World Bank:India’s Extreme Poverty Drops to 2.3%

Latest News (2023)

• Extreme Poverty Decline: India’s extreme poverty (measured at $2.15/day in PPP terms) dropped from 16% (2011–12) to 2.3% (2022–23), lifting 171 million people above the poverty line.

• Rural-Urban Gap Narrowed: Rural poverty fell from 18.4% to 2.8%, urban from 10.7% to 1.1%.

• Multidimensional Poverty: Declined from 53.8% (2005–06) to 15.5% (2022–23).

About Poverty and Equity Briefs (PEBs)

• Purpose: Biannual World Bank reports tracking poverty, inequality, and shared prosperity in 100+ developing countries.

• Release: During World Bank-IMF Spring/Annual Meetings to keep poverty reduction central to global agendas.

• Metrics:

  • Monetary Poverty: $2.15(extreme),$3.65 (lower-middle income), $6.85 (upper-middle income) poverty lines.

  • Multidimensional Poverty: Includes education, health, and basic services access.

  • Inequality: Measured via Gini Index (consumption/income disparity).

Key Findings for India

1. Poverty Reduction:

   • $2.15/day (extreme poverty): 2.3% (2022–23) vs. 16% (2011–12).

   • $3.65/day (LMIC line): Poverty fell from 61.8% to 28.1%, lifting 378 million people.

2. Regional Progress:

   • Top 5 States (UP, Maharashtra, Bihar, WB, MP): Contributed 54% of extreme poor (2022–23), down from 65% in 2011–12.

3. Inequality Trends:

   • Consumption Gini Index: Improved from 28.8 to 25.5 (reduced inequality).

   • Income Gini Index: Worsened from 52 to 62 (rising income disparity).

   • Wage Gap: Top 10% earn 13x more than the bottom 10%.

Labor Market Challenges

• Youth Unemployment: 13.3% overall; spikes to 29% among graduates.

• Informal Jobs: Majority remain in agriculture and informal sectors.

• Gender Gap: Female employment rate at 31% (234 million fewer employed women than men).

Key Takeaways

• India’s poverty reduction is historic, with 2.3% extreme poverty (2023) reflecting broad-based progress.

• Multidimensional poverty halved since 2005, but income inequality and youth unemployment remain challenges.

• Top states must focus on inclusive growth to sustain momentum.

FAQs

1. What is extreme poverty?

   • Living on ≤$2.15/day (PPP), covering basic food and non-food needs.

2. How did India reduce poverty?

   • Growth in rural wages, social schemes (MNREGA, PMAY), and improved access to services.

3. What is multidimensional poverty?

   • Measures deprivations in health, education, and living standards, beyond income.

4. Which states drove poverty reduction?

   • UP, Maharashtra, Bihar, WB, and MP contributed two-thirds of the decline.