Rural poverty ratio drops below 5% for the first time in FY24: SBI report

Poverty declined faster in rural areas during FY24 as the poverty ratio dipped below 5 per cent for the first time, reaching 4.86 per cent from 7.2 per cent in FY23,

By Connect Gujarat Desk 03 Jan 2025 in Business

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Rural poverty ratio drops below 5% for the first time in FY24: SBI report

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Poverty declined faster in rural areas during FY24 as the poverty ratio dipped below 5 per cent for the first time, reaching 4.86 per cent from 7.2 per cent in FY23, according to a study by SBI Research released on Friday.

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In comparison, the poverty ratio in urban areas fell to 4.09 per cent from 4.6 per cent during the same period.

The report notes that this decline in the rural poverty ratio is due to higher consumption growth in the 0-5 per cent decile, leading to a shift in the poverty line from the 5-10 per cent decile in FY23 to the 0-5 per cent decile in FY24.

Further, the report also notes that another reason for the declining rural-urban gap was the rise in government scheme transfers, such as Direct Benefit Transfer (DBT).

Adjusting for decadal inflation and the imputation factor in the poverty line fixed by Professor Suresh Tendulkar, the SBI report estimated the new poverty line for FY24 at Rs 1,632 for rural areas and Rs 1,944 for urban areas.