India has made progress in reducing extreme poverty, but many people still struggle to meet their basic needs. According to the World Bank, one in four Indians—over 35 crore people—live below the minimum level needed for a decent life.
They may no longer fall under the traditional “extreme poor,” but they still lack access to basic necessities like nutritious food, safe housing, healthcare, and education.
“There is corroborating evidence that household welfare in India has improved since 2011, including declining trends in multidimensional poverty, rising social transfers, and growth in per capita GDP,” a World Bank spokesperson stated. “At the same time, the 2022–23 household survey introduced several improvements in questionnaire design and implementation compared to 2011–12, which are likely to have enhanced the measurement of household expenditures.”
Official data shows that only 5% of Indians now live in extreme poverty, based on the $3-per-day global benchmark adjusted for purchasing power parity (PPP). This marks a steep drop from 27% in 2011. Nearly 26.9 crore people moved out of extreme deprivation in just over a decade.
However, the World Bank says the $3/day threshold is no longer appropriate for India’s current stage of development. “$3/day PPP is not the appropriate threshold for India,” the spokesperson said. “The relevant international poverty line for India today is the lower-middle-income (LMI) threshold of $4.20 per person per day.”
This benchmark, already used in countries like Sri Lanka, Nepal, and Bangladesh, is seen as a more realistic measure of what it takes to live with basic dignity in a growing economy. Yet even by this updated standard, over 35 crore Indians still fall short of meeting essential needs.
India has not updated its official national poverty line since 2011–12. While newer methods like the Modified Mixed Recall Period (MMRP) have helped capture higher household consumption, experts argue that these changes can also make poverty estimates appear artificially lower. Politically sensitive thresholds like the old Rs 33-a-day urban poverty line have faded from use.
In response, India increasingly relies on global benchmarks and broader measures like the Multidimensional Poverty Index (MPI), which evaluates factors such as education, sanitation, electricity, and housing. MPI figures show that multidimensional poverty fell from 29% in 2013 to 11.3% in 2022. Over 20 crore people exited deprivation during that period, especially in states like Uttar Pradesh, Bihar, and Madhya Pradesh.
Despite these improvements, the gap between rich and poor remains significant. India’s Gini Index, which tracks income inequality, improved only modestly from 28.8 in 2011 to 25.5 in 2022. The top 1% of Indians now control over 40% of national wealth, while the bottom 50% own just 6.4%.
In urban areas, high rents and precarious employment mean that even those above the poverty line often live on the edge. In rural regions, land fragmentation and seasonal jobs make incomes unstable. A single medical emergency, job loss, or delayed pay cheque can plunge families back into poverty.
“There is still some work to be done to lift people above $4.20 a day,” the World Bank spokesperson said. “Using a more relevant benchmark for India’s current development status—the lower-middle-income poverty line—reveals that nearly one in four Indians still falls below an appropriate standard of living.”
“Our current estimates suggest that about 5% of India’s population lives in extreme poverty—surviving on less than $3 per day. While extreme deprivation has declined, this still amounts to over 7 crore people unable to meet even the most fundamental needs.”
The World Bank has also cautioned against drawing direct comparisons with older poverty figures due to changes in data collection. Still, the findings signal a shift in the poverty conversation.
India’s challenge may no longer be just about lifting people above a basic line, but about redefining what that line should mean in the first place.
