India’s poverty problem: Why the Brookings Survey is misleading

A recent study by the Brookings Institution, a US-based think tank, claims that India has eliminated extreme poverty, defined as living on less than $1.90 a day. The study, based on World Bank data, estimates that only 3.4 per cent of India’s population, or about 44 million people, were living in extreme poverty as of 2021. The study also projects that India will have zero extreme poverty by 2024, making it the first country in history to achieve this feat.

However, this study is flawed and misleading for several reasons. First, it uses a very low and outdated poverty line that does not reflect the reality of living costs and standards in India. According to the World Bank, the $1.90 a day poverty line was set in 2011, using the average of the national poverty lines of 15 low-income countries. Since then, inflation, exchange rates, and consumption patterns have changed significantly, making this poverty line inadequate and irrelevant for measuring poverty in India.

Second, the study ignores the vast inequality and regional disparities that exist in India. It does not account for the fact that India has one of the highest concentrations of wealth and income in the world, with the top 1 per cent owning more than half of the country’s wealth. 

According to Forbes, India had 140 billionaires in 2021, with a combined net worth of $596 billion. If we exclude these billionaires from the population, the average per capita income of India drops from $2,389 to $1,843, which is below the global average of $2,097. Moreover, the study does not capture the variations in poverty levels across different states, regions, and social groups in India. 

For instance, the poverty rate in Bihar, one of the poorest states in India, was 29.4 per cent in 2021, while the poverty rate in Kerala, one of the richest states, was only 0.9 per cent. Similarly, the poverty rate among the Scheduled Castes and Scheduled Tribes, the most marginalized communities in India, was 21.8 per cent and 18.7 per cent respectively, while the poverty rate among the general category was 9.2 per cent.

Third, the study overlooks the impact of the Covid-19 pandemic and the subsequent lockdowns on the livelihoods and well-being of millions of Indians. The pandemic has pushed an estimated 75 million people back into extreme poverty in India, reversing the gains made in the past decade. The lockdowns have also disrupted the informal sector, which employs about 90 percent of India’s workforce, and the rural economy, which supports about 70 percent of India’s population. 

The loss of income, jobs, and social protection has increased the vulnerability and insecurity of the poor and the near-poor, who are at the risk of falling into deeper poverty and hunger. According to the State of Food Security and Nutrition in the World 2021 report, India had 189.2 million undernourished people in 2020, up from 180.7 million in 2019.

Therefore, the Brookings Survey is not a reliable and accurate measure of India’s poverty situation. It is based on a flawed methodology, outdated data, and unrealistic assumptions. It also reflects a biased and distorted view of India’s development, which ignores the ground realities and the challenges faced by the majority of the population.

It is a disservice to the millions of Indians who are still struggling to survive and access their basic rights and needs. India needs a more comprehensive and nuanced approach to poverty measurement and reduction, which takes into account the multidimensional aspects of poverty, the diversity and complexity of Indian society, and the impact of the COVID-19 crisis. Only then can India truly claim to have eliminated poverty and achieved inclusive and sustainable development.