Has poverty been nearly eradicated in India? Yes, if one goes by the findings of a World Bank brief on poverty and equity released in April. As per the report, the proportion of people in India living below the revised international poverty line of $3 per capita per day at 2021’s purchasing power parity (PPP) has declined sharply from 27.1 percent in 2011-12 to 5.3 percent in 2022-23.
If one uses the previous international poverty line of $2.15 per capita per day (2017 PPP) the proportion below the poverty line in India fell from 16.2 percent in 2011-12 to 2.3 percent in 2022- 23. This implies that over the period from 2011-12 to 2022-23, about 171 million people were lifted above the poverty line. If, on the other hand, one uses the international poverty line of $3.65, applicable for lower middle-income countries such as India, the proportion declined from 61.8 percent to 28.1 percent during the same period.
The World Bank’s findings are based on data from India’s Household Consumer Expenditure Surveys of 2011-12 and 2022-23. Given that the methodology used for these two surveys was different, the World Bank has not clarified how these two sets of data were made comparable. The Indian government did not release the 2017-18 HCES due to data quality issues, although it followed the same methodology as the 2011-12 survey.
In a recent article, former RBI Governor C Rangarajan and Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister, argue that India’s GDP growth primarily explains this decline in poverty. This is questionable considering the history of East Asian economies, which experienced a sharp decline in poverty levels only at high economic growth rates. China, for instance, reported a sharp decline in poverty levels only when GDP growth exceeded 10 percent between 1978 to 2010. India’s average GDP growth rates have ranged between 3.8 percent and around 7 percent in the last 10 years, except for -5.38 percent in 2020 due to the Covid pandemic.
Moreover, evidence shows the fruits of growth have largely accrued to the rich. Despite the growth, the share of labour in India’s gross value added has recorded only a slight increase whereas corporate profits have surged. Oxfam’s Inequality report for India shows the richest 1 percent controlled more than 40 percent of the country’s total wealth, whereas the bottom 50 percent owned a mere 3 percent. About 73 percent of the wealth generated in 2017 went to the top 1 percent, whereas the bottom half reported a mere 1 percent increase in their wealth.
Then what explains this steep decline in poverty? There is no doubt that the safety nets provided by the government such as the provision of free foodgrains to over 60 percent of the population and subsidised LPG to poor households largely explain it. However, if less than a twentieth are extremely poor in India, one may question the justification for providing free foodgrains to three-fifths of the population overlooking its adverse fiscal implications and impact on agricultural prices.
Unlike the monetary-based poverty line used by the World Bank, the UNDP’s multidimensional poverty index (MPI) measures the extent of deprivation based on 10 health, education and standard of living indicators. Based on it, India reported 234 million people as multidimensionally poor in 2024. The poverty rate in terms of this broader definition of deprivation was 16.4 percent. India along with Pakistan, Ethiopia, Nigeria and the Democratic Republic of the Congo accounted for nearly half the global multidimensionally poor population of 1.1 billion people.
According to the National Family Health Survey conducted in 2019-21, despite the government’s initiatives to address malnutrition such as POSHAN and Integrated Child Development Services, about 35.5 percent of children aged under 5 years are stunted, 19.3 percent ‘wasted’, and 32.1 percent underweight. Further, 7.7 percent of children are ‘severely wasted’, or are facing acute malnutrition.
Unemployment among youth, women and rural people continues to be high alongside wage stagnation among workers. As per the latest Periodic Labour Force Survey data released by the Union ministry of statistics, the unemployment rate among youth in the age group 15-29 years in rural areas rose to 13.7 percent in May 2025 and 17.9 percent in urban areas. Unemployment rates for women also rose to 5.8 percent. The Centre for Monitoring Indian Economy states that India’s youth unemployment rate during the past decade has hovered around 22 percent. Critics therefore refer to the past decade as one characterised by jobless growth.
India still has a long way to go before poverty can be totally eradicated. For this to happen, India’s annual GDP growth rate needs to be accelerated to 10 percent or more. While it is laudable that India has outstripped Japan in total economic output, the GDP per capita in India—at $2,711 in 2024—is still a tenth of that in Japan, where it is at $33,950.
K N Ninan | Professor of economics, ISEC, Bengaluru and Lead Author, GEO-7, UNEP Nairobi
(Views are personal)
(ninankn@yahoo.co.in)