Projections for Poverty Elimination in India with Some Assumptions: Impact of Inequality †

ABSTRACT

The paper studies the relationship between poverty levels, per capita incomes and inequality by using a large sample of low and middle-income nations. The results, which indicate the requirement of a per capita income that is close to the one currently registered in Mexico for poverty removal, are used to predict the year of the "happy event" of poverty eradication in India. The tentative finding is that the portals to a better material life for the people of India may gradually open only in the early 2040. It is also observed that some countries like Azerbaijan and Kazakhstan have succeeded in poverty removal at low per capita income levels, which may be attributed to greater success in removing inequality and to praiseworthy performance in the realm of non-monetary indicators of poverty. The paper is, of course, based on some important rational assumptions such as absence of any other major shock such as Covid-19, and the continuous average increase in India's GDP by 8%. Therefore, this is an exercise in rationality with the absence of major external positive or negative shocks.