- Kishore Jha
In July 2013 Planning Commission came out with data that showed sharp reduction in poverty in the last seven-eight years. According to its data, population living below poverty line has declined from 37.2% in 2004-05 to 21.9% in 2011-12. Pro-liberalization economist and politicians are giving credit to policies of economic reforms for this sharp decline.
Some economists and journalists, who defend the process of economic liberalization, often argue that economic reforms have helped poverty reduction in the country and India would have achieved much more in this field, had it started economic reforms in the 1970s. They argue that poverty in India has reduced at a higher rate in the era of economic reforms and India could never have achieved this in the pre-reform period with 2% or 3 % “Hindu growth rate”.
In other words they are saying that policies in Liberalization Privatization and Globalization (LPG) era have helped in reducing poverty at a much higher rate which did not happen earlier. Their claims call for looking at poverty reduction statistics in the pre and post reform periods.
It is difficult to find a single source that has comparative data of poverty reduction between 1947 to 2102 as there is no study that has collected data across decades using the same method.
What is available is the following data from the Planning Commission and World Bank which suggests that there is no drastic reduction in poverty in post reform period, despite popular belief.
Planning Commission
Year
|
|
1973-74
|
56.4%
|
1983
|
45.7%
|
1987-88
|
39.1
%
|
1993-94
|
37 %
|
2000
|
27 %
|
World
Bank
Year
|
|
1974
|
55%
|
78
|
49%
|
83
|
42%
|
87
|
38 %
|
90
|
33%
|
94
|
40%
|
97
|
35%
|
2000
|
28%
|
2010
|
34 %
|
If one examines the above data, poverty reduced from 56.4 % to 39 .1% between 1974 and 1988 (pre reform period) as per Planning Commission data. This means that there was a 17.4 % drop in poverty rate in 14 years which translates into almost 1.25 % every year.
If we look into the data between 1988 and 2000 from the same source (12 years of post reform period), poverty rate came down from 39.1 % to 27 %. This translates into a 12.9% drop in 12 years or almost 1 % per year.
















