Reducing poverty in India: an alternative path found

^{Agriculture has been proven to reduce poverty. / Álvaro Bernis}
Economists have long believed that rapid industrialization is essential for reducing poverty. This involves the poor population finding jobs in factories, which is expected to improve their livelihoods. However, India's experience contradicts this view.

According to research conducted by economists Surjit Bhalla and Karan Basin, survey results from 2024-2025 show that in India, only 1 percent of the population lives below the international poverty line of $2.15 per day (in purchasing power parity). This is a sharp contrast to the situation in the 1990s, when nearly 50 percent of the population lived below the poverty line.

Interestingly, India has achieved this result despite 40 percent of its population still being employed in agriculture.

In comparison to industrialization in China, India has created conditions for its population to increase their income while remaining in rural areas, rather than drawing them into factories. This means that improvements in agriculture, increases in rural wages, and government support programs have lifted millions out of poverty.

Analysis conducted by researchers at the University of California, San Diego, shows that 37 percent of those who escaped poverty in China transitioned from agriculture to industry or services, while in India, this figure is only 10 percent. This indicates that economic development can be achieved while remaining in rural areas.

Moreover, economists emphasize the need to introduce new poverty criteria in India. Since the current international poverty line ($2.15) encompasses almost everyone, it will be difficult to accurately assess future development. Therefore, researchers propose defining a new poverty line that covers the bottom 25-30 percent of the population based on income.

Because regardless of how much income increases, many still face financial instability. For example, medical expenses, education costs, or housing purchase expenses are burdensome for many.

India's experience shows that there is no single correct path to economic development. While industrialization and migration have been seen as the main means until now, it has become clear that economic growth in rural areas can also be effective. Millions of people in India have managed to escape poverty while remaining in rural areas.

This can serve as a significant lesson for other developing countries. It is being confirmed that in the fight against poverty, it is important not only to build factories but also to use existing resources effectively, develop rural infrastructure, and modernize agriculture.