Four Facts on Inclusive Growth in India

Abstract

This paper analyzes data from recently released household expenditure data for 2022-23 and 2023-24. Data from these surveys indicate a substantial decline in poverty levels in India. Consistent with evidence presented in Bhalla et al. (2022), India has eliminated extreme poverty. In addition, the household expenditure data for 2023-24 documents one of the sharpest annual declines in the poverty headcount ratio. Consistent with this result is the finding that the bottom three deciles of the consumption distribution have experienced the largest ever increase in their consumption. Contrary to popular perception, there is strong evidence that India has experienced a sharp reduction in inequality over the last twelve years, 2011-12 to 2023-24. An immediate policy implication of the low prevalence of poverty is the need for an updated official poverty line. This paper adopts a relative poverty line approach to define new poverty lines for future policy considerations. 

author bio

  • Surjit S. Bhalla | He serves as a Senior Advisor of ZyFin Research Private Limited. Prior to his current role, he has worked as a Proprietary Trader, Strategist, and Portfolio Manager at the World Bank, Goldman Sachs, Deutsche Bank, and Oxus Investments. FULL BIO
  • Karan Bhasin | Karan Bhasin is an economist and policy researcher, currently a Non-Resident Fellow at ORF America and a PhD candidate in Quantitative Economics at SUNY Albany. He teaches at Johns Hopkins University and has previously worked with institutions like the IMF, World Bank, and Government of India.

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