India has achieved a remarkable milestone in its fight against poverty, with the national poverty rate dropping below 5% for the first time in FY24, according to a recent report by SBI Research. This significant achievement reflects years of economic reforms, government policies, and social welfare programs aimed at uplifting the economically weaker sections of society.
Key Findings of the Report
1. Overall Decline in Poverty:
The poverty rate in India has fallen to approximately 4-4.5% in FY24, a dramatic reduction from around 22% recorded in 2011-12. This marks a major turning point in the country’s development trajectory, showcasing improved living standards and reduced income inequality.
2. Rural vs Urban Poverty:
- Rural Poverty: Rural areas experienced a sharper decline in poverty, with the rate reducing to 4.86% in FY24 from 7.2% in the previous year. This significant drop highlights the impact of targeted programs aimed at rural development and poverty alleviation.
- Urban Poverty: Urban poverty also saw a notable decline, reducing from 4.6% in FY23 to 4.09% in FY24. The narrowing gap between rural and urban poverty rates indicates a more equitable economic growth pattern.
3. Consumption Growth Among Lower Income Groups:
Increased consumption levels among the bottom 5% income group, especially in rural areas, played a vital role in lowering the poverty rate.
Factors Driving Poverty Reduction
1. Government Initiatives:
Numerous government programs have contributed to the decline in poverty, such as:
- Direct Benefit Transfers (DBT): Ensuring subsidies and welfare payments reach beneficiaries directly.
- PM Awas Yojana: Providing affordable housing to the poor.
- MGNREGA: Offering guaranteed rural employment.
- Improved Infrastructure: Enhanced connectivity and rural mobility have boosted income-generating opportunities.
2. Economic Growth and Reforms:
The consistent rise in GDP, job creation, and targeted reforms have facilitated income growth for marginalized sections of society, reducing poverty.
3. Social Welfare Programs:
Subsidized food distribution under the Public Distribution System (PDS) and free LPG connections under Ujjwala Yojana have improved living standards for millions.
Impact on Society and Economy
1. Job Creation and Economic Activity:
A reduction in poverty stimulates demand for goods and services, creating a ripple effect across the economy. This growth in economic activity further drives job creation and investment opportunities.
2. Improved Standard of Living:
Access to better housing, healthcare, and education has significantly improved the quality of life for millions.
3. Increased Rural-Urban Balance:
The narrowing rural-urban poverty gap reflects balanced development and enhanced mobility between regions.
Statements from SBI Research
The report emphasized the significance of rural consumption growth in driving down poverty levels. It also highlighted that higher allocation of resources to infrastructure and welfare programs has yielded substantial results. SBI researchers further noted that consistent policy measures will be required to maintain and build upon this progress.
Future Prospects
With poverty levels at an all-time low, India is now better positioned to focus on achieving broader socio-economic goals. Prioritizing education, healthcare, and skill development will be crucial in sustaining growth and reducing inequality further.
India’s achievement in reducing poverty to below 5% is a testament to the effectiveness of targeted policies and economic reforms. However, continued efforts will be necessary to address the remaining challenges, particularly in addressing inequality and ensuring that growth benefits all sections of society.
BY – NIKITA
