New Delhi: India has made significant progress in reducing extreme poverty over the past decade, with the poverty rate declining from 27.1 per cent in 2011 to 2.6 per cent in 2023, according to the World Bank’s latest report. The report described the decline as one of the fastest reductions in poverty recorded globally.
The findings highlight improvements in both monetary and non-monetary measures of poverty. The share of India’s population living below the lower-middle-income poverty line also dropped sharply, from 57.7 per cent to 16.1 per cent.
World Bank projections suggest that the poverty rate could decline further, from 14.2 per cent in 2026 to 12.1 per cent by 2028.
Free food schemes and employment growth contribute to decline
The report attributed India’s progress to several factors, including free and subsidised food distribution programmes, stronger consumption growth and rising employment, particularly among women.
Government food assistance initiatives have played a significant role in reducing poverty, especially by narrowing the gap between rural and urban areas.
Multidimensional poverty also declines
India has also recorded a substantial reduction in non-monetary poverty. According to the Multidimensional Poverty Index developed by the Oxford Poverty and Human Development Initiative, the poverty rate fell from 53.8 per cent in 2005-06 to 16.4 per cent in 2019-21.
However, poverty remains concentrated in certain regions. Around 57 per cent of India’s poor population lives in the belt stretching from Uttar Pradesh to West Bengal, the report noted.
Youth unemployment remains a concern
Despite the improvement in employment levels between 2017 and 2023, youth unemployment continues to pose a challenge. The rate increased from 14.6 per cent to 15.9 per cent between the first quarters of FY26 and FY27, with rural young women particularly affected.
171 million people move above the extreme poverty line
The World Bank’s Poverty and Shared Prosperity Brief also highlighted a significant decline in the number of people living below the extreme poverty line of $2.15 a day.
According to this measure, extreme poverty fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23. This means approximately 171 million people moved above the poverty threshold during the period.
Rural extreme poverty declined from 18.4 per cent to 2.8 per cent, while the urban rate fell from 10.7 per cent to 1.1 per cent.
The rural-urban poverty gap narrowed from 7.7 percentage points to 1.7 percentage points, reflecting a substantial reduction in the disparity between the two regions.
