Poverty in India reduced via tangible boost in household living standards, incomes

Hans India

07-06-2025

New Delhi: The World Bank's revised figures reinforce that poverty in India has reduced not just statistically, but through tangible improvements in household living standards and incomes, according to a government factsheet released on Saturday.
India's poverty decline is a story of technical refinement meeting policy results. In the face of a raised poverty benchmark, India showed that more honest data, not diluted standards, can reveal real progress.
As the global community recalibrates poverty goals, India's example sets a precedent: evidence-based governance, sustained reforms, and methodological integrity can together deliver transformational outcomes, the factsheet read.
The World Bank has announced a major revision to global poverty estimates, raising the International Poverty Line (IPL) from $2.15 per day (2017 PPP) to $3.00 per day (2021 PPP).
While the change led to a global increase in the count of extreme poverty by 125 million, India emerged as a statistical outlier in a positive direction.
Using more refined data and updated survey methods, India not only withstood the raised threshold but also demonstrated a massive reduction in poverty.
The new poverty line would have increased the count of global extreme poverty by 226 million people. But thanks to India's data revision, the net global increase was only 125 million — as India's revised data reduced the count by 125 million on its own, the data showed.
India's latest Household Consumption Expenditure Survey (HCES) adopted the Modified Mixed Recall Period (MMRP) method, replacing the outdated Uniform Reference Period (URP).
This shift used shorter recall periods for frequently purchased items and captured more realistic estimates of actual consumption.
As a result, consumption recorded in national surveys rose, leading to a drop in poverty estimates.
In 2011–12, applying MMRP reduced India's poverty rate from 22.9 per cent to 16.22 per cent, even under the older $2.15 poverty line.
In 2022–23, poverty under the new $3.00 line stood at 5.25 per cent, while under the older $2.15 line, it dropped further to 2.35 per cent.
In 2023–24, the average Monthly Per Capita Expenditure (MPCE) was Rs 4,122 in rural areas and Rs 6,996 in urban areas, excluding the value of items received free through social welfare programmes.
When these are included, the figures rise to Rs 4,247 and Rs 7,078, respectively. This is significant increase from the rural MPCE of Rs 1,430 and urban MPCE of Rs 2,630 in 2011-12.
The urban-rural consumption gap has narrowed from 84 per cent in 2011–12 to 70 per cent in 2023–24, indicating a reduction in consumption disparities between urban and rural households.
All 18 major states reported an increase in average MPCE for both rural and urban areas. Odisha experienced the highest rural increase (about 14 per cent), while Punjab saw the highest urban increase (about 13 per cent).
'The Gini coefficient, a measure of consumption inequality, decreased from 0.266 to 0.237 in rural areas and from 0.314 to 0.284 in urban areas between 2022–23 and 2023–24, suggesting a reduction in consumption inequality across most major states,' according to the factsheet.