India has cut extreme poverty sharply, but an analysis of the World Bank’s prosperity gap shows that millions remain far from a comfortable standard of living.

India’s prosperity gap is 4.9, so average incomes would have to rise about five times to reach the global benchmark.

• Poverty has fallen fast: The World Bank’s Oct 2026 brief says extreme poverty ($3 a day) fell from 27.1% (2011) to 2.6% (2023), and about 496 million people moved above the $4.20 line.
• But prosperity is far: About 80% of Indians are below the $8.30 a day line, the level India aims for as it becomes “Viksit”.
• Jobs are the weak link: Real earnings are flat, new jobs are low-productivity, and youth unemployment rose from 14.6% to 15.9%.

• The measure: A World Bank indicator of how far a society is from a standard of prosperity. It is the average factor by which people’s incomes must rise to reach $28 per person per day.
• Why it is useful: It shifts attention from average income to the least advantaged, since raising poorer people’s incomes reduces the gap most.
• India’s score: 4.9. Despite big falls in poverty, average consumption must rise nearly five times.

• Below $3 a day: 2.6%.
• Below $4.20 a day (lower-middle-income line): 16.1%.
• Below $8.30 a day (upper-middle-income line): 80%.
• In the middle band: About 64% of Indians fall between $4.20 and $8.30. Many in this band need their incomes to rise three to sevenfold to reach prosperity.
• Lesson: The factors that helped people escape poverty are not the same as those needed to reach prosperity.

• Informal work: About 90% of workers are informal (ILO India Employment Report 2024), and self-employment was 55.8% of employment in 2022.
• Slow shift to regular jobs: Regular wage work rose only from 22.4% to 23.6% (PLFS 2024 to 2025).
• Distress employment: The share of unpaid family helpers rose from 12.4% (2017-18) to 17.1% (2023-24).
• Young entrants: Only 46.7% of people aged 20 to 29 were employed in the Time Use Survey 2024, and educated youth were about 65.7% of unemployed youth in 2022, showing a skills-jobs mismatch.
• Flat wages: Real wages of regular salaried workers were stagnant or falling between 2012 and 2022.
• Costly services of uncertain quality: Families buy private education and health care, where quality is hard to judge, and graduates may not turn spending into jobs.

• A better target: Moving from poverty counts to prosperity tests whether growth is inclusive.
• Policy focus: Shifts attention to job quality, wages and human capital.

• Low-productivity employment and weak wage growth.
• Mismatch between education and jobs.
• Uneven opportunities across States and groups.
• Weak oversight of private education and health services.