New Delhi: The American think tank Brookings Institution, in its latest report, lauded India for eliminating extreme poverty, marking a significant milestone in the nation's socio-economic landscape. Authored by economists Surjit Bhalla and Karan Bhasin, the report attributes the achievement to the Indian government's robust policy initiatives focused on redistribution, fostering inclusive growth throughout the past decade.
The study puts out statistics that show a substantial decline in the headcount poverty ratio and a surge in household consumption. The data presented challenges to previous estimates by the World Bank, indicating a lower number of impoverished individuals in India.
One of the pivotal factors contributing to this success, according to the study, is the amalgamation of high economic growth and a significant reduction in income inequality. The 'headcount poverty ratio at the purchase power parity $1.9 level plummeted from 12.2% in 2011-12 to a mere 2% in 2022-23.
The authors asserted that the elevated consumption growth in rural areas is a direct outcome of the government's unwavering commitment to redistribution. Publicly funded initiatives, such as the national mission for constructing toilets and the drive for universal access to electricity, modern cooking fuel, and piped water, have played a pivotal role, the study said.
Highlighting the impact of such policies, the report notes a staggering increase in rural access to piped water from 16.8% in August 2019 to an impressive 74.7% at present.
The authors emphasise that the elimination of extreme poverty in India not only heralds positive implications for global poverty rates but also signals the need for the nation to graduate to a higher poverty line.
The report comes at a time when two of the world's leading economies - Japan and the UK - have slipped into recession. Britain recently revealed a 0.3 percent contraction in the fourth quarter of 2023 and has officially entered a recession. Japan, once poised to become the world's largest economy, has also been struggling to recover after the Covid pandemic which crippled the country's finances.
The spotlight has now turned on India, which has emerged as a beacon of opportunity for investors. Projections from the International Monetary Fund suggest that India is poised to overtake both Japan and Germany in terms of economic output, with estimates placing the shift in 2026 and 2027, respectively.