India's extreme poverty rate drops from 27.1% to 2.6% but....
What's the story
India's extreme poverty rate has dropped to 2.6% in 2023 from the 27.1% recorded in 2011, according to the World Bank's October 2026 Poverty and Equity Brief. The report said the proportion of people living below the lower-middle-income poverty line of $4.20 per day, measured at 2021 purchasing power parity (PPP), fell from 57.7% to 16.1% during the period. The World Bank described the progress as "one of the fastest poverty declines in the world."
Income inequality
Gini index at 23.0 in 2023
The World Bank has projected that poverty rates will continue to decline, albeit at a slower pace.
By 2028, the poverty rate at the $4.20-a-day threshold is expected to fall from 14.2% in 2026 to 12.1%.
However, these estimates are based on microsimulations and could change with new labor market and macroeconomic data.
Wage
Top 10% earn 13 times more
While there has been a decline in extreme poverty, wage disparities remain stark.
"Wage disparities, however, remain pronounced, as median earnings among the top 10 percent of workers were about 13 times those of the bottom 10 percent in 2023," the World Bank said.
The report also points out persistent regional and employment-related challenges.
A large chunk of the country's poor population, around 57%, is concentrated in a contiguous belt from Uttar Pradesh to West Bengal.
Multidimensional poverty
Decline in multidimensional poverty
The World Bank also noted a decline in poverty across non-monetary measures.
The Oxford Poverty and Human Development Initiative's Multidimensional Poverty Index showed a drop from 53.8% in 2005-06 to 16.4% in 2019-21.
The World Bank's own multidimensional poverty measure stood at 15.5% for the period of 2022-23, further highlighting the improvement in living conditions for many Indians over the years.
Economic progress
Concerns over quality of employment, stagnant real earnings
The World Bank credited India's poverty reduction to strong consumption growth, rising employment (especially among women entering paid jobs, which helped boost household incomes), and increased social transfers like food subsidies.
Between 2017 and 2023, employment grew by around 134 million people, nearly double the working-age population's growth.
However, the report also raised concerns over the quality of employment and stagnant real earnings.