India’s poverty rate falls below 5% in 2024, extreme poverty nearly eradicated: SBI Report

In 2024, India’s poverty rate has fallen below 5%, with extreme poverty nearly eradicated, according to a research study by the State Bank of India (SBI).

The report estimates that national poverty rates are now between 4-4.5%, marking a significant improvement in living conditions across the country.

SBI’s findings, supported by data from the government’s Consumption Expenditure Survey, show that rural poverty dropped to 4.86% in FY24, a sharp decline from 7.2% in FY23 and 25.7% in FY12. Urban poverty also saw a reduction, falling to 4.09% in FY24, down from 4.6% in FY23 and 13.7% in FY12.

Prime Minister Narendra Modi recently highlighted that over 23 crore people have been lifted out of poverty in the past decade, reflecting the positive impact of government initiatives and economic growth.

SBI Research noted that poverty estimates may undergo slight revisions once the 2021 census is completed and updated rural-urban population data is published. However, the report projects that urban poverty could decline further in the coming years.

The poverty line, originally defined in 2011-12 and adjusted for inflation, now stands at Rs 1,632 for rural areas and Rs 1,944 for urban areas. Using this benchmark and fractile distribution data, poverty rates were calculated at 4.86% for rural areas and 4.09% for urban areas in FY24.

The report credits the decline in rural poverty to higher consumption growth among the bottom 5% of the population, leading to a shift in the poverty line. By FY24, the poverty line had moved to the 0-5% decile, indicating improved economic conditions for the country’s poorest segments.

This marked reduction in poverty demonstrates India’s progress in raising living standards and reducing inequality. With sustained economic growth and targeted policies, the nation is well-positioned to achieve further reductions in poverty, particularly in urban areas.