New Delhi: India has recorded a significant decline in extreme poverty over the past 12 years, with the proportion of people living in extreme poverty falling from 27.1 per cent in 2011 to 2.6 per cent in 2023, according to the World Bank’s October 2026 Poverty and Equity Brief.
The report estimates that approximately 496 million people moved out of extreme poverty during the period, highlighting substantial improvements in household consumption and living standards. The World Bank described the progress as among the fastest poverty reductions globally, noting improvements in both monetary and non-monetary indicators of deprivation.
The proportion of Indians living below the lower-middle-income poverty threshold of $4.20 per day, measured using 2021 purchasing power parity (PPP), also declined sharply from 57.7 per cent to 16.1 per cent between 2011 and 2023.
According to the report, the reduction in poverty was primarily driven by robust consumption growth, rising employment, increased participation of women in paid work and expanded social assistance, including food support programmes.
Poverty Expected to Decline Further
The World Bank expects poverty levels to fall further in the coming years, although at a slower pace. Its estimates suggest that the poverty rate at the $4.20-a-day threshold could decline from 14.2 per cent in 2026 to 12.1 per cent by 2028.
However, the report cautioned that these projections are indicative estimates based on microsimulations and may change as updated labour market and macroeconomic data become available.
The report also highlighted substantial progress in multidimensional poverty, which measures deprivation beyond income, including access to education, healthcare and basic living standards.
According to the Oxford Poverty and Human Development Initiative’s Multidimensional Poverty Index, India’s multidimensional poverty rate fell from 53.8 per cent in 2005-06 to 16.4 per cent in 2019-21. The World Bank’s own multidimensional poverty measure stood at 15.5 per cent in 2022-23.
Regional Disparities Remain a Challenge
Despite the overall improvement, poverty remains concentrated in certain parts of the country. The report noted that approximately 57 per cent of India’s poor population lives in a contiguous region stretching from Uttar Pradesh to West Bengal.
The findings underline the need to expand productive employment opportunities, improve incomes and strengthen economic opportunities in these states to sustain poverty reduction.
Employment increased by approximately 134 million people between 2017 and 2023, nearly twice the growth in the working-age population during the period. The expansion was partly driven by rural women entering paid employment, according to the report.
However, the World Bank also highlighted concerns over the quality of employment and the persistence of labour market challenges.
Youth Unemployment and Stagnant Wages Raise Concerns
The report pointed to an increase in youth unemployment, which rose from 14.6 per cent in the first quarter of FY26 to 15.9 per cent in the first quarter of FY27. Young women in rural areas were among the groups facing particular difficulties.
Real wages have also remained largely stagnant, while much of the employment growth has been concentrated in relatively low-productivity sectors. These trends could constrain improvements in household incomes despite the overall expansion in employment.
The World Bank further cautioned that poverty estimates are based on household consumption surveys and that improvements in measurement methods may account for part of the reported gains alongside genuine improvements in welfare.
The findings present a mixed picture of India’s development: a substantial reduction in extreme poverty and multidimensional deprivation, alongside continuing challenges related to regional inequality, job quality, youth employment and wage growth. Sustaining the progress will depend on creating more productive jobs and ensuring that economic gains translate into higher and more secure household incomes.
