Behind the numbers: Economist Indira Hirway debunks India's poverty reduction narrative

 

By Rajiv Shah 

A recent article by noted economist Indira Hirway, titled “The Hoax of Decline in Poverty in India” and published in The Wire on July 8, 2025, casts serious doubt on official claims of a dramatic fall in poverty rates in India. Hirway critiques the recent estimates by economists C. Rangarajan and S. Mahendra Dev, which assert that extreme poverty declined from 29.5% in 2011–12 to 9.5% in 2022–23, and further to 4.9% in 2023–24—a near 25 percentage-point drop over a decade.

According to the World Bank, using the USD 2.15 per day (2017 Purchasing Power Parity - PPP) international poverty line, extreme poverty in India reportedly fell from 16.2% to 2.3%, translating into around 170 million people lifted out of poverty. However, Hirway contends that this statistical narrative is disconnected from the lived reality of millions of Indians.

“If only 4.9% of people are poor in India, why do 35% of children under five remain stunted, 18.5% wasted, and millions dependent on free food?” she asks, challenging the coherence of official data. She also points out that India is ranked 105th out of 127 countries on the Global Hunger Index, with an “alarming” score of 27.3, and that over 800 million people continue to rely on free grain distributions.

Hirway argues that poverty measurement itself is flawed. She criticizes the Rangarajan Committee’s poverty lines—₹64.66/day for rural areas and ₹91.2/day for urban—as grossly inadequate. “These thresholds are too low to measure meaningful deprivation,” she writes, adding that the World Bank’s USD 2.15 line is also unsuitable for India, a lower-middle-income country where the more appropriate threshold would be USD 3.65/day.

“India’s poverty statistics are not credible,” Hirway states bluntly. “It is time for the country to overhaul its poverty measurement and adopt a more realistic understanding of deprivation and vulnerability.” She notes that 20% of the population is still illiterate, 45% have not studied beyond primary school, and over 90% of the workforce remains informal, lacking any form of job security or social protection.

While acknowledging that economic growth and welfare schemes like food subsidies have played a role, Hirway warns against complacency. “Declaring victory over poverty on the basis of faulty lines hides the structural problems that keep people poor,” she writes.

In conclusion, Hirway calls for a reassessment of India’s poverty metrics: “Poverty is a multidimensional phenomenon. A narrow income-based line cannot capture the lived experience of millions. We must measure poverty in ways that reflect health, education, nutrition, and basic dignity.”

Her article serves as a sobering counterpoint to the optimistic projections of rapid poverty eradication, and a reminder that statistical gains do not always reflect the ground reality of deprivation and inequality in India.