Rural poverty ratio declined below 5% in FY24 for the first time to 4.86 per cent from 7.2 per cent in FY23, according to a study by SBI Research.
Poverty dropped faster in rural areas during FY24. The poverty ratio in urban areas declined to 4.09 per cent from 4.6 per cent during the same time.
Higher consumption growth in the 0–5% fractile is the reason for this decrease in the rural poverty ratio.
As a result, the poverty line changed from the 5–10% decile in FY23 to the 0–5% decile in FY24.
According to the report, the increase in transfer programs like Direct Benefit Transfer (DBT) is another factor contributing to the shrinking rural-urban divide.
According to the SBI report, the revised poverty level for FY24 would be Rs 1,632 per month for rural regions and Rs 1,944 per month for urban areas after accounting for decadal inflation and the imputation component in Suresh Tendulkar’s poverty line.
An expert group led by Tendulkar had previously calculated the poverty line in 2011–12 to be Rs 1,000 in urban areas and Rs 816 in rural areas.
According to the report, India’s poverty rate may currently be between 4% and 4.5%.
According to the ERD, the majority of high-income states have savings rates higher than the national average (31%).
Bihar and Uttar Pradesh have low savings rates, which may be caused by increased out-migration.
