Decline in India’s rural poverty from 25.7% to 4.86% in last 12 years: SBI report

India’s rural poverty has declined significantly to 4.86 per cent in the financial year 2023-24, compared to 25.7 per cent in the financial year 2011-12. According to the State Bank of India’s research on the consumption expenditure survey, urban poverty has fallen to 4.09 per cent from 13.7 per cent over the last twelve years.

The SBI’s research highlighted that the sharp decline in the rural poverty ratio is due to higher consumption growth in the lowest 0-5 per cent decile, along with significant government support. The report emphasized that such support is crucial, as changes in food prices have a significant impact not only on food expenditures but also on overall spending patterns.

The research further underscored the possibility of minor revisions to these figures once the 2021 census is completed and the new rural-urban population share is published. It also suggested that urban poverty could decline even further. At an aggregate level, the report projected that poverty rates in India could now be in the range of 4 per cent-4.5 per cent, with minimal extreme poverty remaining.

The research also highlighted that the gap between rural and urban monthly per capita consumption expenditure (MPCE) has now narrowed to 69.7 per cent, a sharp decline from 88.2 per cent in 2009-10. This improvement is largely attributed to government initiatives such as Direct Benefit Transfers (DBT), the development of rural infrastructure, augmenting farmers’ incomes, and significantly improving rural livelihoods.