 "17 cr lifted above poverty, new jobs in India outpace working-age population: World Bank")
In a significant economic milestone, India has lifted 17.1 crore people out of extreme poverty over the past decade, while employment growth has outpaced the rise in the working-age population since 2021–22.
According to a new World Bank report titled India Poverty and Equity Brief, the sharp decline in extreme poverty (living on less than $2.15 per day) — from 16.2% in 2011–12 to just 2.3% in 2022–23 — marks a major shift in living standards.
Rural extreme poverty dropped from 18.4% to 2.8%, and urban rates fell from 10.7% to 1.1%, effectively narrowing the rural-urban gap from 7.7 to 1.7 percentage points — a 16% annual decline.
India also transitioned into the lower-middle-income category. Using the $3.65 per day LMIC poverty line, poverty fell from 61.8% to 28.1%, lifting 378 million people out of poverty. Rural poverty dropped from 69% to 32.5%, and urban poverty from 43.5% to 17.2%, reducing the rural-urban gap from 25 to 15 percentage points with a 7% annual decline, added the report.
India’s five most populous states — Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh — were home to 65% of the country’s extreme poor in 2011–12. By 2022–23, they played a significant role in poverty reduction, accounting for nearly two-thirds of the nationwide decline in extreme poverty.
Impact Shorts
More ShortsAccording to the report, despite this progress, these states continued to house 54% of India’s extreme poor as of 2022–23 and 51% of the multidimensionally poor between 2019 and 2021. On a broader scale, non-monetary poverty, measured by the Multidimensional Poverty Index (MPI), fell sharply from 53.8% in 2005–06 to 16.4% by 2019–21.
India’s consumption-based Gini index improved from 28.8 in 2011–12 to 25.5 in 2022–23, although this may understate actual inequality due to data limitations.
In contrast, the World Inequality Database indicates a rise in income inequality, with the Gini coefficient increasing from 52 in 2004 to 62 in 2023. Wage disparities also remain stark — by 2023–24, the top 10% earned 13 times more than the bottom 10%, according to the report.
Poverty estimates are expected to shift with the adoption of revised international poverty lines and updated 2021 purchasing power parities (PPPs). Using a new extreme poverty line of $3.00 per day and a lower-middle-income threshold of $4.20 per day, poverty rates for 2022–23 would be revised to 5.3% and 23.9%, respectively, added the report.
With inputs from agencies
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