The World Bank’s India Development Update has brought India’s poverty record back into debate. The share of India’s population living below the international extreme poverty line of $3 per day (2021 PPP) fell from 27.1 per cent in 2011-12 to 2.6 per cent in 2023-24. At the lower-middle-income poverty line of $4.20 per day (2021 PPP), it declined from 57.7 per cent to 16.1 per cent. These are significant gains. But there is another question worth asking: Have the families who moved above the poverty line also become financially secure?The comparison, however, calls for some caution. The 2011–12 NSS and the 2023–24 HCES, on which the claim of poverty reduction in India is based, differ in survey design and data collection methods. This does not mean that the World Bank’s estimates should be dismissed. Rather, they should be read alongside other evidence that helps us understand how Indian households are actually faring.AdvertisementThe improvement in basic living conditions is hard to ignore. NFHS data show that the share of the population living in households with electricity rose from 67.9 per cent in 2005-06 to 98.3 per cent in 2023-24. Access to improved sanitation increased from 47.6 per cent to 89 per cent. Household use of clean cooking fuel rose from 28.5 per cent to 71.6 per cent. Access to a bank or post office account increased from 40.2 per cent to 98.2 per cent. For millions of families, these changes have made everyday life considerably better. They represent important gains in living standards, even though access to these facilities alone cannot tell us whether a household can withstand a sudden loss of income.Women have gained greater access to digital and financial services as well. Between NFHS-5 and NFHS-6, the share of women aged 15-49 who had ever used the internet rose from 33.3 per cent to 64.3 per cent. The proportion with a bank or savings account that women aged 15-49 themselves used increased from 78.6 per cent to 89 per cent. This is encouraging, although having a bank account does not necessarily mean having independent control over the money in it.Also Read | Three air purifiers, one AQI monitor and no peace of mindConsumption data offers further evidence of improvement. In 2023-24, average monthly per capita consumption expenditure stood at Rs 4,122 in rural India and Rs 6,996 in urban India, excluding the imputed value of free welfare items. The consumption Gini also declined between 2022-23 and 2023-24, from 0.266 to 0.237 in rural areas and from 0.314 to 0.284 in urban areas. This points to a more equal distribution of consumption. But it does not tell us whether income inequality has fallen to the same extent or whether families have enough savings to manage an unexpected expense.AdvertisementHousehold finances provide another perspective on the poverty-reduction debate. NABARD’s All India Rural Financial Inclusion Survey found that average monthly rural household income rose from Rs 8,059 in 2016-17 to Rs 12,698 in 2021-22, a nominal increase of 57.6 per cent. The share of households reporting savings increased from 50.6 per cent to 66 per cent. At the same time, the proportion reporting outstanding debt rose from 47.4 per cent to 52 per cent. These income figures are not adjusted for inflation and borrowing does not necessarily indicate financial distress; loans may finance productive activities. The important question is whether rising incomes are translating into greater capacity to save, repay debt and cope with unexpected expenses.Agriculture illustrates the challenge. The latest official Situation Assessment Survey puts average monthly agricultural household income at Rs 10,218 in 2018-19, against Rs 6,426 in 2012-13. These are nominal figures. Wages and salaries contributed 39.8 per cent of agricultural household income in 2018-19, compared with 37.2 per cent from crop cultivation and 15.5 per cent from animal farming. A study found that after adjusting for inflation, income from crop cultivation fell by 10.4 per cent between the two survey rounds. The changing composition of agricultural household income, particularly the growing contribution of wages and salaries and animal farming, reflects both income diversification and the difficulty of depending on cultivation alone.you may likeEmployment trends also qualify the poverty-reduction story. Although the share of casual labourers fell from 29.9 per cent in 2011-12 to 19.8 per cent in 2023-24, regular wage employment, after rising to 22.8 per cent in 2017-18, declined to 21.7 per cent. Meanwhile, self-employment increased to 58.4 per cent. This shift does not necessarily indicate distress, since self-employment includes both successful enterprises and unpaid family work. It does, however, raise an important question: has the decline in poverty been accompanied by a comparable improvement in the stability of household earnings?Healthcare costs also matter when assessing how secure households have become after poverty reduction. The government’s share in total health expenditure rose from 28.6 per cent in 2013-14 to 43.7 per cent in 2022-23. Meanwhile, the share paid directly by households fell from 64.2 per cent to 43.4 per cent. This is significant progress, but households still bear a substantial share of healthcare costs. For a family with limited savings, a serious illness can quickly lead to debt or force cuts in essential spending.Overall, a closer examination confirms that India’s reduction in poverty is an important achievement, but the debate should go beyond how many people have crossed the poverty line. It should also ask whether they can remain above the poverty line without depending on transfers and subsidies and whether they have stable earnings, adequate savings, and access to affordable healthcare. The real measure of lasting poverty reduction is not simply how many people move above the poverty line, but how many can remain there when circumstances turn against them.The writer teaches at Patna University