NEW DELHI: Over the past decade, India has significantly reduced poverty with extreme poverty declining from 16.2% in 2011-12 to 2.3% in 2022-23, lifting 171 million people above the poverty line, a World Bank report said on Friday.
Rural extreme poverty dropped from 18.4% to 2.8% and urban from 10.7% to 1.1%, narrowing the rural-urban gap from 7.7 to 1.7 percentage points – a 16% annual decline, according to the multilateral agency’s Poverty and Equity Brief.
“India also transitioned into the lower-middle-income category. Using the $3.65 per day LMIC (lower middle income country) poverty line, poverty fell from 61.8% to 28.1%, lifting 378 million people out of poverty,” said the report.
It said rural poverty dropped from 69% to 32.5%, and urban poverty from 43.5% to 17.2%, reducing the rural-urban gap from 25 to 15 percentage points with a 7% annual decline.
The five most populous states – Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh – accounted for 65% of the country’s extreme poor in 2011-12 and contributed to two-thirds of the overall decline in extreme poverty by 2022-23, according to the report.
“Nevertheless, these states still accounted for 54% of India’s extremely poor (2022-23) and 51% of the multidimensionally poor (2019-21). As measured by the multidimensional poverty index (MPI), non-monetary poverty declined from 53.8% in 2005-06 to 16.4% by 2019-21,” it said.
The World Bank’s Multidimensional Poverty Measure is at 15.5% in 2022-23. India’s consumption-based Gini index improved from 28.8 in 2011-12 to 25.5 in 2022-23, though inequality may be underestimated due to data limitations. In contrast, the World Inequality Database shows income inequality rising from a Gini of 52 in 2004 to 62 in 2023.
It said employment growth has outpaced the working-age population since 2021-22. Employment rates, especially among women, are rising, and urban unemployment fell to 6.6% in Q1 FY24/25, the lowest since 2017-18. “Recent data indicates a shift of male workers from rural to urban areas for the first time since 2018-19, while rural female employment in agriculture has grown,” said the report.
