India lifted nearly 500 million people out of poverty between 2011 and 2023
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims + Mains·
Poverty reduction vs wealth inequality: a key GS3 economic development and social justice case study.
Why in news
The World Bank reported that India lifted nearly 500 million people out of poverty between 2011 and 2023, while highlighting a widening wealth inequality gap.
Background
Extreme poverty in India fell from 27.1% to 2.6% between 2011 and 2023 based on a $3 a day threshold. The share of the population below the $4.20 a day lower middle-income threshold dropped from 57.7% to 16.1%.
Facts for Prelims
- FactIndia lifted approximately 496 million people out of poverty between 2011 and 2023.
- FactExtreme poverty threshold used by the World Bank in this report is $3 a day.
- FactLower middle-income poverty threshold is defined as $4.20 a day.
- Report / IndexThe 2026 World Inequality Report states India's inequality remains among the highest in the world.
- FactProjected poverty rate at the $4.20/day line is expected to fall from 14.2% in 2026 to 12.1% by 2028.
Prelims practice question
With reference to poverty thresholds in India as reported by the World Bank, consider the following statements:
- The extreme poverty threshold used in the report is $4.20 a day.
- India lifted approximately 200 million people out of poverty between 2011 and 2023.
- The share of the population below the lower middle-income threshold dropped from 57.7% to 16.1%.
Which of the statements given above is/are correct?
- (a)3 only
- (b)1 and 3 only
- (c)2 and 3 only
- (d)1, 2 and 3
Show answer
Answer: (a) 3 only — Statement 3 is correct. Statement 1 is incorrect: The extreme poverty threshold is $3 a day. Statement 2 is incorrect: India lifted nearly 500 million people out of poverty.
For Mains
Q. Discuss the paradox of rapid poverty reduction alongside widening wealth inequality in India's economic trajectory since the 1990s.
Dimensions to cover in your answer
- Structural disparity: Concentration of wealth in top deciles despite significant gains in absolute poverty reduction.
- Policy trade-offs: Balancing consumption-led growth with inclusive mechanisms to bridge the widening income gap.
- Social safety nets: Role of food subsidies and social transfers in achieving large-scale poverty alleviation.
Keywords: poverty alleviation · income inequality · consumption growth · social transfers · economic disparity · middle-income threshold
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