2 Of the 14 billion people living below 125 a day in 2005 33 lived in India 3

2 of the 14 billion people living below 125 a day in

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2. Of the 1.4 billion people living below $1.25 a day in 2005, 33% lived in India. 3. Home to nearly 456 million poor people (by this international standard), India had the largest concentration of poor of any country. [ Note : India is no longer the country with largest number of poor, as of May 2018, Nigeria has the largest number of poor in the world and India may reach the 3 rd place before 2018 ends, as Congo is ] 10 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
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4. The proportion living below $1.25 a day outside China has fallen from 40% to 29% over 1981-2005, which is about the same proportionate rate of decline (about 30%) as India (from 60% to 42%). 5. India’s share of poverty in the developing world outside China has fallen, but only slightly, from 39% in 1981 to 38% in 2005. The fall occurred in the 1980s; the proportion was 38% even in 1990. 6. Looking across the rest of the developing world, a. many countries have clearly not had India’s success against poverty. b. But many have done better too. c. For example, both China and Brazil have seen higher proportionate rates of poverty reduction since the early 1990s, though for diferent reasons; growth-promoting reforms delivered a high pace of poverty reduction in China, while redistributive social policies were more important in Brazil. 11 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
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LESSONS AND SOME WARNINGS 1. It is clearly good news that there are signs of an emerging trend towards a faster decline in the fraction of poor in the country, and that we now see falling numbers of poor. a. It is too early to say that this is a (statistically) robust new trend, though it is certainly encouraging. b. Nonetheless, poverty is still a huge problem for India, with over 450 million people living below $1.25 a day in 2005. [According to the new world Bank poverty line of $ 1.90 per day, (revised in October 2015 from earlier $1.25), in 2013, 224 million people in India (21% of the population) were below poverty line, in dollar exchange rate terms, and 172 million (i.e. 12.4% of the population) in 2011 PPP terms] 2. The relatively weak performance of the agricultural sector, the widening disparities between and within urban and rural areas, and the lagging poor areas, remain important concerns. And it can be expected that India’s persistent inequalities in human development – linked to long-standing problems of public service delivery – will continue to constrain the scope for more rapid poverty reduction. 3. It is also encouraging that rising overall living standards in India’s urban areas in the post-reform period have had signifcant distributional efects, benefting the country’s rural poor. 4. While the attribution to the reforms is hardly conclusive – since we can have no comparison group, to observe India after 1991 but without the reforms – the research fndings reported here are at least consistent with the view that India’s eforts to create a more open and productive market economy have coincided with a reversal in the historical 12 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
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