Describe Poverty Trends in India Since 1973

• In the year 1973-74, a massive 55% of India's total population was living below the poverty line.
• During this era, the Indian economy grew very slowly (often called the Hindu rate of growth, around 3.5%). Therefore, while the percentage of poor dropped slightly to 45% by 1993, the absolute number of poor people remained stuck at around 320 million due to a booming population.

• In 1991, India opened its markets (Liberalization). The economic growth rate shot up from 3% to over 7%.
• This rapid growth directly impacted poverty. By the year 2011-12, the poverty ratio had drastically fallen to just 22%.
• During this period, the absolute number of poor people finally began to drop significantly, falling from 407 million (in 2004) to about 270 million (in 2011).

• Poverty in India has always been primarily a rural problem.
• In 1973, rural poverty was at 56%, while urban poverty was 49%.
• However, the decline in urban poverty has been much faster due to the creation of factory and service sector jobs. Rural poverty declines slower because Indian agriculture remains heavily dependent on uncertain monsoons.

The trend since 1973 clearly proves that high economic growth combined with targeted government welfare schemes (like MGNREGA for rural employment and the Public Distribution System for free rations) are effectively destroying poverty. Recent estimates suggest India's extreme poverty is now in the single digits.