SBI report: Rural poverty ratio falls below 5% for the first time in FY24.
Economy Business
According to a research report from the State Bank of India (SBI) released on January 3, 2025, the rural poverty ratio dropped below 5% for the first time, reaching 4.86% in Financial Year 2023-24 (FY24). This is a significant decrease from 7.2% in FY23 and 25.7% in 2011-12.
- The decrease in rural poverty is mainly due to higher consumption growth among the poorest 0-5% of the population, supported by government-led initiatives.
- The national poverty rate is now estimated to be between 4% and 4.5% in FY24, with the urban poverty ratio decreasing to 4.09% (from 4.6% in FY23 and 13.7% in 2011-12), reflecting a significant improvement in living standards nationwide.
- The report is based on data from the latest annual Household Consumption Expenditure Survey (HCES) for August 2023 to July 2024, released by the Ministry of Statistics and Programme Implementation (MoSPI) in December 2024.
Main Point :- (i) The rural poverty line shifted from the 5-10% income group in FY23 to the 0-5% group in FY24, with poverty lines estimated at Rs 1,623 for rural areas and Rs 1,944 for urban areas. Overall poverty in India now stands between 4% and 4.5%, with minimal extreme poverty remaining.
(ii) Consumption inequality in rural and urban areas decreased significantly, with rural inequality dropping to 0.237 and urban inequality to 0.284 in FY24, from 0.266 and 0.314 in FY23.
(iii) The gap between rural and urban Monthly Per Capita Consumption Expenditure (MPCE) narrowed, with rural MPCE reaching 69.7% of urban MPCE in FY24, an improvement supported by government initiatives like Direct Benefit Transfer (DBT), rural infrastructure development, and enhanced rural livelihoods.
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