India Lifts 170 Million Out Of Poverty In 10 Years, Says World Bank

India has made significant progress in alleviating poverty, with approximately 170 million individuals rising above the poverty line between 2011-12 and 2022-23, according to a recent World Bank report. The study highlights a sharp decline in the share of the population living in extreme poverty, defined as surviving on less than $2.15 per day. 

This figure dropped from 16.2 per cent in 2011-12 to just 2.3 per cent in 2022-23, marking a major achievement in the country’s ongoing efforts to improve living standards.

Finance Minister Nirmala Sitharaman acknowledged this development on social media, emphasizing that job growth has not only kept pace with but surpassed the increase in the working-age population. The report points out that rural regions experienced a more pronounced decline in poverty compared to urban areas. In rural India, extreme poverty fell from 18.4 per cent to 2.8 per cent, while in urban centers, it declined from 10.7 per cent to 1.1 per cent over the same time frame.

The World Bank’s "Poverty and Equity Brief" also revealed that five states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—were home to 65 per cent of India’s poorest in 2011-12. However, these states accounted for two-thirds of the national poverty reduction by 2022-23 and now comprise 54 per cent of those still in extreme poverty.

The data draws on findings from both the 2011-12 Consumption Expenditure Survey and the 2022-23 Household Consumption Expenditure Survey. Although the newer survey incorporated methodological enhancements, including improved questionnaires and sampling strategies, the World Bank cautioned that these changes complicate direct comparisons over time. It also flagged concerns over potential underestimation of consumption inequality due to these limitations.

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Inequality Based On Consumption

India’s Gini Index, which tracks inequality based on consumption, fell from 28.8 to 25.5 during the period, suggesting narrowing economic disparity. Yet, this stands in contrast to findings from the World Inequality Database, which indicated that income inequality has increased. Their data showed the income Gini Index climbing to 62 in 2023, up from 52 in 2004, pointing to a persistent wage gap. Notably, the top 10 per cent of earners made 13 times more than the bottom 10 per cent in the 2023-24 fiscal year.

On a more encouraging note, employment trends have shown positive momentum since 2021-22. The workforce has not only grown but diversified. The World Bank noted an uptick in male labor migration from rural to urban settings, coupled with increased participation of rural women in agricultural employment, indicating a shift in the nature of India’s labor market.

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