Near Elimination of Absolute Poverty in India: Insights from NITI Aayog

Economy Politics AA, AR, ARVIND VIRMANI, ASIA, CHINA, ECONOMY, EUROPE/ASIA, GDP GROWTH, IMC, INDIA, INDIAN MERCHANTS ' CHAMBER, INDONESIA, INFLATION, JOB CREATION, MEXICO, MUMBAI, NI, NITI AAYOG, NORTH AMERICA, P V GANDHI, PHILIPPINES, RUSSIA, SUPPLY CHAIN, THAILAND, UNITED STATES, VI, VIETNAM, VIRMANI, WESTERN EUROPE, WORLD BANK Sophia Klein March 11, 2025

Near Elimination of Absolute Poverty in India: Insights from NITI Aayog

NITI Aayog’s Arvind Virmani reported that absolute poverty in India, defined as living on $1.9 a day, has dropped to around 1% in 2024. He highlighted significant improvement since 2011, with absolute poverty declining to just 2.3%. The vulnerable population earning above this level is also expected to decrease significantly, with India poised to benefit from rising human capital in the workforce.

According to Arvind Virmani, a member of NITI Aayog, absolute poverty in India, defined by an income threshold of $1.9 per day, has nearly been eradicated, with only about 1% of the population remaining at this income level as of 2024. This assertion was made during his lecture entitled “A Vision of Viksit Bharat 2047” delivered at the P V Gandhi Chair Oration hosted by the Indian Merchants’ Chamber in Mumbai.

Virmani noted that the World Bank initially established three poverty lines in the 1960s: $1, $2, and $4 per day, which have been adjusted for inflation to the current standards. Notably, the measurement of absolute poverty has significantly decreased from 12.2% in 2011-12 to 2.3% over an 11-year period, falling further to 1% by 2024. He emphasized that the remaining population in absolute poverty is comprised of individuals in remote locations, indicating the need for targeted interventions to identify and assist them.

Additionally, the $2 per day income threshold, now revised to $3.2, has seen a significant reduction from approximately 54% to 15%. Those living just above the absolute poverty line are considered a vulnerable population, which NITI Aayog aims to alleviate within the next seven years.

Virmani highlighted the demographic shifts occurring within the workforce over the past three decades, particularly in relation to aging populations in developed countries. While nations like the United States, Western Europe, and China are witnessing a decline in their working-age population, India stands out as the only country forecasted to see a marginal increase in this demographic in the coming years.

He articulated that this trend provides India with a unique advantage concerning human capital development. He stressed the importance of focusing on the development of various skill levels, stating that if executed effectively, India can position itself as a significant supplier of skills globally, ranging from low to high skill levels—a vast opportunity for the nation.

In conclusion, the progress made towards the near elimination of absolute poverty in India and the substantial decrease in the vulnerable population demonstrates the effectiveness of governmental policies over recent years. The anticipated demographic advantages present opportunities for India to capitalize on human capital development. By targeting skill development across various levels, the nation can bolster its position as a global supplier of diverse skills, fostering economic growth and prosperity.

Original Source: www.business-standard.com