Industry Odisha Bureau, Oct 31: About 496 million crossed the lower middle income poverty line, but wage gaps persist.
India’s extreme poverty rate fell to 2.6% in 2023 from 27.1% in 2011. The World Bank reported this in its October 2026 Poverty & Equity Brief. Extreme poverty is measured at $3 a day. The lower middle income line, set at $4.20, tells a broader story. Poverty under that line dropped to 16.1% from 57.7%. About 496 million people crossed this threshold over the period. The bank called it one of the world’s fastest declines.
Both lines use 2021 purchasing power parity, which adjusts for price differences across countries. They are not simple currency conversions at market exchange rates. The 496 million figure relates only to the $4.20 line, not extreme poverty.
The World Bank credited three main drivers. Strong consumption growth lifted household spending. Rising employment, especially among women, added earners to families. Expanded social transfers, including food subsidies, also cushioned vulnerable homes. Employment rose by about 134 million between 2017 and 2023. That was nearly twice the growth in India’s working-age population. Rural women entering paid work drove much of the gain. Yet more jobs did not always mean better jobs.
Non-monetary measures also improved. The Oxford Poverty and Human Development Initiative’s index fell to 16.4% in 2019–21. It stood at 53.8% in 2005–06. The World Bank’s own multidimensional measure was 15.5% in 2022–23. These are separate methods, so the two figures should not be directly linked.
Inequality remains stark. Median earnings of India’s top 10% of workers were about 13 times the bottom 10%. That gap, recorded for 2023, concerns wages, not wealth.
Poverty is also becoming geographically concentrated. Rural households gained faster, narrowing the rural-urban gap. But many of the remaining poor still live in low-productivity rural areas. Good non-farm jobs remain scarce there. A belt stretching from Uttar Pradesh to West Bengal holds about 57% of India’s poor. Further progress, the bank said, depends on productive jobs in these states.
The remaining poor also share common disadvantages. They tend to have lower education, fewer assets and less stable work. Many households also have higher dependency ratios. The bank expects poverty to keep falling, but more slowly. Its $4.20 rate is projected to ease from 14.2% in 2026 to 12.1% by 2028. These are forecasts, not outcomes.
Labour signals are mixed. Youth unemployment rose to 15.9% from 14.6% between the first quarters of FY26 and FY27. Rural young women were particularly affected. Real earnings stayed broadly flat as job growth clustered in low-productivity work.
Finance minister Nirmala Sitharaman said the findings show sustained policy efforts are delivering results. She pledged a focus on productive jobs, stronger incomes and better public services. India has moved millions above poverty lines. The next task is making those gains last through better jobs and higher real incomes.
