The World Bank has just issued a two page Poverty and Equity Brief with regard to India dated October 2026. The measurement of poverty is not merely economic; it is an intensely poltical and social exercise. The World Bank may not be the last word on the subject, yet it is arguably dispassionate and lends itself to easy comparison with other countries. For this reason, any report from the World Bank on poverty and equity deserves careful scrutiny.
The main thing in the report that has grabbed the attention of the press are the following statements:
>Over the past decade, India has made remarkable progress in reducing poverty across both monetary and non-monetary dimensions, recording
one of the fastest poverty declines in the world.
>Between 2011 and 2023, the share of the population living below the Lower Middle-Income Country line ($4.20/day, 2021 PPP) fell from 57.7 percent to 16.1 percent, lifting an estimated 496 million people out of poverty.
>Extreme poverty ($3.00/day) declined from 27.1 percent to 2.6 percent during the same period.
A word on international poverty (extreme) line, lower Middle-Income class poverty line and Upper Middle-Income class poverty line as defined by the World Bank in 2023. Extreme poverty line is defined as $ 3 a day per person and by this measure it would appear that India has indeed made great strides by bringing down the percentage from 27.1 per cent to 2.6 per cent. India may be commended for this achievement. But the fact of the matter is that this criterion is often used with reagrd to Least Developed Countries, which India most certainly is not.
Since India is already a lower Middle-Income country, the relevant poverty line should be $ 4.20 a day per person. Viewed from this perspective, the World Bank report says between 2011 and 2023, poverty rate in India fell from 57.7 per cent to 16.1 per cent. This is no mean achievement and we can pat ourselves on our backs for this. But several caveats are in order:
>$ 4.20 dollars may seem a lot, but Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) which has now been replaced by Viksit Bharat -Guarantee for Rozgar and Ajeevcika Mission Act, 2025, has a wage floor of Rs 300 per day which then goes up to Rs 450 per day. In other words, $ 4.20 (Rs 480) cannot be considered anything other than a subsistence wage in many parts of the country.
>There is also a real danger that a large number of Indians are just above this poverty line and the danger of them slipping below the line is really high. So, this 16.1 per cent while seemmingly low, may actually be misleading.
>There is perhaps one good measure of Viksit Bharat in addition to cumulative GDP and per capita GDP. That is to measure how many people are below the upper Middle-Income class poverty line which is defined as $ 8.30 a day per person. The statistic provided by the World Bank in this regard for India is damning. It says some 80 per cent repeat 80 per cent of the population would be below this poverty line of $ 8.30. While $ 8.30 may sound like a lot, actually it is Rs 830 a day per person and monthly pay works out to about Rs 25,000/ which is by no means extravagant. In other words, 80 per cent of Indians earn less than Rs 25,000/ per month. It is this percentage that needs to be brought down to something like 20 per cent, if India is to become “Viksit” by 2047.
> The other unsurprising thing in the World Bank report is the fact that many of the households that remain poor continue to live in rural areas, where productivity is lower and access to higher-quality non-farm employment opportunities remain more limited.
>The World Bank report also demonstrates that poverty has also become increasingly concentrated geographically. While living standards improved across most states, households in a contiguous belt stretching from Uttar Pradesh to West Bengal account for about 57 percent of India’s poor population. As a result, further reductions in national poverty will increasingly depend on creating productive employment in these states.
>It is also true that poverty will henceforth fall more gradually in India compared to before. Thus the poverty rate at the $4.20/day line is expected to fall from 14.2 percent in 2026 to 12.1 percent by 2028, a fall of only 2 per cent over two years.
>Income disparity remains pronounced, as median earnings among the top 10 percent of workers were about 13 times those of the bottom 10 percent in 2023.
India has its job cut out. We need not only high and rapid economic growth, but also growth that is inclusive, which is made possible only by sufficient job generation in the non-farm sector.
Dr Mohan Kumar is a former Indian Ambassador to France who is currently Dean/Professor at O.P. Jindal Global University. Views are personal.
