Poverty and Equity Brief for India Report

Current Context: India has achieved significant progress in reducing poverty, with extreme poverty levels dramatically decreasing over the past decade, according to the latest World Bank report.

Key Highlights

Poverty Reduction:

• 171 million people lifted above the poverty line between 2011 and 2023.
• Extreme poverty fell from 16.2% in 2011-12 to just 2.3% in 2022-23.
• Rural vs. Urban Poverty:
• Rural Areas: Poverty dropped from 4% to 2.8%.
• Urban Areas: Poverty decreased from 7% to 1.1%.
• Rural-Urban Gap: The gap narrowed from 7 to 1.7 percentage points.

Transition to Lower-Middle-Income Status:

• India’s shift into the lower-middle-income category led to a reduction in poverty rates from 8% to 28.1% using the $3.65/day poverty line.
• Rural Poverty: Decreased from 69% to 32.5%.
• Urban Poverty: Reduced from 43.5% to 17.2%.

Impact of Major States:

• Top States: Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh accounted for 65% of India’s extreme poor in 2011-12.
• By 2022-23, these states contributed to two-thirds of the decline in extreme poverty but still represent 54% of the extremely poor population.
• Multidimensional Poverty Index (MPI):MPI decreased from 8% in 2005-06 to 16.4% in 2019-21, further dropping to 15.5% in 2022-23, reflecting progress beyond income poverty.
• Income Inequality Trends: Gini Index for Consumption: Improved from 8 in 2011-12 to 25.5 in 2023.