What We Know Now About Poverty in India and About Defeating It
At the welcome dinner to the India Philanthropy Alliance (IPA) retreat, which was held on April 27, 2023 in New York City, IPA Vice-Chair Nishant Pandey, who is also the CEO of the American India Foundation, was asked to set the context by addressing this question: What would it take to virtually eliminate poverty in India in the next ten years? His comments were well received by the group, and we later asked him to reconstruct them into this blog post in order to share them with a wider audience.
By Nishant Pandey
June 1, 2023
Thanks for inviting me to speak on this important topic for all of our IPA organizations. Our teams are present on the ground, so we all are intimately familiar with the micro picture when it comes to poverty and vulnerability. I thought, let me paint the big picture of poverty in India and what it looks like in 2023.
Last year in October, around the time of the international day for the eradication of poverty, 3 reports came out:
The Global Hunger report, which placed India at 107 out of 120 countries it covered. I agree with the view that it should be called the Nutrition Report instead, but we will keep that debate aside for the purpose of this conversation.
A World Bank report, which said that some 71 million people have been pushed into poverty because of Covid and a staggering 59 million of them live in India!
A United Nations Development Programme (UNDP) report on multidimensional poverty, that covers a broader definition of poverty covering health, education, and income indicators.
If you read all three together, key insights emerge. Some are encouraging while others are not:
Today, 16.4% of the Indian population lives below the poverty line. This is roughly 235 million people, or 20% of the global population living below the poverty line. However, this is down from around 55% of the population (roughly 640 million) about 15 years back. I am sure all IPA organizations have had some small contribution to make as well in this staggering reduction of two-thirds of poverty based on where the country was in 2005. But India is still home to the highest number of poor people in the world, so the job isn’t done.
Additionally, around 18.7% of the population are vulnerable to multi-dimensional poverty (which means a combination of health, education and income vulnerabilities). Income poverty rates (based on 2011 Purchasing Power Parity USD 1.90 or roughly INR 155 per day) have gone down to roughly 22.5% of the population. That is roughly 315 million people.
This means that poverty is less widespread in India than before and therefore we need to be more intentional about who the poor are (targeting the right beneficiaries), where they live (targeting the right locations), what they do (for example, agricultural work vs. non-agricultural work, rural vs urban, informal vs formal, jobs vs self-employment, etc.) and what strategies would work on pulling these people out of poverty.
There are some interesting insights from the reports that help us on questions related to the last point:
Roughly 90% of the poor in India live in rural areas! What does it mean for our investments? This is a staggering figure, and we need to reflect on where our programs are located.
A significant majority of the poor live in just 8 states: UP, Bihar, MP, Odisha, Rajasthan, Chhattisgarh, Assam, Jharkhand. There are poor people everywhere in India, but greater focus on these states could help us create a disproportionate impact on poverty.
An estimated 4.5% of the population are in “severe multi-dimensional poverty”. Who are these people, where are they located, and how do we serve them through our programs? In a country like India, a 4.5% still amounts to 63 million “ultra poor” people! What are we already doing with such populations? What more can we do? And how?
Besides, there are two other big picture trends that we need to consider:
Female workforce participation has been declining in India. According to the World Bank report in 2021, for the first time it dropped below 20%, making India the worst in South Asia and among all emerging economies!
Climate change and its disproportionate impact on the poor and vulnerable. India is the only major economy of the world which has to grow from being a low income country to a high income country within the net zero context. What does it mean for the communities we aim to serve, both in terms of challenges and opportunities?
So, the takeaways for me in terms of what we need to consider in terms of big picture approaches going forward:
Needs-based and targeted. Poverty is much more concentrated and therefore there is a role for us to educate and inform our donors about where the greatest needs are, rather than their preferences on their villages/districts/states of origin. The Government of India has provided a useful framework by defining the Aspirational Districts Programme, the bottom 112 districts in India that need improvement in key development indicators.
Integrated programming. People’s lives are not siloed in “verticals” and there is an increasing realization among policy makers, donors and practitioners to look at the multidimensional nature of poverty and how health, education and income positively or negatively reinforce each other. Often non-profit organizations work on only one of these dimensions and miss out on the positive effects of convergence. Even if a particular organization doesn’t have capabilities in all three areas, they should aim to partner with organizations that complement their capabilities in terms of deploying a more integrated approach to poverty elimination.
Systems strengthening. As India moves from being a low middle income country ($2600 per capita income) to a middle income country, we need to evolve to better understand how to engage with the governments and strengthen their capacity to deliver essential services at the last mile. The good news is that India’s central and the state governments are welcoming multi-stakeholders partnerships and inviting credible organizations to strengthen the delivery of development outcomes. This provides a fertile ground for non-profits to mainstream their innovations, approaches, and capacities in the “system.” State governments are equally if not more important than the central government, given the issues we focus on. In a vibrant and functioning democracy that India is, partnering with the governments is also the only way to achieve scale and sustainability.
Specific identities, such as tribal communities. Notwithstanding the three points above, we have to be mindful that there are some specific constituencies like women, tribals, and other minorities who will need special attention irrespective of location in any particular state or with regard to the rural/urban divide. For example, even districts from relatively richer states like Gujarat and Kerala appear in the Aspirational Districts Programme.
The challenge of finishing the work of defeating poverty in India is a complex one. These are just some of the insights that, if turned into pragmatic programs and implemented effectively, can help contribute to finishing the job in the decade ahead.
