Dr Saheb Sahu
The 189 member states of the United Nations set a target to bring the share of the people living on less than $1.25 a day (definition of extreme poverty) to half its 1990 level by 2015. Surprisingly, given the size of the task, it was met and then some: 1.2 billion people from around the world, escaped extreme poverty in those 25 years, bringing the global poverty rate down from 43% to 13%. A booming China accounted for two-third of the decline; India and Indonesia did much of the rest.
Since 2015 the rate of poverty reduction has slowed sharply, to quarter of its previous pace. Roughly one in ten of the world’s population, or 830 million are still destitute today. The no is one in six in India (about 234 million).
One problem is no one knows exactly who is below the poverty line and by how much. One solution would be a universal basic income (UBI) meaning payment to everyone, no matter how much they earn. Applied to the poor world at the level of $2.15 (new definition of extreme poverty) per day, this would cost 2-3% of global GDP (gross domestic products) each year. Most of the 130 countries with cash-transfer programmes rely on “proxy- mean tests”, using crude indicators. But the programmes are flawed.
Ending extreme poverty therefore comes down to identifying who needs what. A recent paper by Roshni Sahoo of Stanford University and co-authors proposes a newer way to do so. Using data from 23 countries, they simulated a setting with limited information and asked how cash transfer should be allocated to drive poverty as low as possible. Rather than trying to predict who is poor, their method uses a machine-learning algorithm to assign cash-transfer amounts-different for each person-so as to minimize the chance that anyone remains in poverty after receiving the transfer. In other words, it targets the poverty gap, and not the poverty line. In principle, this means giving poor people enough cash to push them over the poverty line. For example- if someone earns $2 a day and the poverty threshold is $3 a day, they will receive $1 more per day in cash-transfer and not $3 a day.
The result is surprisingly a small bill. The paper’s estimates suggest it would cost $318 billion dollars a year to reduce global poverty rate to 1% at the rate of $2.15- a day line (present definition of extreme poverty) – roughly 0.3% of global GDP. That is less than a third of what the world spends on alcohol. (The Economist)
Indian Context
According to the World Bank’s estimates (2025 data), the extreme poverty rate in India is 5.3%. This is the first time that India’s poverty rate is lower than the global average of 10.8%. Bangladesh’s poverty rate is 5.9%, similar to India. China and Vietnam are reported to have eliminated extreme poverty.
However, Multidimensional Poverty Index (MPI) shows that roughly 11.28% of Indians are considered poor. The Global MPI goes beyond income to identify how people experience poverty. It measures ten criteria of deprivation, in health, education and living standard. Based on MPI the poverty rate of Kerala is 0.48%.
Odisha Context
MPI in 2023, for Kerala was 0.48%, Tamil Nadu 1.43%, West Bengal 8.6%, Odisha 11.07%, UP 17.4% and Bihar 26.59%.
The problem with Odisha’s poverty statistic is its wide diversity. The district of Puri has a poverty rate of 3.29%, Nabarangpur 68.7%, and Rayagada 48%. The Coastal districts are doing relatively well but the multidimensional poverty indices for the rest of Odisha are totally unacceptable, especially for the tribal districts.
What should government of Odisha do to reduce its poverty rate to below 1%?
The GDP of Odisha for 2025-26, is estimated to be 210, 186 crores rupees, an increase of 8.8% over 2024-25. The projected budget surplus is 3.0% of the GDP. Based on the recent published study of Roshni Sahoo and her colleagues of Stanford University, it will take 0.3% of Odisha’s GDP to eliminate extreme poverty. The government of Odisha has projected budget surplus of 3% for 2026. The government of Odisha’s developmental officials should read her published paper and convince the government to allocate at least 1% of Odisha’s GDP to a cash-transfer program for the poor, irrespective of their caste, religion, sex and place of residence. The Government should utilize the current method of Direct Benefit Transfer (DBT) and continue it for next few years until Odisha’s poverty rate falls below 1%.
Conclusion
It is absolutely possible to eliminate extreme poverty in Odisha. The state of Kerala close to Odisha’s population, with minimal industries or minerals has done it. It is not a question of money. The money is there. It is a question of will. I am hoping, the present government will have the WILL!! I will conclude with a brief quote from a man from Kenya talking to a reporter:
“Don’t ask me what poverty is because you have met it outside my house. Look at the house and count the number of holes. Look at my utensils and the clothes I am wearing. Look at everything and write what you see. What you see is poverty”
-A poor man, Kenya, 1997
References
1- What it would cost to end extreme poverty? The Economist, April 11, 2026, p-67
2-Roshni Sahoo ET all- What it would cost to end extreme poverty. The National Bureau of Economic Research (NBER). Www. nber.org
3-NITI Aayog National Multidimensional Poverty Index (MPI) Progress Review 2023.
PS- Dr Saheb Sahu is a farmer son and a village boy from district Bargarh, Odisha. He is a graduate of AIIMS (New Delhi). He has been settled in US since 1970. He was an expert member of WODC for six yearsand a promotor and MD of Kalinga Hospital, Bhubaneswar, for 4 years. He has visited most of the districts in Odisha. He has been writing about Odisha’s poverty since 2002. His last book “What Can Be Done for Odisha’s Abject Poverty” was published in 2009. His other writings about education, health and fitness, poverty, religion, and reading of books, can be found in Odishawatch.in
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