India Poverty Rate 2025 Falls to 5.3 Percent Says World Bank

India poverty rate 2025 India poverty rate 2025
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India poverty rate 2025 falls to 5.3 percent as per World Bank, showing major improvement in extreme poverty reduction through welfare schemes and rural development.

Overview: A Remarkable Decline

Recent data from the World Bank reveals a noteworthy decline in India’s extreme poverty rate—from 27.1% in 2011–12 to just 5.3% in 2022–23 Despite the Bank raising its international threshold from $2.15 to $3 per day, this decline indicates a stronger-than-expected reduction under stricter poverty measures

How Many Lives Were Changed?

In absolute numbers, the count of those living in extreme poverty shrank from approximately 344.5 million in 2011–12 to 75.2 million in 2022–23—a fall of nearly 269 million people This achievement constitutes one of the fastest poverty alleviation records globally in recent decades.

State-Level Contributions

Major states such as Uttar Pradesh, Bihar, Maharashtra, West Bengal, and Madhya Pradesh—which had nearly 65% of India’s poverty in 2011—contributed to roughly two-thirds of this decline While both rural and urban regions experienced progress, the rural rate dropped from 18.4% to 2.8%, and urban from 10.7% to 1.1%, narrowing the rural-urban gap significantly

The Role of Revised Poverty Lines

The World Bank updated its extreme poverty benchmark in mid‑2025 to $3/day (2021 PPP), reflecting inflation and purchasing power shiftsDespite a tougher threshold, India’s rate continued its downward trend, emphasizing real gains rather than statistical artifacts.

Factors Fueling the Decline

Key drivers include free and subsidized food programs (e.g., PMGKAY), which fortified food security amid economic hardship expanded digital services like DBT and Jan Dhan accounts; rural infrastructure investments; and health and housing schemes like Ayushman Bharat and PM Awas Yojana

Challenges Ahead

While major strides have been made, concerns remain. A small population of 75 million still experiences extreme poverty. Moreover, income inequality, regional disparities, and vulnerability to economic shocks (e.g., global inflation) pose ongoing risks .


India poverty rate 2025
India poverty rate 2025

📌 Why This News Is Important

Relevance to Government Exams

Exam aspirants for UPSC, State PSCs, SSC, Banking, and other government exams often face questions on poverty metrics, developmental policy, and social welfare programs. This update provides fresh data and empowers candidates to craft informed answers.

Economic Indicators in Focus

This shift demonstrates the country’s macroeconomic health, structural transformations, and poverty alleviation efforts. Candidates who can analyze PPP adjustments, rural-urban inequalities, and welfare interventions will stand out.

Contemporary Policy Highlights

Programs like PMGKAY, DBT, and Jan Dhan occupy important syllabus areas like governance, social justice, and public policy. Success stories and statistical proof bolster candidates’ essay-writing, interviews, and policy comprehension.


🕰 Historical Context: Tracing India’s Poverty Journey

Post-Independence to 1990s

Early policies emphasized food security and state-led models. But poverty remained widespread, necessitating structural reforms.

Economic Liberalization (1991 Onward)

With liberalization, India saw accelerated growth—yet, the impact on poverty was gradual, requiring direct welfare initiatives.

2000–2010: Welfare Expansion

The launch of MNREGA, PDS scaling, and targeted rural development yielded initial poverty reduction, though significant inequality persisted.

2010–2020: Wealth of Programs

The government introduced Jan Dhan Yojana, PM Awas Yojana, PM Ujjwala, Ayushman Bharat, and DBT—strengthening poor households’ access to finance, housing, energy, and health.

Post-2020: Pandemic Response

During COVID‑19, through Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), the government provided over 5 kg of free food grains per person monthly to nearly 800 million—preventing a spike in extreme poverty


📊 Key Takeaways from “India’s Extreme Poverty Rate Falls to 5.3% in 2022–23”

No.Key Takeaway
1Sharp Decline: Extreme poverty in India dropped from 27.1% (2011–12) to 5.3% (2022–23) even after raising the poverty threshold to $3/day
2Millions Lifted Out: Around 269 million people moved above the extreme poverty line during the period .
3Rural‑Urban Gap Narrowed: Rural poverty fell to 2.8% and urban to 1.1%, showing balanced improvement .
4Food Security Crucial: Free and subsidized food distribution, such as PMGKAY, played a major role in reducing poverty .
5State Contributions: States like UP, Bihar, Maharashtra, West Bengal, and MP—initial hotspots—saw significant poverty reduction, contributing two‑thirds to the national improvement .

FAQs: Frequently Asked Questions

1. What is the current extreme poverty rate in India as per the World Bank’s 2022–23 report?

India’s extreme poverty rate stands at 5.3% in 2022–23 according to the World Bank.

2. What is the updated threshold used by the World Bank to define extreme poverty?

The World Bank revised its extreme poverty threshold to $3 per day (2021 PPP) from the earlier $2.15/day standard.

3. Which states contributed most to the decline in poverty?

Major contributors include Uttar Pradesh, Bihar, Maharashtra, West Bengal, and Madhya Pradesh, accounting for over two-thirds of the national decline.

4. What were the main factors behind India’s poverty reduction?

Key factors include food security programs like PMGKAY, digital financial inclusion through DBT and Jan Dhan, health coverage via Ayushman Bharat, and housing schemes like PMAY.

5. How has rural poverty improved compared to urban poverty?

Rural poverty declined from 18.4% to 2.8%, while urban poverty dropped from 10.7% to 1.1%, narrowing the gap between the two.

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