World Bank lauds India’s success in lifting 17 crore people out of poverty, says employment growth outpacing population

In a massive achievement, the World Bank has lauded India for its success in lifting 17 crore or 171 million people out of extreme poverty. The World Bank noted that India has not only pulled out crores of people from extreme poverty, but its employment growth has also outpaced the working-age population.

The World Bank, in its report Poverty and Equity Brief for India, released in April 2025, revealed that Extreme poverty (living on less than USD 2.15 per day) fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23.

This decline was especially pronounced in rural areas, where the extreme poverty line slumped from 18.4 percent to 2.8 percent. Meanwhile, in urban areas, the extreme poverty line dropped from 10.7 percent to a remarkable 1.1 percent. With this, the gap between rural-urban extreme poverty line registered a 16 percent annual decline, from 7.7 to 1.7 percent.

“Rural extreme poverty dropped from 18.4 percent to 2.8 percent, and urban from 10.7 percent to 1.1 percent, narrowing the rural-urban gap from 7.7 to 1.7 percentage points–a 16 percent annual decline,” the World Bank report says.

Interestingly, India also transitioned into the lower-middle-income category.

The poverty at $3.65 per day Lower Middle Income Countries (LMIC) line fell from 61.8 per cent to 28.1 per cent, lifting 378 million people out of poverty.

“Rural poverty dropped from 69 per cent to 32.5 per cent, and urban poverty from 43.5 per cent to 17.2 per cent, reducing the rural-urban gap from 25 to 15 percentage points with a 7 per cent annual decline,” the World Bank report reads.

Notably, the five most populous states of India, Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh, accounted for 65 per cent of the country’s extreme poor in 2011-12 and contributed to two-thirds of the overall decline in extreme poverty by 2022-23.  However, these states still accounted for 54 per cent of India’s extremely poor (2022-23) and 51 per cent of the multi-dimensionally poor (2019-21).

As measured by the multidimensional poverty index (MPI), India’s nonmonetary poverty declined from 53.8 per cent in 2005-06 to 16.4 per cent by 2019-21. The World Bank’s Multidimensional Poverty Measure is at 15.5 per cent in 2022-23.

Employment growth has outpaced the working-age population since 2021-22

As per the World Bank findings, the employment growth has outpaced the working-age population since 2021-22. Employment rates, especially among women, are rising, and urban unemployment fell to 6.6 per cent in Q1 2024-25, the lowest since 2017-18.

“Recent data indicates a shift of male workers from rural to urban areas for the first time since 2018-19, while rural female employment in agriculture has grown. Challenges persist: youth unemployment is 13.3 percent, increasing to 29 per cent among tertiary education graduates. Only 23 per cent of non-farm paid jobs are formal, and most agricultural employment remains informal,” the World Bank reported.

The multilateral agency also noted that self-employment is rising, especially among rural workers and women in India. It, however, pointed out that despite a female employment rate of 31 per cent, gender disparities remain, with 234 million more men in paid work.

Incidentally, the World Bank’s findings closely align with the Modi government’s estimates of poverty reduction in the country. The Household Consumption Expenditure Surveys (HCES) for 2022-23 and 2023-24, gives insight into the dramatic drop in extreme poverty in recent years.

The findings reveal extreme poverty, as measured by the $1.90 PPP international poverty line, has declined to below 1 per cent in 2023-24. At the $3.65 PPP poverty line, poverty has decreased from 52% in 2011-12 to just 15.1% in 2023-24. From 51.9 per cent in 2011-12 to 14.9 per cent in 2023-24 the poverty headcount ratio (HCR) at the lower middle-income benchmark of $3.20 PPP has dropped dramatically. 

Meanwhile, an SBI report supported by government data showed that India’s poverty rate has dropped below 5%, with extreme poverty nearly eradicated. The data showed that rural poverty decreased to 4.86% in FY24, registering a sharp fall from 7.2% in FY23 and 25.7% in FY12. Similarly, urban poverty also recorded a reduction, falling to 4.09% in FY24, down from 4.6% in FY23 and 13.7% in FY12.

Earlier, Prime Minister Narendra Modi had said that around 25 crore people have been lifted from poverty in the last decade. Addressing the Lok Sabha in February this year, PM Modi said, “In the past 10 years, people gave us the opportunity to serve them, and 25 crore countrymen defeated poverty and came out of it, which has been stated again and again by various studies.”

India’s poverty reduction story has been full of challenges, however, with economic growth, urbanisation, and policy interventions, the country has achieved great success in reducing poverty. While India has a way to go, lifting 17 crore people from extreme poverty in over a decade is no small feat, rather, it demonstrates India’s ability to harness economic growth, employment opportunities, agricultural reforms, industrialisation, financial inclusion and effectively implement policies targeted to uplift the weaker sections of the society. While there is scope for significant improvement, the rise in female workforce participation reflects India’s push towards a more inclusive progress, which is good for long term equity.

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