Rural Poverty in India Sees Remarkable Drop to 4.86% in 12 Years: SBI Report

Social Issues Social Inequalities and exclusion

Posted by NewAdmin on 2025-01-28 06:32:45 |

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A recent report by the State Bank of India (SBI) highlights a significant reduction in rural poverty across India, with the rural poverty ratio falling from 25.7% in 2011-12 to just 4.86% in 2023-24. This drastic change is attributed to increased consumption growth among the lower-income groups, particularly the bottom 0-5% decile, supported by substantial government initiatives. Meanwhile, urban poverty has also decreased, dropping from 4.6% in 2011-12 to 4.09% in the same period.

The report suggests that India’s overall poverty rate now stands at around 4-4.5%, with extreme poverty almost non-existent. This remarkable improvement in rural poverty is largely driven by government policies aimed at boosting rural infrastructure, enhancing farmers' incomes, and providing direct benefit transfers (DBT) to the poorest sections of society. Additionally, these changes have led to a notable reduction in the income gap between rural and urban areas.

Further analysis reveals that rural consumption has rapidly caught up with urban consumption, with the gap in per capita consumption expenditure (MPCE) declining from 88.2% in 2009-10 to 69.7% in 2023-24. This shift is attributed to better infrastructure, including improved connectivity and the building of over 700,000 kilometers of rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY). These infrastructure projects have drastically improved mobility, facilitating easier access to markets and boosting consumption patterns in rural areas.

The report also underscores that states such as Bihar and Rajasthan, once lagging behind, have made impressive strides in narrowing the rural-urban divide, with consumption behavior shifting from food to non-food items, indicating a rise in living standards. However, food inflation remains a challenge in lower-income states, where it significantly dampens consumption demand.

The government’s focus on uplifting rural livelihoods through direct support and infrastructure investment has been a game-changer. The consumption shift, from basic food needs to manufactured goods like toiletries and clothing, is a clear indicator of the improving quality of life in rural India. As the gap continues to narrow, India's rural regions are poised for even greater growth, making poverty reduction an achievable goal.

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