The World Bank has updated its extreme poverty threshold from $2.15 to $3 a day. This change has significantly impacted India’s poverty statistics. The latest figures show that the extreme poverty rate in India dropped from 27.1% in 2011-12 to 5.3% in 2022-23. In terms of numbers, the people living in extreme poverty decreased from about 344 million to 75 million.
When using the earlier poverty line of $2.15 a day, only 2.3% of Indians were considered extremely poor, which is a remarkable reduction from 16.2% a decade ago. The number of individuals living below this line fell to approximately 34 million in 2022 from around 206 million in 2011.
Despite the new $3 threshold reflecting global inflation, India’s poverty rates remain encouraging. While the extreme poverty rate rises to 5.3% at this new benchmark, it is still a positive reflection of progress made over the years.
Revising the lower-middle-income poverty line to $4.20 per day (from the previous $3.65) also shows improvement. The proportion of Indians living under this line decreased from 57.7% in 2011-12 to 23.9% in 2022-23, with the absolute number of people in this category falling from around 732 million to 342 million over the same period.
As of 2023, India’s population is estimated at around 1.44 billion. With the new LMIC poverty line, the number of people living in poverty has decreased, which highlights a positive trend towards reducing poverty levels across the country.
Rural poverty has also seen a notable decline, dropping from 69% in 2011-12 to 32.5% in 2022-23. Urban poverty experienced a similar reduction, falling from 43.5% to 17.2% over the same timeframe.
Furthermore, a report from the World Bank indicates a significant drop in non-monetary poverty, which measures factors like education and access to basic services. This index has decreased from 53.8% in 2005-06 to just 15.5% in 2022-23.
Data from the recent Household Consumption Expenditure Survey indicates an increase in monthly spending. For instance, average monthly spending for people in rural areas rose by 45.4% to about ₹2,079, while urban monthly spending increased by 38% to around ₹3,632.
India is continually making strides in poverty reduction, and the upcoming updates on poverty rates for 2023-24 are expected to bring more insights into this progress.
