India’s Recent Progress In Poverty Reduction

As per the World Bank’s Spring 2025 report, India has lifted 171 million people out of extreme poverty.

World Bank’s Poverty and Equity Briefs (PEBs)

The PEBs provide semi-annual insights into poverty, inequality, and shared prosperity trends across over 100 developing countries.
Published during the Spring and Annual Meetings of the World Bank and IMF.
Each brief includes updates on national and international poverty lines ($2.15, $3.65, and $6.85/day), multidimensional poverty, and inequality using the Gini Index.
They serve as a key tool for global and national monitoring of poverty and equity.

Key Highlights of India’s 2025 Poverty and Equity Brief

Extreme Poverty: Reduced significantly from 16.2% in 2011-12 to 2.3% in 2022-23.

Multidimensional poverty

Multidimensional poverty refers to poverty that goes beyond income levels. It includes various deprivations that people face in their daily lives, affecting their well-being.
It is measured across different non-income-based dimensions, such as:
- Health: Child mortality, malnutrition
- Education: Years of schooling, school attendance
- Living Standards: Access to clean water, sanitation, electricity, cooking fuel, housing quality, and ownership of basic assets

Lower-Middle-Income Poverty: Fell from 61.8% to 28.1% during the same period, lifting 378 million people.
Rural-Urban Gap: Narrowed from 7.7 percentage points to 1.7 points in extreme poverty.
Multidimensional Poverty: Dropped from 53.8% in 2005-06 to 16.4% by 2019-21; stood at 15.5% in 2022-23.
Gini Index: Improved from 28.8 (2011-12) to 25.5 (2022-23), indicating reduced income inequality.

Gini Index

The Gini Index is a statistical measure that quantifies income or wealth inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).

It is calculated based on the Lorenz Curve, comparing actual income distribution to an ideal equal distribution.

Key Factors Responsible for Poverty Reduction

Targeted Welfare Schemes: Schemes like SBM, PMAY, Poshan Abhiyan, and Samagra Shiksha improved health, housing, nutrition, and education, significantly reducing multidimensional poverty
Economic Reforms and Inclusive Development: Broad-based growth across rural and urban areas led to a sharp fall in lower-middle-income poverty.
Access to Basic Services: Initiatives like JJM, Saubhagya, and PMJDY enhanced access to drinking water, electricity, and banking, fostering inclusive development.
Rise in Employment: Post-2021, employment growth outpaced the working-age population, with a notable increase in female workforce participation and a drop in urban unemployment to 6.6%.
Workforce Shift: A significant shift of male workers to urban jobs and rise in self-employment among rural women boosted incomes and resilience.

Government Initiatives Addressing Multidimensional Poverty

Swachh Bharat Mission (SBM): Promoted sanitation and eliminated open defecation, improving public health and hygiene.
Jal Jeevan Mission (JJM): Ensured access to piped drinking water in rural households, improving quality of life.
Poshan Abhiyan: Addressed malnutrition among children, pregnant and lactating women through better nutrition and awareness.
Samagra Shiksha: Integrated school education program improving access, quality, and equity in schooling.
Pradhan Mantri Awas Yojana (PMAY): Provided affordable housing to urban and rural poor, enhancing living conditions.

Challenges in Poverty Reduction in India

Population Growth: Puts pressure on public infrastructure and resources.
Rapid Urbanization: Leads to rise in slums and informal settlements.
- As per World bank 2036, India’s towns and cities will be home to 600 million people, or 40 percent of the population, up from 31 percent in 2011.
Climate Change: Disproportionately affects poor communities through disasters and livelihood loss.
- More than 80 percent of India’s people live in districts that are at risk of climate-induced disasters.
Economic Disruptions: Events like global recessions and pandemics deepen vulnerability.
Policy Implementation Gaps: Corruption, delays, and inefficiency hinder program effectiveness.

Way Forward

Inclusive Economic Growth: Promote industrialisation, entrepreneurship, and access to microfinance.
Social Interventions: Invest in universal healthcare and quality education to empower the poor.
Infrastructure Development: Expand housing, roads, sanitation, and connectivity in underdeveloped regions.
Strengthen Governance: Improve transparency, accountability, and community participation in policy delivery.
Sustainable Development: Focus on climate-resilient infrastructure and renewable energy adoption.

Additional Reading: Multidimensional Poverty

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