Skip to main content

Fifth-largest economy? India added 56 million or whopping 79% to global ‘extreme poor’

By Prasanna Mohanty 

The World Bank’s latest poverty estimate delivers shocking news: India added a whopping 79% of new extreme poor to the world population in 2020. In absolute numbers, it says, the global population of extreme poor grew by 71 million and India added 56 million to this.
In this estimate, extreme poverty is redefined as per capita per day expenditure of $2.15 (earlier $1.9) based on 2017 PPP (purchasing power parity). As for estimating India’s new extreme poor, here is another shocker. It used “new household survey data” of a private entity, the Centre for Monitoring Indian Economy (CMIE), not the official data. That is because India simply doesn’t have official data on household consumption expenditure (proxy for household income) after 2011-12.
The CMIE data was, however, used after suitably adjusting it to the official National Sample Survey (NSS)-type consumption measure – last collected in 2011-12. There indeed was an NSS for 2017-18, but its data was junked after a leaked report revealed that “real” household expenditure had fallen for the first time in four decades.
This wasn’t surprising, given that it came soon after the twin shocks of demonetization and GST. Besides, the economy was slowing down in the end years of the previous UPA-II government.
It is quite ironic that after becoming the fastest growing major economy in the world, first in 2015 and then in 2021, and then the fifth-largest economy in 2022 (on the basis of Q1 of FY23 GDP size), the Indian government has shied away from collecting household expenditure data (proxy for household income).
Quite apparently, it has a lot to hide – the contrarian nature of the GDP growth. That India’s high GDP growth has accompanied even higher inequality growth is no secret. The benefits of high growth (income and wealth) have gone to the top – the top 1% and the top 10%, at the cost of the middle 40% and the bottom 50%.
The World Bank’s latest poverty estimate for India is quite in line with other global estimates published earlier too, the closest one being the US-based Pew Research Institute’s March 2021 report – before the far more devastating second wave hit India.
The Pew report revealed that India had added 75 million extreme poor (per capita per day expenditure of $2 or less, at 2011 PPP) in 2020, contributing to 57% of the global increase in extreme poverty – 131 million. This estimate was based on the NSS’s 2011-12 data.
Another remarkable feature of this addition of extreme poor in India is that the pandemic disproportionately hurt India. The World Bank database shows, at $2.15 level, India’s share of extreme poor in the world was, on average, 26% in the previous five years (2015-19). But when the pandemic struck, India’s share jumped to 79% (as per the World Bank’s 2022 estimate) or 57% (as per the Pew’s 2021 estimate).
World Bank estimates are based on private firm CMIE’s surveys, because Indian government wouldn’t collect household consumption data
The moot question, therefore, is why this happened. Why was India hurt disproportionately? Here is a clue. In 2020 (equivalent to India’s FY21), when the global output growth fell to -3.1%, India registered a far sharper decline at -6.6%. Little inquiry has been made by the Indian government to find the answers.
Arguably, the fundaments of the economy were broken by a series of man-made economic disasters – starting with the dismantling of the Planning Commission to demonetization and GST and then gross mismanagement of the pandemic.
While the dismantling of the Planning Commission opened the space for top-down, arbitrary and self-serving policymaking – which worked in the interest of private businesses – the other three events directly caused overnight loss of millions of jobs, small businesses and lives – producing mass poverty. When the masses become poorer, the demand dries up and the real economy (which the stock market isn’t, for example) shrinks. There is adequate evidence of this.
In FY22, when India registered 8.7% growth to become the fastest-growing major economy again, the private consumption (PFCE) was barely 1.4% above the pre-pandemic FY20 level; the per capita GDP was actually lower by -0.5% (of the FY20 level).
Now, as the threat of global recession grows with every passing day and India’s FY23 growth is pared down by the World Bank from 7.5% to 6.5%, India is banking on festive sales to boost growth. But here is a dampener.
According to UBS Securities India, the consumption is being driven by the top 20% – 59% in rural areas and 66% in urban areas; the majority of Indians are yet to recover from the pandemic shock. This is based on its survey last August.
Source: Centre for Financial Accountability



Importance of Bangladesh for India amidst 'growing might' of China in South Asia

By Samara Ashrat*  The basic key factor behind the geopolitical importance of Bangladesh is its geographical location. The country shares land borders with Myanmar and India. Due to its geographical position, Bangladesh is a natural link between South Asia and Southeast Asia.  The country is also a vital geopolitical ally to India, in that it has the potential to facilitate greater integration between Northeast India and Mainland India. Not only that, due to its open access to the Bay of Bengal, Bangladesh has become significant to both China and the US.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

'BBC film shows only tip of iceberg': Sanjiv Bhatt's daughter speaks at top US press club

By Our Representative   The United States' premier journalists' organisation, the National Press Club (NPC), has come down heavily on Prime Minister Narendra Modi for recent "attacks on journalists in India." Speaking at the screening of an episode of the BBC documentary “India: The Modi Question,” banned in India, in the club premises, NPC President Eileen O’Reilly said, “Since Modi came to power we have watched with frustration and disappointment as his regime has suppressed the rights of its citizens to a free and independent news media."

Chinese pressure? Left stateless, Rohingya crisis result of Myanmar citizenship law

By Dr Shakuntala Bhabani*  A 22-member team of Myanmar immigration officials visited Rohingya refugee camps in Cox's Bazar to verify more than 400 Rohingya refugees as part of a pilot repatriation project. Does it hold out any hope for the forcibly displaced people to return to their ancestral homes in the Rakhine state of Myanmar? Only time will tell.

China ties up with India, Bangladesh to repatriate Rohingyas; Myanmar unwilling

By Harunur Rasid*  We now have a new hope, thanks to news reports that were published in the Bangladeshi dailies recently. Myanmar has suddenly taken initiatives to repatriate Rohingyas. As part of this initiative, diplomats from eight countries posted in Yangon were flown to Rakhine last week. Among them were diplomats from Bangladesh, India and China.

Natural farming: Hamirpur leads the way to 'huge improvement' in nutrition, livelihood

By Bharat Dogra*  Santosh is a dedicated farmer who along with his wife Chunni Devi worked very hard in recent months to convert a small patch of unproductive land into a lush green, multi-layer vegetable garden. This has ensured year-round supply of organically grown vegetables to his family as well as fetched several thousand rupees in cash sales.

Over-stressed? As Naveen Patnaik turns frail, Odisha 'moves closer' to leadership crisis

By Sudhansu R Das  Not a single leader in Odisha is visible in the horizon who can replace Chief Minister Naveen Patnaik. He has ruled Odisha for nearly two and half decades. His father, Biju Patnaik, had built Odisha; he was a daring pilot who saved the life of Indonesia’s Prime Minister Sjahrir and President Sukarno when the Dutch army blocked their exit.

Hillary Clinton, Al Gore, Ban Ki-moon, others ask Bangladesh PM to 'protect' Yunus

Counterview Desk  A campaign has been launched to support Bangladesh-based economist, micro-finance guru and Nobel laureate Muhammad Yunus, seeking signatures from citizens across the globe in order to “protect” his work, life and safety.

Electricity sharing opens up new window for India’s eastern neighbourhood engagement

By Sufian Asif* Today, challenges like climate change, pandemics, energy reliance, economic crisis, and many more are concerning us. No nation can overcome these obstacles without the assistance and collaboration of other nations. Most importantly, many of these problems have international repercussions. South Asia is facing much more difficulty when compared to other regions. In South Asia, we have some regional organizations, but they are ineffective.