India is not accurately described as a "poor country" because it has made significant progress in reducing poverty and is a major global economy, but it still has a large number of people living in poverty. While India is ranked among the top five countries with the largest number of people living in poverty, recent data shows a substantial decline in its poverty rate and millions have been lifted out of poverty. The reality is complex, with ongoing challenges like income inequality coexisting with economic growth.
Progress in poverty reduction
Consumption-based poverty: According to the World Bank, India's poverty rate (at the lower-middle-income level of $3.65 per day) fell to 28.1% in 2022-23 from 61.8% in 2011-12, lifting 378 million people out of poverty.
Multidimensional poverty: The number of people living in multidimensional poverty (which considers health, education, and standard of living) dropped from 29% in 2013 to 11.3% in 2022, with over 200 million people moving out of deprivation during this period, according to India Today.
Targeted policy success: Improvements have been particularly noted in areas like sanitation and cooking fuel access, indicating that targeted policies are having a positive impact, says the United Nations Development Programme (UNDP).
Persistent challenges
Large absolute numbers: Despite the percentage drop, India still has a massive number of people living in poverty, placing it among the countries with the largest populations in poverty, notes The Economic Times and Business Standard.
Income inequality: Significant disparities in wealth exist, with the bottom 50% of the population earning a small fraction of the average income, while the top 1% earns a disproportionately large share, reports India Today.
Economic structure: Some argue that a combination of factors, including a preference for stable employment over entrepreneurship and bureaucratic hurdles, contribute to the persistence of poverty, according to this Reddit thread.
Poverty in India - Wikipedia
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