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According to the latest World Bank estimates, India’s extreme poverty has sharply declined from 27.1% in 2011-12 to 5.3% in 2022-23, based on an updated $3/day consumption threshold adjusted for 2021 purchasing power parity (PPP). In absolute terms, the number of extremely poor people has reduced from 344.47 million to 75.24 million, indicating 269 million people were lifted out of extreme poverty during this period.

The progress is more striking when viewed under the previous poverty line of $2.15/day (2017 prices). Under this standard, the extreme poverty rate fell from 16.2% to 2.3%, translating to a drop in the number of poor from 205.93 million to 33.66 million—a reduction of 172 million individuals.

Even as the poverty threshold was raised globally, India managed to outperform most developing countries. The lower-middle-income (LMIC) poverty rate, measured at a higher threshold of $4.20/day, also fell substantially—from 57.7% in 2011-12 to 23.9% in 2022-23. This decline reduced the number of people under LMIC poverty from 732.48 million to 342.32 million over 11 years.

The fall in poverty occurred despite high inflation during the decade. When adjusted for domestic inflation, even the $3/day threshold (new benchmark) is higher than the inflation-adjusted $2.60/day from previous estimates, making the achievement more credible.

The World Bank estimates also reveal stark differences in poverty distribution:

• The top five populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—accounted for 65% of extreme poverty in 2011-12, but still made up 54% in 2022-23.
• Rural India still shows significant poverty, with 90% of rural individuals reporting average monthly per capita expenditures below Rs 5,763, and the bottom 5% class spending just Rs 1,677.
• Urban poverty is relatively lower, with 25.78% in the bottom 40%, compared to 45.44% in rural areas.
• Educational attainment remains a strong poverty determinant; in 2022-23, 35.1% of Indians without schooling lived below the LMIC poverty line, compared to 14.9% with post-secondary education.

In terms of non-monetary deprivation, India also recorded improvement. As per the Multidimensional Poverty Index (MPI), which considers factors such as access to education, electricity, water, and sanitation, multidimensional poverty fell from 53.8% in 2005-06 to 15.5% in 2022-23. NITI Aayog estimates it to be 11.28%, down from 29.17% in 2013-14.

To ensure continued tracking, NITI Aayog is planning a new income-based extreme poverty measure with broader consultation. Meanwhile, the Household Consumption Expenditure Survey (HCES) 2023-24 indicates a 45.4% rise in rural consumption and 38% in urban consumption, reinforcing the World Bank’s findings.

Conclusion

India’s remarkable poverty reduction over the last decade reflects successful economic reforms, social welfare schemes, and increased consumption. However, regional, educational, and rural-urban disparities persist, necessitating continued policy focus, data refinement, and inclusive growth strategies.