India has made progress in reducing poverty, but World Bank estimates are flawed

A fall in extreme poverty means fewer people are estimated to live below the World Bank’s international poverty line. For India, the brief uses $3 per person per day at 2021 purchasing-power-parity prices. It is a narrow measure of material resources, not a complete picture of living conditions or economic security.

Multidimensional poverty looks at several disadvantages together. India’s NITI Aayog estimate fell from 29.17% in 2013-14 to 11.28% in 2022-23, using National Family Health Survey data. Those measures reflect areas such as food security, housing, sanitation, electricity and banking. A household may therefore escape the extreme-poverty spending line while still facing serious deprivation.

The distinction matters because the World Bank’s 2.6% figure can suggest a near-complete victory over poverty. A higher $4.20 line leaves about 16% of Indians below it, or roughly 23 crore people. Many above that line remain vulnerable to illness, job loss or stagnant earnings.

The reported decline is enormous: the World Bank puts India’s extreme poverty rate at 27.1% in 2011-12 and 2.6% in 2023-24. That is a drop of 24.5 percentage points. The bank describes it as one of the fastest poverty declines anywhere in the world.

The estimated human scale is also striking. The World Bank says about 496 million people escaped extreme poverty over the period. The calculation uses the international line of $3 a day, adjusted through purchasing power parity at 2021 prices. In India, that is roughly Rs 60 per person per day.

However, the article warns that the headline result rests on consumption surveys that used different methods. The 2011-12 and 2023-24 rounds are not strictly comparable. The World Bank tries to correct for this, but lacks a bridge survey measuring both methods. The size of the decline therefore remains uncertain.

Household consumption surveys estimate living standards by recording what families spend on food, clothing, rent, transport, health, education and other needs. Comparing rounds helps measure changes in purchasing power and poverty. That comparison works best when the questions, timing and sample design remain broadly consistent.

In 2011-12, surveyors recorded spending during a single household visit. The 2022-23 survey spread collection across multiple visits. It also used separate questionnaires for different kinds of spending and changed its sampling design. These changes can affect what households report and how the results represent the population.

The two rounds are therefore not strictly comparable. The World Bank’s methodology note warns that survey changes can substantially affect measured poverty. It tries to adjust for the differences, but India has no bridge survey that measures consumption under both methods. That leaves uncertainty about how much of the observed spending increase reflects real change.

Poverty estimates depend on where household consumption falls relative to a poverty line. If a survey method records more spending than an older method, measured consumption rises. More households then appear above the line, even if their actual resources have not improved by the same amount. The reverse can also happen if the new method records less.

India’s 2011-12 survey collected spending in one visit. The 2022-23 and 2023-24 surveys used multiple visits, separate questionnaires and a changed sample design. These choices may change what people remember, report or include. Because the surveys do not measure consumption in exactly the same way, the apparent jump in spending may partly be methodological.

The World Bank attempts corrections, but there is no bridge survey applying both methods to the same households. That makes the size and direction of the distortion unclear. The change from a 5.3% estimate for 2022-23 in 2025 to 2.6% for 2023-24 illustrates why survey sensitivity matters.

The World Bank uses $4.20 per person per day as the relevant poverty line for lower-middle-income countries such as India. At purchasing-power-parity prices, the article puts this at about Rs 84 per day, though it also refers to roughly Rs 82 in discussing the estimate. Using this higher bar gives a fuller picture than the $3 extreme-poverty line.

With the $4.20 threshold, poverty falls from 57.7% in 2011-12 to about 16%. That leaves roughly 23 crore Indians below the line. The comparison changes the story sharply: instead of about one in thirty-eight people below the extreme line, around one in six remains below the higher threshold.

The line also separates poverty from security. A household spending just over Rs 84 per person daily is counted as non-poor, yet may have little protection against a medical emergency or job loss. The brief projects poverty at this line falling from 14.2% in 2026 to 12.1% by 2028.

Poverty remains more concentrated in rural India because income gains there are weaker and work is often less productive. At the World Bank’s $4.20-a-day line, 19.3% of the rural population is poor, compared with 8.6% of the urban population. The countryside therefore contains most of the country’s remaining poor.

The article links this gap to the quality of rural employment. Although employment has grown, much rural job creation has been in low-productivity work. Such jobs may provide work without lifting household earnings enough to cross a higher poverty threshold or build savings. Stagnant real earnings and higher youth unemployment add pressure.

There have also been real improvements. Poorer households gained better food security, housing, electricity and banking access, supported partly by expanded transfers and public services. But these gains do not remove income insecurity. Reducing rural poverty further will require employment that raises productivity, wages and resilience, not only more jobs.

A purchasing-power-parity, or PPP, poverty line compares what the same amount of money can buy in different countries. The World Bank’s $3 line is expressed at 2021 prices and converted to local purchasing power. In India, the article says this is roughly Rs 60 per person per day.

The choice of line matters because different thresholds answer different questions. The $3 line is intended for the world’s poorest countries. For lower-middle-income countries such as India, the World Bank uses a higher $4.20 line, about Rs 84 daily at PPP. More people fall below a higher threshold, even though the underlying households have not changed.

Using $3 produces an extreme-poverty rate of 2.6% for India in 2023-24. Using $4.20 leaves about 16% below the line, or roughly 23 crore people. The higher measure better captures people living close to hardship, including households vulnerable to illness or job loss.