Extreme poverty in India falls to 2.6% from 27.1%: World Bank
As many as 496 million people moved above the lower-middle-income poverty line of $4.20 a day between 2011 and 2023, according to the World Bank’s October 2026 Poverty & Equity Brief.
New Delhi: The government’s sustained policy efforts are yielding tangible results, strengthening the foundations for inclusive growth and greater economic opportunity, Union finance minister Nirmala Sitharaman said on Friday, citing a World Bank report that showed a sharp reduction in India’s poverty levels between 2011 and 2023.As many as 496 million people moved above the lower-middle-income poverty line of $4.20 a day during this period, with the poverty rate declining to 16.1% from 57.7%, according to the World Bank’s October 2026 Poverty & Equity Brief.
This marks one of the fastest poverty declines in the world, the report said.Extreme poverty, measured at $3 a day, declined to 2.6% from 27.1% over the same period. Both monetary poverty thresholds use 2021 purchasing power parity.“Poverty is projected to continue declining, albeit more gradually, with the poverty rate at the $4.20/day line expected to fall from 14.2% in 2026 to 12.1% by 2028,” the report said.On the non-monetary dimensions, as measured by the Oxford Poverty and Human Development Initiative (OPHI) Multidimensional Poverty Index (MPI), the poverty level declined substantially to 16.4% in 2019-21 from 53.8% in 2005-06, with the World Bank MPI measure at 15.5% in 2022-23.
“This progress was mainly driven by strong consumption growth, rising employment, especially among women, and expanded social transfers, including food subsidies,” it said. “As poverty declined, it became increasingly concentrated among households with lower education, fewer assets, limited access to stable employment, and higher dependency ratios,” it added. Wage disparity The report, however, flags sharp wage disparities as well.
Median earnings among the top 10% of workers were about 13 times those of the bottom 10% in 2023, it said. “Spatially, India's poverty reduction story is one of both convergence and concentration,” it said. Households in both rural and urban areas witnessed substantial welfare gains, with faster progress in rural India significantly narrowing the rural-urban gap, it said. “Yet many of the households that remain poor continue to live in rural areas, where productivity is lower and access to higher-quality non-farm employment opportunities remain more limited.
Poverty has also become increasingly concentrated geographically,” it said.While living standards have improved across most states, households in a contiguous belt stretching from Uttar Pradesh to West Bengal account for about 57% of India’s poor.“As a result, further reductions in national poverty will increasingly depend on enabling productive employment in these states,” it said.Increase in employmentBetween 2017 and 2023, employment in India jumped by about 134 million people, nearly twice the growth of the working-age population.
Much of this gain is driven by rural women entering paid work and raising the number of earners per household, the report said.Labour market conditions continue to be broadly resilient, with labour force participation and employment rates stable between the first quarter of fiscal year 2025-26 (FY26) and that of FY27, it said.“However, youth unemployment rose from 14.6 to 15.9% between the two quarters, particularly among rural young women.
Moreover, real earnings remained broadly unchanged with employment growth concentrated in relatively low-productivity activities,” the report said. “We remain committed to building on this progress through productive employment, stronger household incomes and effective delivery of public services, so that aspirations of our people are met,” Sitharaman said in a post on microblogging site X. “This is the reason why the NDA government wins the people’s trust and mandate of our citizens,” she added.
