REALITY Of World Bank Poverty Numbers On India | How Many Indians Are Poor? I Answer

Summary

The video explores the Modi government's claim of lifting 270 million Indians out of poverty, challenging its validity. It highlights that the World Bank's data, which spans up to 2011, used a changed survey methodology to measure poverty. Despite the methodology shift, the World Bank's poverty line of $3/day remains controversial and may not be suitable for India. The video also discusses the impact of government subsidies and changes in survey methods, revealing that while poverty has reduced, the poverty figures may still be higher than reported, with over 300 million Indians remaining poor by certain benchmarks.

Takeaways

• 😀 The Modi government claims to have lifted 270 million Indians out of poverty, but the World Bank data includes the period before 2014, so it's not entirely due to the Modi administration.
• 😀 India lacks an official poverty estimate, but the World Bank uses the Household Consumption Expenditure Survey as a proxy to estimate poverty.
• 😀 The change in survey methodology, not the actual reduction in poverty, has contributed to the decrease in India's poverty rate from 27% to 5%.
• 😀 The revised poverty rate is based on improved survey methods that now ask about consumption over different time periods, leading to more accurate data.
• 😀 The World Bank uses a poverty threshold of $3 per day, which many argue is too low to reflect true poverty in India, considering regional differences in purchasing power.
• 😀 While experts suggest that 24% of Indians live in poverty, this figure also comes from the World Bank's calculations using various poverty lines.
• 😀 The World Bank regularly updates its Global Poverty Report, and in the 2025 update, India's new Household Consumption Expenditure Survey was accepted, revising previous poverty estimates.
• 😀 Key methodological changes include a shift from the Uniform Recall Period (URP) to the Modified Mixed Recall Period (MMRP), which helps capture more accurate consumption data.
• 😀 The subsidized food grains provided by the government, which are counted at market prices in the survey, have further reduced the apparent poverty numbers.
• 😀 The appropriate poverty line for India should be closer to $8–9 per day ($240–270 monthly), which is more realistic given living standards, but the World Bank's $3 and $4.20 lines do not reflect this.
• 😀 Despite a reduction in poverty under the $3 per day threshold, using a $6,000 per month expenditure benchmark suggests that 82% of Indians still live in poverty, with the absolute number of poor people actually increasing since 2011.

Q & A

What is the Modi government's claim regarding poverty reduction in India?

The Modi government claims to have pulled 270 million Indians out of poverty, according to recent World Bank data.

Why is the claim that Modi government alone removed 270 million people from poverty misleading?

The data from the World Bank uses a 2011 cutoff, and the Modi government came to power in 2014. Therefore, it includes data from the UPA (United Progressive Alliance) era, which means the claim is not entirely accurate.

What is the issue with India's official poverty estimate?

India does not have an official poverty estimate, and the government has not released any official poverty data since 2011.

How does the World Bank estimate poverty in India without an official poverty line?

The World Bank uses the Household Consumption Expenditure Survey as a proxy to estimate poverty, based on their own poverty threshold.

What is the significance of the Household Consumption Expenditure Survey in poverty estimation?

The Household Consumption Expenditure Survey helps determine the income and expenditure patterns of households, allowing the World Bank to classify people as poor or non-poor based on their consumption.

Why did India's poverty rate fall from 27% to 5% according to the World Bank?

The drastic fall in poverty rate is not solely due to a reduction in poverty but is also attributed to changes in the methodology of the poverty survey, including asking people about their expenses over different time periods.

What is the new survey methodology adopted by India for poverty estimation?

India adopted a new methodology known as MMRP (Mixed Monthly Recall Period), which allows for a more accurate representation of consumption by asking about expenses over different timeframes instead of just 30 days.

How did the change in survey methodology affect poverty estimates?

The change in methodology led to a more accurate reporting of expenses, thus contributing to a reduction in the reported poverty rate.

What are the three different poverty lines used by the World Bank in its report?

The World Bank uses three poverty lines: one at $3 per day (for low-income countries), one at $4.20 per day, and one at $8.30 per day (which is more suitable for middle-income countries like India).

What does the $3 poverty line represent in India, and why is it criticized?

The $3 poverty line is considered too low for India because it is more applicable to low-income countries, and many experts argue that this threshold doesn't accurately reflect the living standards in India.

According to the script, what is the appropriate poverty line for India?

The script suggests that the appropriate poverty line for India should be $8.30 per day, equating to a monthly income of less than ₹6,000, which is considered too low for a decent standard of living.

Has poverty actually increased or decreased in India over the last decade?

Poverty has decreased when measured by the $3 and $4.20 thresholds, but according to the $8.30 threshold, poverty has actually increased in the last decade.

How has government intervention, such as subsidized food grains, impacted poverty statistics?

Government subsidies, such as providing subsidized rice and flour at lower prices, are counted at market prices in the survey, which has led to an underestimation of poverty as the lower actual costs are not reflected.