India’s Poverty levels declined to below 5%

General Studies Paper -2

Context: NITI Aayog has claimed that India’s poverty level has fallen to just five percent, citing the Household Consumption Expenditure Survey (HCES) 2022-23.

Findings of HCES 2022-23

• The urban-rural consumption divide has narrowed to71% in 2022-23 from a peak of 91% in 2004-05, so inequality is declining.
• Rural households spending on food has dropped below 50%of their total expenditure for the first time ever.
• There is a sharp rise in urban and rural consumption by over 5 timesfrom 2011-12 levels in current prices, hence India’s growth is not restricted to a few, but is very broad-based.
• As per the Niti Aayog’s multi-dimensional poverty index 2023,11% of the population was below the poverty line, based on which it has argued that 25 crore people have escaped poverty.

Changes in Spending Pattern

• There is lower spending on pulses and cereals — dropped below 5% of per capita consumer expenditure — and higher expenditures on conveyances, consumer durables, and consumer services.
  • It indicates that people are earning more and need to spend a lesser share of their income on food.
• Within food, the consumption of beverages, processed food, milk, and fruits is going up, an indication of more diverse and balanced food consumption.

Government Steps for Poverty Elevation 

• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): It provides at least one hundred days of unskilled manual work in a financial year to every household in rural areas as per demand resulting in creation of productive assets of prescribed quality and durability.
• National Food Security Act (NFSA), 2013:It gives legal entitlement to 67% of the population (75% in rural areas and 50% in urban areas) to receive highly subsidized foodgrains.
• Pradhan Mantri Ujjwala Yojana (PMUY) (2016): This initiative was introduced to provide LPG (liquefied petroleum gas) connections to women belonging to Below Poverty Line (BPL) families.
• Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM):  It aims to reduce poverty by enabling the poor household to access gainful self-employment and skilled wage employment opportunities resulting in sustainable and diversified livelihood options for the poor.
• Ayushman Bharat scheme:It offers health insurance coverage of up to ₹5 lakh per family per year to shield beneficiaries from the financial burden of expensive medical treatments, thereby preventing them from falling deeper into poverty due to healthcare costs.

Way Ahead

• Employment Generation:Creating more employment opportunities, especially in sectors that absorb large numbers of low-skilled and semi-skilled workers, can significantly reduce poverty.
• Skill Development:Investing in education and skill development programs like vocational training, apprenticeship programs etc. to enhance the employability of the workforce is necessary.
• Women’s Empowerment: Providing women with access to education, healthcare, financial services, and opportunities for employment can improve household income, enhance family well-being, and contribute to overall economic growth.