The World Bank has released a new report on poverty. From the press release:
New data show 1.4 billion live on less than $1.25 a day, but progress against poverty remains strong
WASHINGTON, DC, August 26, 2008 – The World Bank said improved economic estimates showed there were more poor people around the world than previously thought while also revealing big successes in the fight to overcome extreme poverty.
The new estimates, which reflect improvements in internationally comparable price data, offer a much more accurate picture of the cost of living in developing countries and set a new poverty line of US$1.25 a day. They are based on the results of the 2005 International Comparison Program (ICP), released earlier this year.
In a new paper, “The developing world is poorer than we thought but no less successful in the fight against poverty,” Martin Ravallion and Shaohua Chen revise estimates of poverty since 1981, finding that 1.4 billion people (one in four) in the developing world were living below US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981.
India is poorer than we thought by international standards, but no less successful against poverty
Read the full report here. Post your comments below.
The WB site has a section on India. Excerpts from Revised Poverty Estimates: What does this mean for India?
Is India getting poorer?
No, not all. India has made steady progress against poverty. A look at the 25-year period between 1981 and 2005 shows that India has moved from having 60 percent of its people living on less than $ 1.25 a day to 42 percent. The number of people living below a dollar a day (2005 prices) has also come down from 42 percent to 24 percent over the same period. Both measures show that India has maintained even progress against poverty since the 1980s, with the poverty rate declining at a little under one percentage point per year.
But, although India has had significant success in reducing the number of the poorest of its poor – those living on less than a dollar a day ??? there are still a huge number of people living just above this line of deprivation. This is most evident when we study absolute numbers. The number of people living below a dollar a day is down from 296 million in 1981 to 267 million people in 2005. However, the number of poor below $1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This the biggest challenge facing India today.
A Times of India report highlights these statistics:
India is home to roughly one-third of all poor people in the world. It also
has a higher proportion of its population living on less than $2 per day than even
That is the sobering news coming out of the World Bank’s latest estimates on global
poverty. The fine print of the estimates also shows that the rate of decline of
poverty in India was faster between 1981 and 1990 than between 1990 and 2005. This is
likely to give fresh ammunition to those who maintain that economic reforms, which
started in 1991, have failed to reduce poverty at a faster rate.
Meanwhile, there was some confusion in the coverage of this report. Compare these two headlines. One is from IANS via CNN-IBN. The other is from Business Standard via Rediff.com – click on the stories below to go to the respective sites…