The number of poor people in India, as counted by the world, will soon change dramatically. The World Bank has revised the Purchasing Power Parity (PPP) index and the global poverty line is being revised, too. Put together, the two measures will substantially alter the statistical calculation of poor people in the country. In all likelihood, it will be much lower than the existing calculations of the Indian government as well as the World Bank.

The World Bank has set the global poverty line at $1.25 a day at present. But, this was calculated on the basis of the 2005 PPP index. By that measure, India had about 400 million poor people in 2010. The revision of the PPP index suggests the Indian economy is much bigger and the purchasing power much higher than estimated earlier. It also means that the number of poor people is much lower than estimated earlier. The bank is revising the poverty line to adjust it to the changed index but early calculations by economists suggest the number of poor people in India is set to dwindle, statistically speaking.

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