India’s Poverty Decline Is Among the Fastest Globally

Syllabus: GS3/ Economy

Context

• A World Bank report titled India Poverty and Equity Brief: October 2026, India has achieved one of the fastest poverty declines in the world.

India’s Progress in Poverty Reduction

• Decline in extreme poverty: The proportion of the population living below the international extreme poverty line of $3 per person per day (measured in 2021 purchasing power parity) declined from 27.1% in 2011 to 2.6% in 2023.
• Poverty measured against the Lower Middle-Income Country poverty line of $4.20 per person per day declined from 57.7% to 16.1% between 2011 and 2023, lifting an estimated 496 million people out of poverty.
  • It expects poverty (measured against the $4.20-a-day threshold) to decline further—from 14.2% in 2026 to 12.1% by 2028. 

Key Drivers of Poverty Reduction

• Expansion of employment: Employment increased by approximately 134 million people between 2017 and 2023, nearly twice the growth in the working-age population.
• Greater participation of women: Increased participation of rural women in paid employment has raised household earnings and the number of income earners per family.
• Expansion of social protection: Food subsidies and other government transfers helped protect vulnerable households from economic shocks and improve their consumption levels.
• Greater access to essential facilities such as electricity, sanitation, drinking water and housing has contributed to reducing non-monetary deprivation.

Initiatives Taken by the Government

• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): The scheme aims to provide industry-relevant skill training to youth in order to improve employability and enhance job opportunities.
• National Food Security Act (NFSA), 2013: It gives legal entitlement to 67% of the population (75% in rural areas and 50% in urban areas) to receive highly subsidized foodgrains.
• Ayushman Bharat scheme: It offers health insurance coverage of up to ₹5 lakh per family per year to shield beneficiaries from the financial burden of expensive medical treatments.
• Right to Education Act (RTE): The RTE Act, enacted in 2009, provides free and compulsory education for children between 6 and 14 years. 
• Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM): It aims to reduce poverty by enabling the poor household to access gainful self-employment and skilled wage employment opportunities.

Persistent Challenges Despite Poverty Reduction

• Regional concentration: Poverty is increasingly concentrated geographically, with states in the contiguous belt stretching from Uttar Pradesh to West Bengal accounting for approximately 57% of India’s poor population.
• Widening wage disparities: Median earnings among the top 10% of workers were approximately 13 times those of the bottom 10% in 2023.
  • This indicates that employment growth has not necessarily translated into equitable income distribution.
• Youth unemployment increased from 14.6% to 15.9% between the first quarters of FY2026 and FY2027.
• Low-productivity employment: Much of the employment growth was concentrated in relatively low-productivity activities, limiting improvements in household income and living standards.

Way Ahead

• Strengthen labour-intensive sectors such as textiles, food processing, tourism and construction to generate productive and sustainable livelihood opportunities.
• Address structural inequalities: Reduce regional disparities through targeted investments in infrastructure, human capital and industrial development in poverty-concentrated regions.
• Strengthen regular household consumption surveys and multidimensional poverty assessments to identify emerging vulnerabilities and improve policy targeting.

Source: TH