Poverty in India is a multidimensional state of severe deprivation where individuals lack the financial resources and essential needs for a basic standard of living. India’s multidimensional poverty rate dropped from 29.17% in 2013-14 to 11.28% in 2022-23.
Poverty in India is a condition that affects an individual’s ability to live with dignity and basic financial security. Poverty means not having enough food to eat, a proper shelter to live in, access to education and basic healthcare. Even today, millions of people across the country struggle to meet their daily needs despite India’s growth as a developing economy. About 700 million people in India live on less than $ 2.15 a day. There are multiple causes of poverty in India, such as unemployment, low wages, economic downturns, lack of infrastructure, inflation and lack of education.
The impact of poverty in India is very serious as it leads to big problems such as malnutrition, stunting, disease prevalence, maternal & infant health, neurological impact and mental health disorders. Poverty is measured in India through consumption expenditure rather than income because it is more stable for self-employed or daily wage workers. The poverty limit is set at ₹32/day in rural areas and ₹47/day in urban areas. Internationally, the rate is set as $3.00 per person per day for low-income countries. For lower-middle-income countries, the limit is $4.20 per day, and for upper-middle-income countries, the limit is $8.30 per day.
What is Poverty in India?
Poverty in India is a multidimensional state of severe deprivation where individuals lack the financial resources and essential needs for a basic standard of living. India’s multidimensional poverty rate dropped from 29.17% in 2013-14 to 11.28% in 2022-23. Poverty in India includes insufficient food, safe water, shelter, education and healthcare. It affects over 700 million people living on less than $ 2.15 a day. Poverty is generally measured as earning less than 50% or 60% of a country's median income.
Latest Data of Poverty in India from NITI Aayog and World Bank:
India’s multidimensional poverty declined to 11.28% in 2022-23, while the World Bank estimated extreme poverty at 5.3% nationally, according to recently reported figures. Here is the latest available data on poverty in India. These figures are mainly based on reports from NITI Aayog and the World Bank: -
- India’s multidimensional poverty rate dropped from 29.17% in 2013-14 to 11.28% in 2022-23.
- Around 24.82 crore people came out of multidimensional poverty in the last 9 years.
- According to recent World Bank estimates, extreme poverty in India declined from 27.1% in 2011-12 to 5.3% in 2022-23.
- Major Indian states like Uttar Pradesh, Bihar, Madhya Pradesh, Odisha, and Rajasthan showed major improvements in poverty reduction.
- Kerala has one of the lowest poverty rates in India, with only 0.55% multidimensional poverty reported in 2023.
How is Poverty Measured in India?
Measurement of poverty in India is done through three approaches, which are international poverty lines, national poverty lines and the multidimensional poverty index. Let’s understand how poverty is measured in India: -
1. International Poverty Lines
The World Bank revised its benchmarks using the Purchasing Power Parity to account for cost-of-living differences. Extreme poverty stands for $3.00 per person per day for low-income countries. For lower-middle-income countries, the limit is $4.20 per day, and for upper-middle-income countries, the limit is $8.30 per day.
2. National Poverty Lines
Traditionally uses consumption expenditure rather than income because it is more stable for self-employed or daily wage workers. The Rangarajan Committee set the line at ₹32/day in rural areas and ₹47/day in urban areas.
3. Multidimensional Poverty Index
As per the Multidimensional Poverty Index, income alone doesn't capture the full experience of poverty. A person is considered poor if they are deprived in at least one-third of the dimensions, which are health, education and standard of living.
What is Impact of Poverty in India?
Poverty in India affects millions of people by limiting access to food, education, healthcare, and proper housing. It increases unemployment, malnutrition, and crime rates. Poor families often struggle to meet basic needs, which slows the country’s overall development. Poverty is a destructive cycle that leads to malnutrition, disease prevalence, maternal & infant health, neurological impact and mental health disorders. Let’s take a look at the impact of poverty in India: -
1. Malnutrition and Stunting
Lack of access to nutritious food leads to chronic malnutrition. In India, nearly 45% of child deaths are caused by malnutrition. It hampers physical and cognitive development. It also leads to the inability to perform daily activities smoothly due to various illnesses.
2. Disease Prevalence
Living in overcrowded or dirty environments with poor sanitation increases vulnerability to communicable diseases such as cholera, typhoid, malaria and pneumonia. The prevalence of diseases leads to physical illnesses that hamper an individual’s work life.
3. Maternal and Infant Health
Impoverished women face higher risks of maternal mortality due to deficiencies in micronutrients such as iron and iodine. Infant mortality rates are very high in low-income urban neighbourhoods compared to affluent ones.
4. Neurological Impact
High levels of stress hormones due to poverty, such as cortisol, can prevent the development of the hippocampus, which is crucial for memory and lead to heightened activity in the amygdala, making people more reactive to everyday stressors.
5. Mental Health Disorders
Adults living in poverty are 3 times more likely to experience depression or anxiety. This is often a vicious cycle as mental illness can lead to further loss of employment and income as they become unable to work.
Major Causes and Reasons of Poverty in India
Poverty in India is caused by unemployment, rapid population growth, low education levels, and a lack of skills. Many people earn very little due to poor farming conditions and limited job opportunities. Unequal distribution of wealth, inflation, and corruption also increase poverty. Poverty is caused by unemployment, economic instabilities, lack of infrastructure, inflation and lack of education. Let’s take a look at the causes and reasons of poverty in India: -
1. Unemployment and Low Wages
The big reason for poverty in India is a lack of decent-paying jobs or mismatched skills, which is known as structural unemployment, often leaving people without enough income to cover essentials like food and housing. At times, people receive very low wages, which doesn’t help cover utilities. Structural unemployment and low wages worsen poverty in India, limiting income tax growth and leaving families unable to afford food, housing, utilities, and essentials.
2. Economic Instabilities
Recessions and global disruptions such as the COVID-19 pandemic can trigger mass layoffs and hamper social safety nets, pushing millions into extreme poverty in India. These economic instabilities are often unpredictable, which creates massive economic instability.
3. Lack of Infrastructure
The other major reasons for poverty in India are poor roads, unreliable electricity and limited internet access, which can isolate communities from markets, schools and job opportunities. This lack of infrastructure can make their life very difficult, where they don’t get to upskill or educate themselves for lucrative work opportunities.
4. Lack of Education
Without access to schooling and UPSC coaching, people lack the skills and literacy required for better employment, which often traps their families in a generational cycle of poverty. Many lucrative work opportunities in the country do require quality education.
5. Inflation
Constant price rises for basic goods such as food and fuel cause a strain on the purchasing power of low-income families, making necessities unaffordable. Rising inflation makes it impossible to survive on low wages.
Conclusion
Poverty in India is a condition that hampers people's ability to cultivate basic financial security and satisfy needs such as nutritious food, water, comfortable housing, electricity, access to television, radio and internet and sanitation facilities. The causes of poverty are unemployment, economic instabilities, inflation and lack of education. The impact of poverty is malnutrition, disease prevalence, neurological impact and mental health disorders. Poverty in India is measured through the set limit of ₹32/day in rural areas and ₹47/day in urban areas. Internationally, poverty is categorized by three dimensions, which are extremely poor countries, countries with lower middle income and countries with upper middle income.