• India has lifted 171 million people from extreme poverty in the decade between 2011-12 and 2022-23, the World Bank said in its Poverty & Equity Brief on India.

• The World Bank Poverty and Equity Briefs (PEBs) highlight poverty, shared prosperity and inequality trends for over 100 developing countries.  

• The briefs are released twice a year for the Spring and Annual Meetings of the World Bank Group and International Monetary Fund and help users understand a country’s poverty and inequality context at-a-glance and seek to keep poverty reduction on top of the world’s agenda. 

• These indicators cover various aspects of poverty, including rates of poverty and the total number of poor, using both national poverty lines and international benchmarks ($2.15 for extreme poverty, $3.65 for lower-middle-income, and $6.85 for upper-middle-income).

Key points of the Brief:

• Over the past decade, India has significantly reduced poverty. Extreme poverty (living on less than $2.15 per day) fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23.

• Rural extreme poverty dropped from 18.4 per cent to 2.8 per cent, and urban from 10.7 per cent to 1.1 per cent, narrowing the rural-urban gap from 7.7 to 1.7 percentage points — a 16 per cent annual decline. 

• India also transitioned into the lower-middle-income category. Using the $3.65 per day LMIC poverty line, poverty fell from 61.8 per cent to 28.1 per cent, lifting 378 million people out of poverty.

• Rural poverty dropped from 69 per cent to 32.5 per cent, and urban poverty from 43.5 per cent to 17.2 per cent, reducing the rural-urban gap from 25 to 15 percentage points with a 7 per cent annual decline.

• India’s five most populous states — Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh — accounted for 65 per cent of the country’s extreme poor in 2011-12 and contributed to two-thirds of the overall decline in extreme poverty by 2022-23.

• Nevertheless, these states still accounted for 54 per cent of India’s extremely poor (2022-23) and 51 per cent of the multidimensionally poor (2019-21).

• Employment growth has outpaced the working-age population since 2021-22. Employment rates, especially among women, are rising, and urban unemployment fell to 6.6 per cent in Q1 FY24/25, the lowest since 2017-18.

• Recent data indicates a shift of male workers from rural to urban areas for the first time since 2018-19, while rural female employment in agriculture has grown.

• Highlighting the challenges that persist, the brief said that youth unemployment is 13.3 per cent, increasing to 29 per cent among tertiary education graduates. Only 23 per cent of non-farm paid jobs are formal, and most agricultural employment remains informal.

• Self-employment is rising, especially among rural workers and women. 

• Despite a female employment rate of 31 percent, gender disparities remain, with 234 million more men in paid work.

World Bank

• On July 1, 1944, as the battles of the Second World War raged in Europe and the Pacific, delegates from 44 countries met in Bretton Woods, New Hampshire to participate in what became known as the Bretton Woods Conference. 

• Their purpose was to agree on a system of economic order and international cooperation that would help countries recover from the devastation of the War and foster long-term global growth. 

• At its conclusion, the conference attendees produced the Articles of Agreement for the International Bank for Reconstruction and Development (soon called the World Bank) and the International Monetary Fund (IMF).

• The World Bank is like a cooperative, made up of 189 member countries. These member countries, or shareholders, are represented by a Board of Governors, who are the ultimate policymakers at the World Bank. 

• Generally, the governors are member countries’ ministers of finance or ministers of development. They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the IMF.

• The World Bank Group is a unique global partnership with five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.

Five institutions:

i) The International Bank for Reconstruction and Development: IBRD is a global development cooperative owned by 189 member countries. As the largest development bank in the world, it supports the World Bank Group’s mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries, as well as by coordinating responses to regional and global challenges. 

ii) The International Development Association: IDA helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing zero to low-interest loans (called “credits”) and grants for programmes that boost economic growth, reduce inequalities, and improve people’s living conditions.

Together, IBRD and IDA make up the World Bank.

iii) International Finance Corporation: Established in 1956, IFC is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilising capital in international financial markets, and providing advisory services to businesses and governments. Although part of the Bank Group, IFC is a separate legal entity with separate Articles of Agreement, share capital, financial structure, management, and staff.

iv) Multilateral Investment Guarantee Agency: MIGA was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders.

v) International Centre for Settlement of Investment Disputes: ICSID provides international facilities for conciliation and arbitration of investment disputes.

(The author is a trainer for Civil Services aspirants.)