Good news: Poverty has shrunk to a record 22%, says Plan Commission

By FP Staff

Poverty in India declined to a record 22% in 2011-12, the Planning Commission disclosed on Tuesday.  The new rate implies pverty has declined  by nearly three times under UPA rule since 2004-05 compared to the 11 years before that.

Over the last decade, poverty has witnessed a consistent decline with the levels dropping from 37.2% in 2004-05 to 29.8% in 2009-10.

The number of people living below the poverty line has shrunk to 21.9 percent in 2011-12 from 37.2 percent in 2004-05 on account of increase in per capita consumption.


The sharp drop was attributed to the high real growth in recent years, which raised the consumption capacity. However, critics believe  this is the outcome of the trickle-down impact of the record growth witnessed in the first decade of the new millennium.

“The data showed that nearly 2 crore people were pulled out of poverty every year from 2004-05 onwards, which resulted in a sharp drop in those below the Tendulkar poverty line to 27 crore in 2011-12 from 40.7 crore in 2004-05,” an Economic Times report said.


According to the Commission, in 2011-12 for rural areas, the national poverty line by using the Tendulkar methodology is estimated at Rs 816 per capita per month in villages and Rs 1,000 per capita per month in cities. This would mean that the persons whose consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 per capita per day in villages are not poor.

Earlier, the Planning Commission had triggered a major controvery by saying anyone spending more than Rs 32 per day in urban areas was not poor. This criteria for fixing poverty line was criticised across the political spectrum as being unrealistic and unmindful of present day realities.

Planning Commission  gave out the poverty ratio using the same criteria saying the number poor in the country have shrunk in the past 7 years.
The Commission said that for a family of five, the all India poverty line in terms of consumption expenditure would amount of Rs 4,080 per month in rural areas and Rs 5,000 per month in urban areas. The poverty line, however, will vary from state to state.

State-wise, the Commission said the poverty ratio was highest in Chhattisgarh at 39.93 per cent followed by Jharkhand (36.96%), Manipur (36.89%), Arunachal Pradesh (34.67%) and Bihar (33.47%).

Among the union territories, the Dadra and Nagar Haveli was the highest, with 39.31 per cent people living below poverty line followed by Chandigarh at 21.81 per cent. Goa has the least percentage of people living below poverty line at 5.09 per cent followed by Kerala (7.05%), Himachal Pradesh (8.06%), Sikkim (8.19%), Punjab (8.26%) and Andhra Pradesh (9.20%).


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