Major fall in poverty numbers
India’s Extreme Poverty Declines to 5.3 Percent: India has seen a dramatic fall in extreme poverty, according to a recent World Bank report. The percentage of Indians living below the poverty line has dropped to 5.3% in 2022-23, from a concerning 27.1% in 2011-12. That means 171 million people have moved above the extreme poverty threshold over the past decade.
What makes this more notable is that the poverty line was revised upward to $3 per day. Earlier, it was $2.15. This change reflects a more accurate cost of living using the 2021 purchasing power parity (PPP) system. Despite the stricter benchmark, India still managed to bring a large portion of its population out of extreme poverty.
Role of welfare schemes
Much of this progress is linked to government welfare schemes, especially free or subsidised food programs under the National Food Security Act. These programs helped many poor families manage during difficult times, especially during the pandemic.
India’s rural extreme poverty rate fell from 18.4% to 2.8%, and urban poverty dropped from 10.7% to 1.1%. This narrowing gap is a sign that inclusive growth is slowly becoming a reality. The rural-urban poverty difference, which used to be 7.7 percentage points, has now come down to just 1.7 points.
Economic growth and poverty trends
Even though India’s real GDP in FY25 is still around 5% lower than pre-pandemic levels, the economic recovery expected by 2027-28 is promising. This progress in poverty reduction has come despite economic shocks like the pandemic and global slowdowns.
Five of India’s most populous states are home to over half of the country’s extreme poor, showing that regional disparities still exist. Continued support in these regions will be essential.
Updated poverty line and its impact
The shift to a $3/day line is a move towards a more realistic poverty estimate. It includes the effects of inflation, rising living costs, and better data on household needs. Using this updated measure, 54.7 million people still remain below the poverty line as of 2024.
Despite these challenges, the overall trend shows that India is on the right path. Investments in infrastructure, education, and health have likely played an indirect role in this improvement.
Static Usthadian Current Affairs Table
| Summary/Static | Details |
| Why in the news | India’s Extreme Poverty Falls to 5.3% (2022-23) |
| Extreme Poverty Rate | 5.3% (at $3/day threshold) |
| Reduction in Poverty | From 27.1% (2011-12) to 5.3% (2022-23) |
| People Lifted from Poverty | 171 million |
| Rural Poverty Rate | Dropped from 18.4% to 2.8% |
| Urban Poverty Rate | Dropped from 10.7% to 1.1% |
| Rural-Urban Gap | Reduced from 7.7 to 1.7 percentage points |
| People Below $3/day (2024) | 54.7 million |
| Economic Recovery Outlook | Full recovery expected by 2027-28 |
