McKinsey: From poverty to empowerment MGI INDIA 

Check out a real Mckinsey presentation on poverty in India.

McKinsey Presentation: From poverty to empowerment MGI INDIA

Key Learnings from the Presentation

McKinsey’s presentation “From Poverty to Empowerment MGI INDIA,” delivered in March 2014, emphasizes the necessity of comprehensive measures beyond the official poverty line to address India’s progress and challenges, advocating for inclusive reforms such as job creation, enhanced basic services, and increased productivity to alleviate poverty and promote equitable economic growth.

India’s Progress and Challenges

• India has made significant strides in reducing its official poverty rate, halving it from 45% in 1994 to 22% in 2012. However, this official poverty line only captures the most abject conditions.
• The Empowerment Line, a more comprehensive benchmark, considers eight basic needs (food, energy, housing, drinking water, sanitation, health care, education, and social security) required for a decent standard of living.
• Shockingly, in 2012, 56% of the population lacked the means to meet these essential needs, affecting 680 million Indians—more than 2.5 times the population below the official poverty line.
• The Empowerment Gap, which represents the additional consumption needed to bring these 680 million people to the Empowerment Line, is seven times higher than the cost of eliminating poverty as defined by the government.

Beyond Consumption: Access to Services

• While individual consumption matters, access to basic services is equally crucial. Households need community-level services like health clinics and schools, as well as in-home amenities like electricity, drinking water, and sanitation.
• On average, Indian households lack access to 46% of the basic services they need.
• Geographic disparities exist, highlighting the need for improved social infrastructure.

Inclusive Reforms for Empowerment

• Job creation and productivity gains historically drive improved living standards. India must focus on deep reforms to encourage businesses to invest, scale up, and hire.
• MGI proposes an ambitious yet economically sound path:
  • Accelerate job creation to lift millions out of poverty.
  • Improve basic services to enhance quality of life.
  • Enhance agricultural productivity to benefit rural communities.
  • Boost manufacturing and services to create employment opportunities.

The Road Ahead

• India’s economy has slowed, but there’s hope. If reforms are implemented, 580 million people could rise above the Empowerment Line by 2022, while extreme poverty could be virtually eradicated.
• The challenge lies in ensuring that economic growth benefits all segments of society.

About McKinsey

McKinsey & Company stands as a premier entity in the global management consulting sphere, initiated by James O. McKinsey in 1926. Anchored in New York City, this firm has carved a distinguished position in the consulting arena, offering strategic guidance across the globe to a diverse clientele that includes businesses, governments, and various institutions.

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