INDIAN GROWTH STORY

 INDIAN GROWTH STORY- NEW INTERNATIONAL     POVERTY LINE 

World Bank introduced the concept of International Poverty Line in 1990 to capture the daily cost for a person to meet their basic needs, which was fixed at $ 1 for low income group. This limit was revised in 2008, 2015, 2022 and recently in 2025 taking it to $ 3 from $ 2.15. The same is now $ 4.20 and $ 8.40 raised from $ 3.65 and $ 6.85 respectively for Lower Middle Income Countries (LMIC) and Upper Middle Income Countries (UMIC) respectively.

World Bank, in its Spring 2025-Poverty and Equity Brief, highlighted India’s significant leap in reduction of extreme poverty from 16.20% in 2011-12 to 2.30% in 2022-23 at $ 2.15 per day per person with absolute reduction of 170 million from 205 million in 2011-12 to 34 million in 2022-23. Even at current extreme poverty line of $ 3, it is at 75 million which is 5.25% thus effectively uplifting 121 million people.

With the perspective of Lower Middle Income Countries (LMIC) at benchmark of $ 3.65, poverty fell from 61.8% to 28.1% during 2011-12 to 2022-23, thus lifting 378 million lives above poverty. With revised guidelines at $ 4.20 for LMIC also, it has come down from 61.8% to 28.1% during the same period.

Strikingly our Consumption Based Gini Index improved from 28.8 in 2011-12 to 25.5 in 2022-23 ( 0 the perfect equality and 100 the other extreme) whereas world inequality has deteriorated from 52 in 2004 to 62 in 2023.

Another significant achievement is reduction in rural-urban disparity, which reduced the extreme rural poverty from 18.4 % to 2.8% and urban from 10.7% to 1.1% reducing the gap from 7.7% to 1.7%. Similarly from LMIC perspective, rural poverty dropped from 69% to 32.5% and urban from 43.5% to 17.2% and overall poverty from 61.8% to 28.1%.

This has been despite three major event in the last decade, which impacted Indian Economic Growth Scenario, which are:

I- Demonetisation of ₹ 500 and ₹ 1000 notes in 2016 for clean up of the currency management system, which impacted immediate economic growth.

II-Introduction of Goods and Services Tax (GST) in 2017 as one of the greatest indirect tax reform impacting economic activities though temporarily. 

III-Worst global COVID-19 pandemic, impacting the global growth.

With proactive fiscal and monetary interventions, our economy has emerged as the global hotspot of economic growth.