India has recorded a substantial reduction in extreme poverty over the past decade, even as the World Bank increased the global poverty benchmark to $3 per day based on 2021 purchasing power parity (PPP).&nbsp;
According to the latest data, the proportion of people in India living in extreme poverty has dropped from 27.1 per cent in 2011-12 to 5.3 per cent in 2022-23.
The updated global poverty line, raised from $2.15 per day (2017 PPP) to $3 per day (2021 PPP), has led to an increase of 125 million people globally being classified as extremely poor.&nbsp;
However, revised figures for India, based on refined data collection and updated survey methods, offset this global surge significantly. The Press Information Bureau (PIB) stated, &ldquo;While the change led to a global increase in the count of extreme poverty by 125 million, India emerged as a statistical outlier in a positive direction.&rdquo;
The World Bank noted that the revised $3 poverty line, when adjusted for India&rsquo;s inflation between 2017 and 2021, stands 15 per cent higher than the previous $2.15 threshold in 2021 prices. Despite the more stringent criteria, the number of Indians living below this updated line dropped from 340 million in 2011-12 to 75 million in 2022-23.
A World Bank report indicated that 54,695,832 individuals in India were living on less than $3 per day in 2024, representing 5.44 per cent of the population. Under the older $2.15 line, extreme poverty in India declined from 16.2 per cent in 2011-12 to 2.3 per cent by 2022-23. The lower middle-income poverty rate also fell sharply, declining by 33.7 percentage points during the same period.
In an earlier assessment released in April, the World Bank reported that 171 million people were lifted out of extreme poverty in India between 2011-12 and 2022-23. The report observed, &ldquo;Over the past decade, India has significantly reduced poverty. Extreme poverty (living on less than $2.15 per day) fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23, lifting 171 million people above this line.&rdquo;
The breakdown of rural and urban data shows that extreme poverty in rural areas fell from 18.4 per cent to 2.8 per cent, while urban poverty declined from 10.7 per cent to 1.1 per cent.&nbsp;
This shift narrowed the rural-urban poverty gap from 7.7 percentage points to 1.7.&nbsp;
Free and subsidised food schemes played a crucial role in these improvements, and five of India&rsquo;s most populous states accounted for 54 per cent of the country&rsquo;s extremely poor population.
In terms of economic trends, the report revealed that India&rsquo;s real GDP in financial year 2024-25 remained approximately 5 per cent below pre-pandemic projections. Nevertheless, it anticipated that growth would return to its long-term potential by 2027-28, assuming global disruptions ease steadily.&nbsp;
The outlook remains vulnerable, with the report cautioning, &ldquo;The outlook, however, is subject to significant downside risks, as policy shifts may continue to unfold globally. Elevated trade tensions would dampen demand for India&rsquo;s exports and further delay the recovery in investment.&rdquo;
India&rsquo;s current account deficit is forecast to average around 1.2 per cent of GDP between FY26 and FY28. Capital inflows are expected to cover the shortfall, and foreign exchange reserves are projected to remain stable at around 16 per cent of GDP.
&nbsp;
(With inputs from agencies)

With new $3/day benchmark, India still shows sharp decline in extreme poverty levels.

Extreme Poverty in India Down to 5.3%: World Bank

With new $3/day benchmark, India still shows sharp decline in extreme poverty levels.

June 8, 2025 | 11:28 IST