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Poverty Rate in India Now Below 5%: NITI Aayog Chief

NITI Aayog CEO BVR Subrahmanyam has claimed that poverty in India has declined to below 5%, citing the latest Household Consumption Expenditure Survey (HCES) conducted between August 2022 and July 2023. The survey offers valuable data on the effectiveness of household spending patterns and poverty alleviation programs.

Subrahmanyam states, “Based on this data, poverty levels in the country could be closer to 5% or less.” He emphasized the survey’s importance in gauging poverty via household consumption metrics.

Significant Increase in Consumption Expenditure

The HCES data reveals a considerable rise in consumption expenditure, with monthly per capita spending surging about 2.5 times in rural and urban areas. Urban household average monthly spending grew 33.5% since 2011-12 to ₹3,510, while rural households saw a 40.42% hike, hitting ₹2,008.

Shifts in Spending Patterns

A notable shift is the decline in the proportion of expenditure rural households allocate to food, dropping below 50% of total spending for the first time.

The urban-rural consumption gap has also narrowed from 91% in 2004-05 to 71% in 2022-23, indicating falling inequality. “In food, consumption of beverages, processed food, milk and fruits is growing – an indication of more diverse and balanced consumption,” Subrahmanyam said.

Confidence in New Poverty Estimates

Considering survey data and trends, Subrahmanyam expressed conviction that “poverty in India is now below five per cent.” People below the poverty line mainly fall in the bottom 0-5% income segment. If the old poverty standard is adjusted for inflation, average spending is above subsistence levels even for the bottom 5-10% of rural households,

Moreover, healthcare and education benefits have not been accounted for, signalling “destitution and deprivation have nearly disappeared”, per the official. He also stressed rising rural incomes challenge narratives of a weak rural economy. The urban-rural divide narrowing further confirms broad-based, equitable growth.

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