The extreme poverty count fell from 22.5% in 2011 to 10.2% in 2019 and the decline in rural areas was much higher than in urban areas, estimates the study.
The paper titled ‘Poverty has Declined over the last decade But Not As Much As Previously Thought’ is jointly authored by economists Sutirtha Sinha Roy and Roy van der Weide.
The reduction in rural poverty was more pronounced with a 14.7 percentage points’ drop compared to a 7.9 percentage points’ fall in urban areas.
The paper followed two approaches to estimating extreme poverty. “Both approaches yield qualitatively similar levels and trends in headcount poverty estimated at the $1.90 line: poverty is about 12.3 percentage points lower in 2019 than 2011,” it said.
The paper said extreme poverty declined by 3.4 percentage points from 2011 to 2015 – to 19.1% from 22.5%. Poverty saw a sharper fall of 9.1 percentage points between 2015 and 2019 from 19.1% to 10%. Extreme poverty reduced by 3.2% percentage points between 2017 and 2018, which was the fastest rate in over two decades.
Since 2011, poverty reduction has slowed down, the paper pointed out.
The rate of poverty reduction between 2004 and 2011 is estimated at approximately 2.5% points per year.
Faster rural decline
While rural poverty declined by 4.4 percentage points between 2011 and 2015 from 26.3% to 21.9%, it fell more sharply by 10.3 percentage points during the period 2015 to 2019 from 21.9% to 11.6%.
Urban poverty dropped by 1.3 percentage points from 2011 to 2015 – from 14.2% to 12.9%, followed by a sharper decline of 6.6 percentage points – from 12.9% in 2015 to 6.3% in 2019.
However, urban poverty rose by 2 percentage points in 2016, coinciding with the demonetisation event, the paper noted.
It said farmers with small landholding sizes experienced higher income growth.
“Real incomes for farmers with the smallest landholdings have grown by 10% in annualized terms between the two survey rounds (2013 and 2019) compared to a 2% growth for farmers with the largest landholding,” it said.
It also noted a moderation in consumption inequality, albeit at a slower rate.
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