclusive reforms. Steps are needed to stimulate investment, job creation, farm productivity and improve the delivery of basic services. These reforms, the report said, could potentially allow India to achieve an average GDP growth of 7.8% between 2012-22. This could lift 580 million people above the empowerment line, leaving 100 million or 7% of the population below it in 2022 and 17 million or about 1% below the official poverty line.

But, if inclusive reforms do not happen, the report said, around 470 million Indians or 36% of the population would remain below empowerment line in 2022 and 12% of the population would be languishing below the official poverty line.

If inclusive reforms are implemented, 115 million non-farm jobs would be created by 2022, which will increase the spending power of those persons who migrated from agricultural sector. The inclusive reforms will also increase the farm productivity from the present level of 2.3 tonnes per hectare to about 4 tonness per hectare by 2022.

However, the inclusive growth, cannot be realized without public spending going up substantially. According to the report, the public spending on social services must double from Rs 5.7 lakh crore in 2012 to Rs 10.9 lakh crore in 2022 to fill the critical gap in the social infrastructure.


The Times of India, 20 February, 2014, http://timesofindia.indiatimes.com/india/McKinsey-pegs-poverty-line-at-Rs-1336-per-month/articleshow/30691907.cms


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