India’s extreme poverty rate fell from 27.1% in 2011 to 2.6% in 2023, with an estimated 496 million people moving out of poverty, the World Bank’s October 2026 Poverty and Equity Brief says. At the lower-middle-income poverty line of USD 4.20 a day (2021 purchasing power parity), the rate dropped from 57.7% to 16.1%. The Bank described the decline as one of the world’s fastest, with progress in monetary and non-monetary poverty.
Poverty measures and projections
The World Bank attributed the decline mainly to consumption growth, rising employment—particularly among women—and expanded social transfers, including food subsidies. Its indicative microsimulation estimates put poverty at the USD 4.20 threshold at 14.2% in 2026 and 12.1% by 2028; these could change as labour-market and economic data are updated.
The Oxford Poverty and Human Development Initiative’s Multidimensional Poverty Index recorded a fall from 53.8% in 2005–06 to 16.4% in 2019–21. The World Bank’s own multidimensional measure was 15.5% in 2022–23.
Regional and employment challenges
Around 57% of India’s poor population is concentrated in a contiguous belt from Uttar Pradesh to West Bengal. Employment grew by about 134 million between 2017 and 2023, nearly twice the increase in the working-age population; much of the rise came from rural women entering paid work. Youth unemployment increased from 14.6% to 15.9% between Q1 FY26 and Q1 FY27, particularly among rural young women. Real earnings remained broadly unchanged as employment growth centred on low-productivity activities. Estimates draw on household consumption surveys; the Bank cautioned that recent gains may reflect better measurement as well as welfare improvements.
Important Facts for Exams
- Absolute poverty line: Absolute poverty uses a standard intended to remain consistent over time and between countries, supporting comparisons across places and periods.
- Purchasing-power adjustment: A dollar-denominated poverty threshold is translated into local currency using purchasing-power parity, based on the goods a dollar can buy.
- Deprivation counting: The Alkire-Foster method identifies multidimensional poverty by counting different deprivations experienced at the same time, including poor health or living standards.
- Global MPI dimensions: The Global Multidimensional Poverty Index organises its indicators across health, education and standard of living.
