World Bank's Number Spin Shows Fewer Indians In Poverty Than Government Toll

06/10/2015 2:02 PM IST | Updated 15/07/2016 8:25 AM IST
Pacific Press via Getty Images
ALLAHABAD, UTTAR PRADESH, INDIA - 2015/07/15: An Indian homeless man eats food in front of his shelter in Allahabad. The United Nation's MGD in 2000 aimed to free millions from extreme poverty and hunger, illiteracy, poor health; however, bout 30 crore people still live in extreme poverty in India despite the Millennium Development Goal (MGD) programme expiring in December, a United Nations report has said. (Photo by Prabhat Kumar Verma/Pacific Press/LightRocket via Getty Images)

Maybe it's the magic of statistics or, hopefully, most of the world is getting something right in the quest to eliminate poverty.

For the first time ever, a source as authoritative as the World Bank has said that the number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population. Also, though India still has maximum number of the poorest, it had the lowest poverty rate among developing countries.

While defining the actual number of poor has been a fractious debate that has involved India's foremost economists and politicians of every persuasion, the new World Bank analysis says that a modified method of surveying poverty, could dramatically reduce the number of people--considered poor-- from the current 21% or 29% to 12% of the population.

Typically surveyors when collecting data on poverty in India, ask respondents to recollect the food and articles they may have eaten and bought over the last 30 days. That approach, the Bank's researchers, say is inaccurate and opine that a 7-day recall for specific food items along with a 1-year-recall for another basket of goods, would be more revealing.

The Bank, which has said that it will from henceforth use this definition to define poverty, says that the $1.25-a-day benchmark — popularly called the dollar-a-day poverty line — that was being used since 2005, has been updated to $1.90 a day to reflect the 2011-based purchasing power parity (PPP) prices. As a result, as against an estimated 900 million people in 2012, who lived on less than $1.90 a day, 2015 will have only 700 million.

More country specific details will be available once the Global Monitoring Report, using the new estimates, is launched in Washington DC on October 7.

The Business Standard says that the World Bank may be unduly optimistic. For one, the global poverty target of three per cent by 2030 seems optimistic, as the swift growth through the past decade is unlikely to be repeated across countries. Further, poverty is likely to remain at 20.1 per cent in Sub-Saharan Africa, which accounts for half the global poor.

Even if incomes were to rise at the average growth through 1994-2013, global poverty would stand at 5.7 per cent in 2030, with poverty in Sub-Saharan Africa at 26.9 per cent.

"The economic growth outlook is less impressive for emerging economies in the near future, which will create new challenges in the fight to end poverty and attend to the needs of the vulnerable, especially those living at the bottom 40 per cent of their societies," according to Kaushik Basu, chief economist of World Bank.

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