How India lifted nearly 500 million people out of extreme poverty
Between 2011 and 2023, extreme poverty in India plummeted from 27.1 percent to 2.6 percent, according to a World Bank report.
A new report from the World Bank reveals that India lifted nearly 500 million people out of poverty between 2011 and 2023, representing one of the fastest poverty declines globally. During this period, extreme poverty in the world's most populous nation dropped sharply from 27.1 percent to 2.6 percent, based on an extreme poverty threshold of $3 a day. The only comparable historical parallel is China, which lifted more than 800 million people out of extreme poverty over a span of 40 years. Estimating metrics from three official household surveys, the World Bank noted that 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.
How India managed to reduce poverty
The historic reduction was primarily driven by strong consumption growth, rising employment among women, and expanded social transfers including food subsidies. The World Bank used Household Consumption Expenditure Surveys conducted by the National Sample Survey Organisation to determine these figures. Successive governments in India have implemented various welfare schemes since the country opened its economy in the early 1990s. Prime Minister Narendra Modi's administration currently provides free food grains to about 800 million Indians alongside direct cash transfers, housing, and expanded access to sanitation and piped drinking water. Last month, the World Bank raised India's economic growth forecast to 7.1 percent.
India lifted nearly 500 million people out of extreme poverty between 2011 and 2023.
Despite this remarkable progress, the 2026 World Inequality Report highlights that income and wealth inequality in India remains among the highest in the world. Economists note that while the country has seen a generational rise in opportunity, the absolute number of poor individuals remains high due to the sheer size of its 1.4 billion population. Projections indicate poverty will continue to decline gradually, with the poverty rate at the $4.20 daily line expected to fall from 14.2 percent in 2026 to 12.1 percent by 2028.
Why it matters
This dramatic drop in poverty alters the global landscape of economic development, as India accounts for the largest absolute number of poor individuals worldwide. The progress directly impacts millions of households across India and South Asia by expanding basic living standards, though persistent economic inequality underscores ongoing structural challenges for policymakers.