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.
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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
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- 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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