Number of poor in India has gone up: World Bank

August 27th, 2008 - 12:05 am ICT by IANS  

New Delhi, Aug 26 (IANS) The shrinking power of the dollar has made more Indians poor, a World Bank report released Tuesday said.According to the survey, the actual number of poor in India has gone up over the years if the new poverty line benchmark - a daily income of $1.25 - is taken into consideration.

However, if one were to consider the decades-old poverty line of daily income less than $1 or around Rs.40, the number of Indians living below the poverty line has gone down in the past three decades.

“The new estimates, which reflect improvements in internationally comparable price data, offer a much more accurate picture of the cost of living in developing countries and set a new poverty line of $1.25 a day,” the report said.

The new poverty line is based on the results of the 2005 International Comparison Program (ICP), which was released earlier this year.

As per the revised estimates for India, the percentage of people living below $1.25 a day decreased from 60 percent in 1981 to 42 percent in 2005.

At $1 dollar a day (2005 prices), poverty has declined from 42 percent to 24 percent over the same period.

In sheer numbers, the estimated poverty rates correspond to 267 million people living below a dollar a day in 2005, down from 296 million in 1981.

However, the number of poor living under $1.25 a day has increased from 421 million in 1981 to 456 million in 2005.

The difference in poverty estimates between that of World Bank and the government data stems from the use of different poverty lines. To assess global poverty on comparable terms, the World Bank uses an average of the national poverty lines of the world’s 15 poorest countries to determine the international poverty line at $1.25 per day at 2005 purchasing power parity (PPP) prices.

India, on the other hand, measures its poverty according to its own national poverty line, which, in 2005 PPP, translates to $1.02 per day.

The report however praised India’s growing economic might and increasing GDP which has considerably lowered down the number of poor according to the earlier definition but added that increasing equality and distribution of wealth is the need of the hour.

“High GDP growth in India has reduced poverty. However, to achieve a higher rate of poverty reduction, India will also need to address inequalities in opportunities that impede the poor from participating in the growth process,” the report stated.

In a new paper titled ‘The developing world is poorer than we thought but no less successful in the fight against poverty’ Martin Ravallion and Shaohua Chen revise estimates of poverty since 1981, finding that 1.4 billion people (one in four) in the developing world were living below $1.25 a day in 2005, down from 1.9 billion (one in two) in 1981.

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