Poverty in India remains a major challenge in the country. The country has used an income of per day as poverty-line which in turn has faced criticism for being too low. According to the World Bank, India experienced a significant decline in the extreme poverty, from 22.5% in 2011 to 10.2% in 2019. A working paper of the bank said rural poverty declined from 26.3% in 2011 to 11.6% in 2019. The decline in urban areas was from 14.2% to 6.3% in the same period. The poverty level in rural and urban areas went down by 14.7 and 7.9 percentage points, respectively. According to United Nations Development Programme administrator Achim Steiner, India lifted 271 million people out of extreme poverty in a 10-year time period from 2005–2006 to 2015–2016. A 2020 study from the World Economic Forum found "Some 220 million Indians sustained on an expenditure level of less than Rs 32 / day—the poverty line for rural India—by the last headcount of the poor in India in 2013."
The World Bank has been revising its definition and benchmarks to measure poverty since 1990–1991, with a $0.2 per day income on purchasing power parity basis as the definition in use from 2005 to 2013. Some semi-economic and non-economic indices have also been proposed to measure poverty in India. For example, in order to determine whether a person is poor, the Multi-dimensional Poverty Index places a 33% weight on the number of years that person spent in school or engaged in education and a 6.25% weight on the financial condition of that person.
The different definitions and underlying small sample surveys used to determine poverty in India have resulted in widely varying estimates of poverty from the 1950s to 2010s. In 2019, the Indian government stated that 6.7% of its population is below its official poverty limit. Based on 2019's PPPs International Comparison Program, According to the United Nations Millennium Development Goals (MDG) programme, 80 million people out of 1.2 billion Indians, roughly equal to 6.7% of India's population, lived below the poverty line of $1.25 and 84% of Indians lived on less than $6.85 per day in 2019.
From the late 19th century through the early 20th century, under the British Raj, poverty in India intensified, peaking in the 1920s. Famines and diseases killed millions in multiple cycles throughout the 19th and early 20th centuries. After India gained its independence in 1947, mass deaths from famines were prevented. Since 1991, rapid economic growth has led to a sharp reduction in extreme poverty in India. However, those above the poverty line live a fragile economic life.John Burn-Murdoch and Steve Bernard, The Fragile Middle: millions face poverty as emerging economies slow, The Financial Times (13 April 2014). Retrieved 16 August 2017. As per the methodology of the Suresh Tendulkar Committee report, the population below the poverty line in India was 354 million (29.6% of the population) in 2009–2010 and was 269 million (21.9% of the population) in 2011–2012. In 2014, the Rangarajan Committee said that the population below the poverty line was 454 million (38.2% of the population) in 2009–2010 and was 363 million (29.5% of the population) in 2011–2012. Deutsche Bank Research estimated that there are nearly 300 million people who are in the middle class. If these previous trends continue, India's share of world GDP will significantly increase from 7.3% in 2016 to 8.5% by 2020. In 2012, around 170 million people, or 12.4% of India's population, lived in poverty (defined as $1.90 (Rs 123.5)), an improvement from 29.8% of India's population in 2009. In their paper, economists Sandhya Krishnan and Neeraj Hatekar conclude that 600 million people, or more than half of India's population, belong to the middle class.
The Asian Development Bank estimates India's population to be at 1.28 billion with an average growth rate of 1.3% from 2010 to 2015. In 2014, 9.9% of the population aged 15 years and above were employed. 6.9% of the population still lives below the national poverty line and 6.3% in extreme poverty (December 2018).Poverty in India. Asian Development Bank. Retrieved 16 August 2017. The World Poverty Clock shows real-time poverty trends in India, which are based on the latest data, of the World Bank, among others. As per recent estimates, the country is well on its way of ending extreme poverty by meeting its sustainable development goals by 2030. According to Oxfam, India's top 1% of the population now holds 73% of the wealth, while 670 million citizens, comprising the country's poorer half, saw their wealth rise by just 1%.
As of 2025, poverty in India declined sharply. According to the World Bank report, extreme poverty fall from 16.2% in 2011-12 to 2.3% in 2022-23. In rural areas it fell from 18.4% to 2.8%, and in urban areas, from 10.7% to 1.1%. 378 million people were lifted from poverty and 171 million from extreme poverty. The main reason, according to the World Bank, is not more opportunities for economic growth but different government welfare programs, like transferring food and money to the people with low income, improving their access to services.
Definition of poverty Poverty is the state of not having enough material possessions or income for a person's basic needs. Poverty may include social, economic, and political elements. Absolute poverty is the complete lack of the means necessary to meet basic personal needs, such as food, clothing, and shelter. Economic measures There are several definitions of poverty, and scholars disagree as to which definition is appropriate for India.Erenstein (2011), Livelihood Assets as a Multidimensional Inverse Proxy for Poverty: A District‐level Analysis of the Indian Indo‐Gangetic Plains, Journal of Human Development and Capabilities, 12(2), pp. 283–302. Inside India, both income-based poverty definition and consumption-based poverty statistics are in use.Krishna & Shariff (2011), The irrelevance of national strategies? Rural poverty dynamics in states and regions of India, 1993–2005. World Development, 39(4), pp. 533–549. Outside India, the World Bank and institutions of the United Nations use a broader definition to compare poverty among nations, including India, based on purchasing power parity (PPP), as well as nominal relative basis.Chandy, L., & Gertz, G. (2011), Poverty in numbers: The changing state of global poverty from 2005 to 2015, Brookings InstitutionTHE DEFINITIONS OF POVERTY The World Bank (2009). Each state in India has its own poverty threshold to determine how many people are below its poverty line and to reflect regional economic conditions. These differences in definitions yield a complex and conflicting picture about poverty in India, both internally and when compared to other developing countries of the world.
According to the World Bank, India accounted for the world's largest number of poor people in 2012 using revised methodology to measure poverty, reflecting its massive population. However, in terms of percentage, it scored somewhat lower than other countries holding large poor populations. In July 2018, World Poverty Clock, a Vienna-based think tank, reported that a minimal 5.3% or 70.6 million Indians lived in extreme poverty compared to 44% or 87 million Nigerians. In 2019, Nigeria and Congo surpassed India in terms of total population earning below $1.9 a day. Although India is expected to meet the United Nations' Sustainable Development Goals on extreme poverty in due time, a very large share of its population lives on less than $3.2 a day, putting India's economy safely into the category of lower middle income economies.
As with many countries,Gordon Fisher, The Development and the history of poverty thresholds Social Security Bulletin, Vol 55, No 4 (Winter 1992), US Government. Retrieved 16 August 2017. poverty was historically defined and estimated in India using a sustenance food standard. This methodology has been revised. India's current official poverty rates are based on its Planning Commission's data derived from so-called Tendulkar methodology.Panagariya & Mukim (2014), A comprehensive analysis of poverty in India. Asian Development Review, 31(1), pp. 1–52. It defines poverty not in terms of annual income, but in terms of consumption or spending per individual over a certain period for a basket of essential goods. Furthermore, this methodology sets different poverty lines for rural and urban areas. Since 2007, India has set its official threshold at 26 a day ($0.43) in rural areas and about 32 per day ($0.53) in urban areas. While these numbers are lower than the World Bank's $1.25 per day income-based definition, the definition is similar to China's US$0.65 per day official poverty line in 2008.Chen and Ravallion, China is Poorer than we Thought, But No Less Successful in the Fight against Poverty Policy Research Working Paper 4621, The World Bank (2008), page 9.
The World Bank's international poverty line definition is based on purchasing power parity basis, at $1.25 per day.Chen & Ravallion (2013), More Relatively‐Poor People in a Less Absolutely‐Poor World, Review of Income, Wealth, 59(1), pp. 1–28.Alkire & Sumner (2013), Multidimensional Poverty and the Post-2015 MDGs, Development, 56(1), pp. 46–51. This definition is motivated by the fact that the price of the same goods and services can differ significantly when converted into local currencies around the world. A realistic definition and comparison of poverty must consider these differences in costs of living, or must be on purchasing power parity (PPP) basis. On this basis, currency fluctuations and nominal numbers become less important, the definition is based on the local costs of a basket of essential goods and services that people can purchase. By World Bank's 2014 PPP definition, India's poverty rate is significantly lower than previously believed.
Mixed, semi-economic and non-economic measures As with economic measures, there are many mixed or non-economic measures of poverty and experts contest which one is most appropriate for India. For example, Dandekar and Rath in 1971 suggested a measure of poverty rate that was based on number of calories consumed.Paul, S. (1989), A model of constructing the poverty line, Journal of Development Economics, 30(1), pp. 129–144 In 2011, Alkire et al. suggested a poverty rate measure so-called Multi-dimensional Poverty Index (MPI), which only puts a 6.25% weight to assets owned by a person and places 33% weight on education and number of years spent in school. These non-economic measures remain controversial and contested as a measure of poverty rate of any nation, including India.Sumner (2004), Economic Well-being and Non-economic Well-being, A Review of the Meaning and Measurement of Poverty, Appleton (2001), 'The Rich Are Just Like Us, Only Richer': Poverty Functions or Consumption Functions?, Journal of African Economies, 10(4), pp. 433–469.
+ National poverty lines comparison(Note: this is historical data, not current)CountryPoverty line(per day)YearReference 32 rupees ($0.5) 2017 481 pesos ($11.81) 2017 6.3 yuan ($1) 2011China issues white paper on poverty reduction China (16 November 2011) 65 naira ($0.4) 2011Federal Republic of Nigeria – Study for Poverty Profile (Africa) JICA Japan (March 2011) Retrieved 16 August 2017. $14the official poverty line in the United States varies with number of people in a household, $13 per day is per person in a family of four 2005 Comparison with alternate international definitions