of 1 is 8.84 percent.<sup>33</sup> The latter estimate translates to 118 million living under extreme poverty in India in 2017, while the 0.67 pass-through yields 139 million people living under extreme poverty. The confidence band around the 0.67 pass-through suggests that between 134 million and 145 million live in poverty in the nation. Using the 0.67 pass-through, the rural poverty rate is estimated to be 12.02 percent (with a 95 percent confidence interval between [11.52, 12.44]) and the urban poverty rate is estimated to be 7.17 percent (with a 95 percent confidence interval between [6.92, 7.55]).<sup>34</sup> In rows 2 and 3 of Table 5, we report estimates derived by reducing the official HFCE growth rate by 1.1 and 2.5 percentage points respectively, using the estimates provided by A. Subramanian (2019). The 0.67 pass-through rate yields a national poverty rate between 10.97 percent and 11.75 percent (or between 147 million and 157 million people) depending on the growth adjustment used. If we allow for the uncertainty around the pass-through rate, the national poverty rate could be as high as 12.09 percent, which would imply 162 million living under extreme poverty in 2017. Similarly, the rural poverty rate could be between 13.04 percent and 13.93 percent (which implies between 116 million and 124 million poor) and the urban poverty rate could be between 8.03 percent and 8.47 percent (which implies between 36 million and 37 million poor).

Since the annual per capita GDP growth rates are similar to the annual per capita HFCE growth rates, the poverty rates derived using these two growth rates are fairly similar. The set of estimates employing the growth in per capita GDP are reported in panel B of Table 5.

Figure 5 presents the trends in national poverty for the years 2012 to 2018. These trends are reported for two series presented in Table 5– namely, (a) the trend using official per capita HFCE growth with the 0.67 pass-through rate and the 95 percent confidence interval (see row 1 of Table 2, panel A); and (b) the trend applying a downward adjustment of 2.5 percentage points to the per capita HFCE growth rate with a 0.67 pass-through rate. As highlighted in the figure, the changes in growth rates matter for the poverty rates. A downward adjustment of 2.5 percentage points of growth rates increases the national poverty rate by 1.4 percentage points, which translates to 18 million more people pushed into extreme poverty.

# **5. Summary and Conclusion**

This paper is an attempt to provide up-to-date information on poverty in India in the absence of regular data from the Consumption Expenditure Survey (CES). Most of the alternative data sources

> 33 Note that the 95% confidence interval is symmetric around the pass-through rate. However, when the pass-through rate and its 95% interval is mapped into the poverty rates, the confidence band around the poverty estimates are not symmetric. This is because the poverty estimates depend on the density around the poverty line.

> 34 Using the South Asia consumption-specific pass-through rate of 0.652 Table A.5 with a 95% confidence interval of [0.307, 0.998] yields a national poverty rate of 10.49 percent (with 95% confidence interval between [8.84, 12.43]), a rural poverty rate of 12.13 percent (with 95% confidence interval between [10.21, 14.28]), and an urban poverty rate of 7.23 percent (with 95% confidence interval between [6.13, 8.77]).

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