NEW DELHI: In a stark illustration of global economic divides, a person entering India’s top 10% of consumers gets by on just $10 a day—less than what someone entering the bottom 10% lives on in the world’s wealthiest nations.
According to data from the World Bank’s Poverty and Inequality Platform, the poorest decile in the United States, Canada, Germany, and Australia begins at $25 to $31 per person daily, measured using 2021 purchasing power parities.
India’s poorest decile begins at roughly $3 per person per day. While the top 10% includes high-net-worth individuals consuming far more than $10 daily. At the same time, recent World Bank estimates point to dramatic poverty reduction over the past decade. Extreme poverty, measured at the $3-a-day line, dropped from 27.1% in 2011–12 to 2.6% in 2023–24.
Meanwhile, poverty measured at the lower-middle-income line of $4.20 daily fell from 57.7% to 16.1%, lifting approximately 500 million people out of poverty, though 233 million Indians still live below that mark.
The World Bank cautions that changes in survey methodology affect comparisons of India’s poverty estimates across survey rounds.
Its revised estimates incorporate the Modified Mixed Reference Period (MMRP), which uses different recall periods for household spending items and can capture consumption more accurately.
The Bank has revised historical estimates to improve comparability, but the resulting poverty decline should not be attributed solely to methodological changes.
While measured consumption inequality has narrowed, with India’s consumption Gini coefficient declining from 28.8 in 2011–12 to 25.5 in 2022–23, income and wealth data tell a different story.
Figures from the World Inequality Report show that India’s top 10% receives about 58% of national income and holds 65% of national wealth, while the bottom half receives just 15% of income.
Modern services like information technology have expanded at nearly 13% annually since 2000, labour-intensive sectors such as apparel and textiles make up less than 20% of formal manufacturing value added. This bottleneck prevents millions of workers from transitioning out of low-productivity agricultural jobs into well-paid formal employment.
Despite strong recent economic momentum, with real GDP expanding 7.8% in the first quarter of FY2026–27, long-term hurdles remain.
To achieve its target of becoming a developed, high-income economy by 2047, the World Bank estimates India must sustain an average real growth rate of 7.8% every year for the next 22 years—nearly tripling per capita gross national income to around $20,000.