How China beat extreme poverty; and what lessons it holds for India

Last Updated12/10/2022

According to the latest World Bank report on global poverty, India has the most number of poor people.
It found that the number of Indians living in extreme poverty- surviving on less than Rs 46 a day increased by 56 million(5.6 crore) in 2020.
India can therefore take lessons from China which has managed to take out its population from the menace of extreme poverty in so less time.

China suffered from very high rates of extreme poverty, higher than India until the mid-1970s.
In a separate study, the World Bank found that between 1978 and 2018, China's poverty headcount dropped from 770 million to 5.5 million people.
On average, for 40 years on the trot, every year China pulled 19 million people out of extreme poverty.
2021 - China declared that it has eradicated extreme poverty according to the national poverty threshold.
Improvements in health, education, and incomeover the four decades are reflected in China's rising position in the Human Development Index from 106 (out of 144 countries) in 1990 to 85 (out of 189 countries) in 2019.

Rapid economic growth
Reforms began in the agricultural sector.
Poor people could benefit directly from improvements in productivity & introduction of market incentives.
Development of low-skilled, labour intensive industries
Provided a source of employment for workers released from agriculture.
Urbanisation
Helped migrants take advantage of the new opportunities in the cities.
Migrant transfers boosted incomes of their relatives remaining in the villages
Public investment in infrastructure
Improved living conditions in rural areas & also connected them with urban and export markets.
Incremental reforms
Helped businesses and the population adjust to the pace of change.
Government policies to alleviate poverty
Targeted areas disadvantaged by geography and a lack of economic opportunities.
Ensured social protection policies for poor households.
Decentralised implementation arrangements with significant scope for local experimentation
Favourable Conditions at the time of opening up
Relatively high level of human capital endowments.
Massive investment in education and expansion of health care.