India's government claims that the number of people living below the poverty line has fallen by more than half since the mid-1990s. The Indian government sets its official poverty line at around 40 cents a day in rural areas and 50 cents a day in cities.
The McKinsey Global Institute argues that instead of using the "poverty line" as a gauge of extreme poverty, India should focus on what it would take to satisfy a person’s basic needs. McKinsey calls its new measure an “empowerment line”, the level where McKinsey argues India’s citizens will have the resources to get out of poverty. Tellingly, McKinsey set its empowerment line roughly 50% above the government poverty line.
The report is a wake up call for India's government since it places more than half of India's citizens below the empowerment line.
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