Context:

• According to the latest estimates released by the World Bank, the number of extreme poor in India has declined from 344 million to 75 million in 11 years.

1. Decline in Extreme Poverty: Data and Trends

According to the World Bank report, India has made remarkable progress in reducing extreme poverty between 2011–12 and 2022–23. Key figures are as follows:

• Extreme Poverty Rate (at $3.00/day, 2021 PPP):

• • 2011–12: 27.1%
  • 2022–23: 5.3%
  • Impact: Around 269 million (26.9 crore) people moved above the poverty line.
• Based on the old threshold ($2.15/day, 2017 PPP):

• • 2011–12: 16.2% (205.93 million people)
  • 2022: 2.3% (33.66 million people)
• Reduction across rural and urban areas:

• • Rural areas: From 18.4% to 2.8%
  • Urban areas: From 10.7% to 1.1%
• Multidimensional Poverty Index (MPI):
  • 2005–06: 53.8%
  • 2019–21: 16.4%
  • 2022–23: 15.5%

Analysis:

• India has achieved significant progress not only in income-based poverty (using both $3.00 and $2.15 thresholds) but also in multidimensional poverty (including health, education, and living standards).
• The reduction in both rural and urban poverty indicates that policy interventions have had a broad impact, especially in rural India, which witnessed a 15.6% fall in extreme poverty.

2. Role of Key States

• Uttar Pradesh, Bihar, Maharashtra, West Bengal, and Madhya Pradesh contributed to two-thirds of the national poverty reduction.
• In 2011–12, these states accounted for 65% of India’s extreme poor.

Analysis:

• Uttar Pradesh and Bihar: Historically high poverty and low HDI. The decline reflects successful rural development, DBT implementation, and welfare schemes.
• Maharashtra and West Bengal: Urbanisation and industrial growth helped reduce urban poverty, while rural investments also played a role.
• Madhya Pradesh: Tribal and marginal communities benefited from social schemes and rural infrastructure improvements.

3. Role of Government Schemes

Prime Minister Narendra Modi attributed this achievement to government policies and schemes. Major initiatives and their impact:

3.1. Pradhan Mantri Awas Yojana (PMAY)

• Goal: Provide pucca houses to the homeless and those in kachcha houses.
• Impact: Financial aid of ₹1.20 lakh in rural and ₹1.30 lakh in hilly areas enabled millions to get permanent homes. ₹12,000 for toilets under Swachh Bharat Mission improved living standards.

3.2. PM Ujjwala Yojana

• Goal: Provide clean LPG connections to poor households.
• Impact: Improved the health and quality of life for rural women by reducing dependence on wood-based cooking.

3.3. Jan Dhan Yojana

• Goal: Promote financial inclusion through access to banking services.
• Impact: Opened millions of bank accounts enabling direct benefit transfers (DBT) of subsidies and cash benefits.

3.4. Ayushman Bharat

• Goal: Provide free healthcare to the poor.
• Impact: Financial protection against serious illnesses reduced poverty relapse due to medical expenses.

3.5. Direct Benefit Transfer (DBT) and Digital Services

• Goal: Ensure transparent and efficient delivery of benefits.
• Impact: Reduced corruption and intermediaries; expanded access to financial and administrative services in rural areas.

3.6. Rural Development

• Goal: Improve rural infrastructure and livelihoods.
• Impact: Investments in roads, drinking water, and electricity boosted the rural economy and created jobs.

Analysis:

• These schemes not only ensured access to basic services but also economically empowered the poor.

• • Example: Ujjwala improved women’s time and health, boosting productivity.
  • Jan Dhan and DBT promoted savings and financial literacy.
• The effects are visible in the decline of the Multidimensional Poverty Index (MPI), addressing health, education, and standard of living.

4. Structural and Policy-Level Drivers

• Infrastructure Development: Investment in roads, electricity, and digital connectivity enhanced economic opportunities in both rural and urban areas.
• Transparency and Inclusion: DBT and digital tools ensured better delivery and minimized leakage in government welfare schemes.
• Economic Growth: According to other World Bank reports, India’s GDP growth (6.9% in 2022–23) contributed to increased incomes and employment.

5. Challenges and Way Forward

• Slowed Progress:

• • The pace of poverty reduction slowed during the COVID-19 pandemic, though it regained momentum in 2021–22.
  • Indicates that external shocks can affect progress.
• Inequality:

• • While poverty declined, income inequality and regional disparities remain concerns.
  • Urban poverty declined faster than rural, showing urban-rural inequality.
• Sustainable Development:

• • NITI Aayog aims to bring MPI below 1%.
  • Requires continued investment in education, health, and employment sectors.

About the World Bank

• Also known as the International Bank for Reconstruction and Development (IBRD).
• An international financial organization that offers loans, policy advice, and technical assistance to developing countries.

Key Facts:

• Established: 1944
• Headquarters: Washington D.C., USA
• Current President: Ajay Banga
• Mission: Reduce poverty and promote sustainable development
• Motto: "Working for a World Free of Poverty"

The Five Institutions of the World Bank Group:

Key Reports Published by the World Bank: