Bengaluru, India — India lifted nearly 500 million out of poverty between 2011 and 2023, with extreme poverty dropping from 27.1 percent to 2.6 percent in the world’s most populous nation during the same period, according to a new report by the World Bank. The only other parallel in poverty reduction on this scale is China, which lifted more than 800 million people out of extreme poverty — though that was over a period of 40 years. Yet despite the substantial fall in poverty in India — home to 1.4 billion people — the income and wealth inequality gap has widened significantly since it opened up its economy in the early 1990s.
According to the 2026 World Inequality Report, inequality in India remains among the highest in the world. We take a look at how India managed to almost eradicate extreme poverty, and at the contrast between that accomplishment and the deep economic inequality that remains in the world’s most populous nation: Based on an extreme poverty threshold of $3 a day, the World Bank said extreme poverty in India declined from 27.1 percent to 2.6 percent between 2011 and 2023. Extreme poverty is defined as the minimum amount of money needed to afford basic essentials such as food, water, shelter and clothing.
Estimating poverty metrics based on three official household surveys, the Bank also said that an estimated 496 million people have been lifted out of poverty as the share of India’s population living below the lower middle-income poverty threshold of $4.20 a day fell from 57.7 percent to 16.1 percent. The authors of the report, led by World Bank’s South Asia poverty economist Ayago Wambile, wrote that poverty in India is “projected to continue declining, albeit more gradually with the poverty rate at the $4.20/day line expected to fall from 14.2 percent in 2026 to 12.1 percent by 2028.” “This progress was mainly driven by strong consumption growth, rising employment, especially among women, and expanded social transfers, including food subsidies,” they added. India lifting nearly 500 million out of poverty in 12 years has been lauded as “remarkable progress” by the World Bank.
It added that the downward trend represents “one of the fastest poverty declines in the world.” To determine India’s poverty rates, the World Bank used Household Consumption Expenditure Surveys (HCES) which were conducted by the National Sample Survey Organisation (NSSO), an Indian government body. A 2022 report, jointly produced by the World Bank and the Chinese Finance Ministry, said that China had lifted 800 million people out of poverty, but it took 40 years to achieve. Last month, the World Bank also raised its economic growth forecast for India to 7.1 percent.
In a post on Instagram on Sunday, India’s Prime Minister Narendra Modi lauded the country’s progress in tackling poverty. A generational rise in opportunity,” he said. Last November, the southern state of Kerala, which has been ruled either by the centrist Congress party or a coalition of communist parties since independence, became the first in the country to officially declare itself free from extreme poverty.
Kerala has the best education and health statistics of major Indian states. Santosh Mehrotra, a development economist formerly in India’s planning commission, and currently a visiting professor at the Higher School of Economics in Moscow, noted that India is the only low-middle-income country among G20 nations, which are otherwise upper-middle- or high-income nations. So therefore, if we are going to genuinely reduce the incidence of poverty and more importantly, the absolute number of the poor, then it makes a huge difference globally,” he told Al Jazeera.
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