What the rollercoaster ride from pandemic poverty to recovery taught us
Subscribe to enjoy similar stories. India has made remarkable progress in reducing income-based extreme poverty over the past several years, but this journey has been anything but straightforward. From 2015 to 2023, the country experienced a sharp rise in extreme poverty, worsened by the covid pandemic, followed by an equally dramatic recovery.
Household income data from PRICE’s ICE 360 surveys (2016, 2021 and 2023) provide critical insights into these fluctuations and sheds light on how government interventions, economic resilience and social programmes shaped the fight against extreme poverty. Our estimates of the Indian population in extreme poverty are derived from income data adjusted to 2011-12 prices, based on the international poverty line of $1.90 by purchasing power parity (i.e., ₹11,207 annual per capita income). To account for inter-state and rural-urban differences in living costs, the annual cost-of-living index (CPI) was employed, with data taken from the National Statistical Office (NSO).
In rural India, extreme poverty was a persistent issue even before the pandemic. In 2015-16, 103.2 million people in rural areas were living in extreme poverty, accounting for 11.6% of the rural population. By covid-year 2020-21, however, this number had nearly doubled to 200.7 million, or 21.9% of the rural population.
The pandemic severely affected the rural economy, which is largely dependent on agriculture and informal labour. Lockdowns, movement restrictions and supply-chain disruptions hit rural livelihoods hard, pushing millions into extreme poverty. Urban areas, while initially faring better, saw a similar pattern.
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