Recent estimates of poverty in developing world by the World Bank have led to an upward revision of the estimate of poor in the world by 400 million. These adjustments are made on the basis of the revision in PPP estimates as part of the ICP exercise. Using the same ICP exercise, the ADB claims even higher estimate of poor for Asia than the World Bank. A proper examination of the underlying database and the methodology for estimating poverty across countries suggests that even though these estimates are better than the previous such estimates, the assumptions behind these adjustments and the quality of data obtained from the ICP limit the usefulness of such exercise for cross-country poverty comparisons. For India, both these estimates suggest severe under-estimation in the official estimates of poverty by the official methodology.
 
January 5, 2009.