With decline in poverty, shift focus — from free food to nutritional security

The World Bank's latest India Poverty and Equity Brief has reignited discussions around poverty in India, revealing that extreme poverty has plummeted from 27.1% in 2011 to just 2.6% in 2023, measured at the international poverty line of $3.00 per person per day. Similarly, poverty at the $4.20 per day threshold has fallen from 57.7% to 16.1% over the same period.

This represents one of the fastest declines in poverty globally. However, some argue that this stark reduction is a result of better measurement rather than genuine improvements in living standards.

The data tell a more nuanced story, with poverty dropping from 78% in 1983 to 2.6% in 2023, and NITI Aayog's multidimensional poverty index showing an even more impressive decline from 55.3% in 2005 to 11.3% in 2022. The key drivers of this rapid decline include economic growth and demographic shifts. GDP growth accelerated from an average of 5.7% annually during 1980-81 to 2004-05 to 6.9% during 2005-06 to 2024-25, while population growth slowed from 2.1% to 1.2% per year, resulting in per capita GDP growth more than doubling.

Agricultural growth has also played a crucial role, with farm wages growing at 5.4% between 2004-05 and 2013-14, although this has slowed since 2014-15. Despite this, poverty reduction has persisted. Employment in agriculture has remained stable, with labor largely constrained to low-productivity farming, limiting demand for manufactured goods.

This has raised concerns about the effectiveness of current food subsidy programs like PM-GKY, which is budgeted at Rs 2.27 lakh crore for 2026-27, given that extreme poverty is now at 2.6%. The question remains: with poverty at such low levels, why continue providing free food to over half the population? The answer may lie in shifting the focus from free food to nutritional security, addressing malnutrition, particularly among children under five, and improving soil quality to increase the nutritional value of staple crops.