India's extreme poverty rate dropped sharply to 5.3% due to free, subsidised food transfers: World Bank data shows

Mint

07-06-2025

New Delhi, Jun 7 (PTI) India's extreme poverty rate declined sharply to 5.3 per cent over a decade from 27.1 per cent in 2011-12 even as the World Bank revised upwards its threshold poverty line to USD 3 per day.
Given India's inflation rate between 2017 and 2021, a revised extreme poverty line of USD 3 would constitute a 15 per cent higher threshold than USD 2.15 expressed in 2021 prices and result in a 5.3 per cent poverty rate in 2022-23, the World Bank said in a report.
In India, the report said, 54,695,832 people lived on less than USD 3 per day in 2024. Thus, the poverty rate at USD 3 per day (2021 PPP -- percentage population) is 5.44 per cent in 2024.
The extreme poverty rate decreased from 16.2 to 2.3 per cent between 2011-12 and 2022-23, while the poverty rate at the lower middle income country (LMIC) line declined by 33.7 percentage points, it said.
Free and subsidised food transfers supported poverty reduction, and the rural-urban poverty gap narrowed. The five most populous states account for 54 per cent of the extremely poor, it said.
With regard to economy, the report said, real GDP of India was around 5 per cent below the pre-pandemic trend level as of FY25.
Growth should gradually converge back to potential over 2027-28 assuming the current global uncertainties are resolved in an orderly fashion, it said.
"The outlook, however, is subject to significant downside risks, as policy shifts may continue to unfold globally. Elevated trade tensions would dampen demand for India's exports and further delay the recovery in investment," it said.
The current account deficit is expected to average around 1.2 per cent of GDP over FY26-28 and remain adequately financed by capital inflows, it said, adding that foreign exchange reserves are projected to remain stable around 16 per cent of GDP.
India has lifted 171 million people from extreme poverty in the decade between 2011-12 and 2022-23, the World Bank said.
"Over the past decade, India has significantly reduced poverty. Extreme poverty (living on less than USD 2.15 per day) fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23, lifting 171 million people above this line, the World Bank had said in its 'Poverty & Equity Brief' on India in April.
The rural extreme poverty dropped from 18.4 per cent to 2.8 per cent, and urban from 10.7 per cent to 1.1 per cent, narrowing the rural-urban gap from 7.7 to 1.7 percentage points a 16 per cent annual decline, it had said.