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What has driven India's poverty reduction? -Arjun Srinivas

-Hindustan Times

55 % Indians were classified as poor by the MPI methodology in 2005-06. India halved its poverty rate in the next 10 years. In absolute terms, the number of poor fell from 630 million to 360 million during this period.

New Delhi:
Improved nutrition, better sanitation and increased asset ownership have halved India’s poverty rate between 2005-06 and 2015-16, according to a study by the Oxford University.

In the 10-year period, 270 million Indians were pulled out of poverty in what is perhaps one of the most significant wins of the Indian economic story. In this period, per capita GDP grew from Rs 38,750 to Rs 88,746, and India became a lower middle-income economy.

Poverty statistics are notoriously controversial. It is very difficult to evolve a consensus around them. Poverty ratio varies significantly, depending on what the cut-off is for classifying the poor from non-poor. They also come with a significant time lag. India’s official poverty estimates are not available after 2011-12. There are credible alternatives to track absolute and relative, vis-à-vis other countries, progress in India’s battle against poverty.

One such measure has been developed by the Oxford University-based Oxford Poverty and Human Development Initiative (OPHI), which release something called Multi-Dimensional Poverty Index (MPI) for 105 nations.

The MPI is a more holistic measure because it considers dimensions of health, education and living standards and its India results are based on the findings of the National Family and Health Survey (NFHS).

People are designated poor according to the MPI, if they are deprived in at least one of the 10 indicators across the dimensions of education, health and living standards.

Fifty-five% Indians were classified as poor by the MPI methodology in 2005-06. India halved its poverty rate in the next 10 years. In absolute terms, the number of poor fell from 630 million to 360 million during this period. The decrease in poverty headcount has been driven mostly by an improvement in living standards, through better availability of material goods such as cooking fuel, sanitation facilities, and household assets.

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