World Bank Says India Lifted Nearly 500 Million from Poverty, but Many Remain One Shock from Falling Back
The World Bank says India has pulled record numbers of citizens out of poverty, but millions among them are one shock away from being thrust back into destitution.
A recent World Bank report says India lifted nearly 500 million people out of poverty between 2011 and 2023, with extreme poverty dropping from 27.1 percent to 2.6 percent during the period.
The only comparable poverty-reduction effort on this scale was achieved by China, which lifted more than 800 million people out of extreme poverty over four decades.
India, the world's most populous country, no longer counts its poor. It has not published an official consumption-based poverty estimate in more than a decade. That leaves the World Bank to provide internationally comparable estimates, using newer consumption surveys and its own poverty thresholds.
Several economists have said India's achievement is significant, and that the World Bank's mechanism for calculating these numbers is beyond reproach, even as they have argued that the planet's most populous nation still has a long way to go before it can claim to have defeated poverty. Other economists have questioned the World Bank's sweeping conclusions and India's unwillingness under Prime Minister Narendra Modi's government to carry out its own poverty estimates.
In Rajsamand, Rajasthan, Hema Prajapat, 25, says even "thorns growing inside her stomach" would not hurt as much as hunger does. By the end of each month, her kitchen shelves are empty; her husband, Hari Prajapat, sinks deeper into debt; and an increasing share of their food supplies is set aside for their nine-year-old son, Divyansh. But Hema's family is no longer poor — at least on paper.
She spends 11,000 rupees ($117) a month on her household of three. That is about 49 percent more than the roughly 7,380 rupees ($78) monthly threshold for a family of that size, based on the World Bank's poverty line.
"This poverty line, this bar, is very low. No person can live a dignified life [on this amount]," Hema said. "Did they even get out of their AC cars?" she asked, taking a dig at the officials who prepared the report for the World Bank.
Hema was 11 when she was married off to a man who belongs to a family of traditional clay-pot makers in Rajsamand district. When pot sales could no longer meet their financial needs, her husband, Hari, started a street food stall selling pani puri, a popular Indian snack. That did not last long because of the pandemic. For the past year, she has been cleaning houses and washing utensils in the neighbourhood for 5,000 rupees ($53) a month, but the deprivation did not end. "We have to buy every single thing from the market," she said. The family has no agricultural land.
"Since I started working, our home has seen some comfort, but the money is now vanishing faster, and we are even more in debt," Hema said. "The prices have multiplied in recent years, and whatever we earn falls short."
The World Bank pointed to rising female labour force participation as one of the factors behind India's improving poverty rates, although women's access to secure and adequately paid employment remains a challenge. The Bank also noted that the Indian government's provision of free or subsidised foodgrains to nearly 800 million citizens every month under its national food-security programme has helped tackle extreme poverty.
But a rising cost of living has meant that government subsidies and handouts are racing against growing economic pressures on families like Hema's. India's overall consumer prices rose by at least 51 percent between September 2016 and September 2025, according to the government's Consumer Price Index. Wage rises in this period have not kept pace.
Some government schemes help, such as public schools for children or state-run hospitals that provide free or subsidised healthcare. But Hema says free healthcare does not inspire much confidence in people. When her son Divyansh had a bad cold and the flu two months ago, she rushed him to a private hospital as waiting times at public hospitals are often longer, with crowded wards, overstretched doctors and limited resources. "I was scared for him. His fever was getting worse," she said. Treatment at the private hospital cost Hema about 6,000 rupees ($64) — more than what she makes in a month. "I do not want my son to get used to private hospitals or their drugs. I cannot take him to one every time," she said.
Santosh Mehrotra, a developmental economist in New Delhi, said the poverty threshold in India is too low. All it takes is "one shock" to be pushed back into it, he said. "That shock could be a pandemic, drought, flood, or even a wedding." Mehrotra, who previously worked with the government on rural economies and poverty, also said the threshold is problematic because it does not draw a distinction between the rural and the urban populations despite their different realities.
Hema's neighbour Sushila Salvi received one such shock. In December last year, Salvi, 31, realised she was pregnant again — her second child after a gap of 14 years. Salvi did not trust government hospitals and wanted to get all her treatment at a private clinic. Over the previous eight years, she had learned makeup skills and opened a small, one-seater salon in Kankroli, a small town in Rajsamand, and had been saving for her 14-year-old daughter's higher education; the daughter currently goes to a government school. But maternal care cost her nearly 65,000 rupees ($695) and drained her savings, and she had to pull her daughter out of extra tuition classes that cost 600 rupees ($6) a month.
Seema Kumar, 37, lives on the outskirts of New Delhi and spends 20,000 rupees ($214) on her family of three. She turns to loans when expenses spiral, such as during a festival or her 17-year-old son's birthday. As India celebrated Diwali last week and people burst firecrackers, air quality in New Delhi — one of the world's most polluted cities — hit a record. The next morning, as dense and toxic smog hung over the city, all three members of Seema's family left for work. By evening, her son had developed a sore throat, everyone in the family had a runny nose, and Seema went to bed with a terrible headache. "I could not buy a mask for my son, and they say I am not poor any more," Seema said.
Back in Rajsamand, as Hema swept the garden in her neighbourhood, she called Hari, reminding him that their child was due for a routine medical checkup that day. Hari said he could not afford to refill petrol any more due to the increase in oil prices caused by the conflict in the Middle East. Hema offered to refill his motorcycle's tank to go to the nearest hospital. "My only hope is that my son makes something out of his life," said Hema. "If I do not work for a single day — let alone a month — we can go back to the days of extreme poverty and deprivation."
India, home to 1.4 billion people, is one of the fastest-growing global economies — the fourth-largest by nominal gross domestic product (GDP) — despite repeated recent shocks including the COVID-19 pandemic and the ongoing wars in Ukraine and the Middle East. It is also one of the world's most unequal countries, with the top 1 percent of its population owning 40 percent of its wealth — a concern highlighted in the World Bank report as well.
