Lovenish Paliwal

Raising the standard: Time for a higher poverty line in India The time has come for India to raise its poverty line from the existing extreme poverty line of $1.90 per person per day to the lower-middle income (LMI) poverty line of $3.20, a level some 68 percent higher. This may seem odd to aspire to in what is not even the first post-pandemic year, but that is the main message coming out of our recent IMF working paper “ Pandemic, Poverty and Inequality: Evidence from India .”  No one should be surprised at this need for a higher poverty line. Per capita GDP growth in India averaged 3.5 percent per annum for twenty years from 1983 to 2003. In 2004, the official poverty line was raised by 18 percent, when the head count ratio (HCR) was 27.5 percent. Rapid growth (5.3 percent per annum) and an improved method of measurement of consumption (the modified mixed recall period (MMRP) rather than the Uniform Recall Period (URP)), resulted in the HCR reaching the low teens in 2011-12. The ...

  Mass poverty is back in India After 45 years, the world’s fastest poverty-reducing country adds the maximum poor in a year.  The pandemic struck India when it recorded its lowest economic growth in over a decade. The slowing economy had disproportionately impacted the rural areas, where the country’s majority of consumers and poor reside. Even in absence of any official data, one could perceive a rise in rural poverty. Unemployment was high; consumption expenditure was constantly coming down; and public spending on development was stagnant. These three factors together dictate the wellbeing of an economy. Cut to 2021. Rural Indians — mostly an informal workforce and poor by any accepted definition — have lived with irregular jobs for over a year. Anecdotal stories of precarious survival are pouring out. People are cutting back on food items; many have stopped having the basics like lentil as food inflation has spiked. The Mahatma Gandhi National Rural Employment Gu...