# _South Asia Region and encouraging recent achievements in India_

To achieve the global target of 3 percent by 2030, it is critical to improve the pace of poverty reduction in SAR. If all countries in SAR continued their pace of growth and poverty reduction between 2002 and 2010, SAR’s regional poverty rate would decline from 31 percent to 8.9 percent. This is a significant reduction, but the regional poverty rate is still nearly three times the global target of 3 percent. Furthermore, since SSA’s poverty rate is likely to be significantly higher than 3 percent, to achieve the global target, other regions need to achieve a poverty rate significantly below 3 percent. Given that the population share of SAR is projected to be high (around one-quarter), it is almost certain that the global poverty rate would be higher than 3 percent in 2030 unless SAR achieves a regional poverty rate below 3 percent.

According to Figure 6, all countries but India and Bangladesh will end extreme poverty if they can maintain the pace of poverty reduction between 2002 and 2010. In this sense, for these countries, their policy question is how to maintain the pace. But, for India and Bangladesh, they need to accelerate their performance in poverty reduction significantly; otherwise, it is almost certain that not only they but also SAR as a whole will fail to reach 3 percent.

**Table 7: Official poverty estimates in**

||**India (%)**||
|---|---|---|
||**Rural**|**Urban**|
|2004-05|41.8|25.7|
|2009-10|33.8|20.9|
|2011-12|25.7|13.7|

**_Source_** : Press Note on Poverty Estimates, 2011-12. Government of India, Planning Commission, July 2013.

However, encouraging news came from India’s latest official poverty estimates for 2011/12. According to the Planning Commission of the Government of India, both urban and rural poverty rates declined rapidly between 2009/10 and 2011/12 (see Table 7). More importantly, the pace of reduction is accelerated. In rural areas, the annual rate of poverty reduction between 2004/05 and 2011/12 was 6.7 percent. It increases to 12.8 percent if we focus on the last two years. In urban areas, the same observation holds—the annual rate of poverty reduction increases from 8.6 percent to 19 percent if we focus on the last two years. Based on these, we project the annual growth rate of the survey mean for the period 2004/05 to 2011/12 to be 3.2 percent, while that of the 2009/10 and 2011/12 period is 6 percent. It is likely that maintaining the growth rate of 6 percent is difficult because this high rate is the result of rapid recovery from one of the worst droughts in history in 2009/10. Yet, the inequality-adjusted growth rate of 3.2 percent is still more than one percentage point higher than the growth rate used in the benchmark scenario for India.

If India can grow at a rate of 3.2 percent after adjusting for inequality changes since 2010, then India’s poverty rate in 2030 would be as low as 2.5 percent, and the South Asia region’s poverty rate will decrease to 3.6 percent by 2030. If Bangladesh could also grow at a rate of 3.2 percent, then South Asia’s poverty rate would decline to 2.37 percent by 2030.

Accelerating the annual growth rates of India and Bangladesh to 3.2 percent enables the South Asia region to meet the 3 percent target, but it is still not likely enough to achieve the global target. For example, even if SSA countries could achieve the minimum annual growth rate of 4.06 percent and both India and Bangladesh could raise the annual growth rate to 3.2 percent, the global poverty rate would be 4 percent. Further, even if all countries in both SSA and SAR could achieve the annual growth rate of 4.06 percent, the global poverty rate would be 3.66 percent in 2030, which is still higher than 3 percent.

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