India’s Historic Decline in Poverty: Second Only to China
India has scripted one of the most remarkable success stories in the global fight against poverty. According to a 2025 report by the World Bank, the proportion of Indians living below the international poverty line fell from 27.1% in 2011-12 to just 5.3% in 2022-23. This translates to nearly 26.9 crore people being lifted out of poverty in just over a decade. In terms of absolute numbers, this is the second-largest poverty reduction in human history, trailing only China.
This milestone is not just a statistic; it is a profound social transformation. In a country where nearly one in three citizens lived in poverty just over a decade ago, today only about 7.5 crore people are below the global poverty line. India’s journey is unique, not only in scale but also in the method of achieving it—through democratic governance, targeted welfare programs, and technology-led interventions.
Understanding the Numbers
The World Bank defines poverty under two global benchmarks:
- $2.15/day (extreme poverty)
- $3.00/day (moderate poverty)
These are adjusted for purchasing power parity (PPP) to account for differences in cost of living.
From Crores to Millions:
- 2011-12: 34.4 crore people (27.1%) lived below $3/day
- 2022-23: 7.5 crore people (5.3%) remained below that line
- Under $2.15/day (extreme poverty), the rate dropped from 16.2% to 2.3%, or about 3.2 crore people
These figures are based on the 2022-23 National Sample Survey and were validated by the World Bank, adding to their credibility.
What Made This Possible?
India’s poverty reduction wasn’t accidental. Several targeted policies, programs, and governance innovations worked together to transform the economic lives of millions:
1. Direct Benefit Transfers (DBT):
The JAM Trinity (Jan Dhan bank accounts, Aadhaar biometric ID, and Mobile numbers) enabled direct deposit of subsidies into beneficiaries’ accounts. This minimized leakages, ensured timely help, and empowered the poor with digital access.
2. Food Security Initiatives:
The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) ensured that over 80 crore people received free food during the COVID-19 pandemic, which prevented a massive hunger crisis and kept poverty levels stable.
3. Welfare Schemes:
Flagship schemes like Ujjwala (LPG cylinders for poor women), PM Awas Yojana (rural housing), Swachh Bharat (toilets), and Ayushman Bharat (health insurance) directly improved living conditions for the economically disadvantaged.
4. Digital Governance:
Technology played a vital role. From digital payments (like UPI) to vaccine platforms (Co-WIN), India ensured even the poorest could access services. This improved efficiency and transparency in welfare distribution.
Global Recognition
India’s feat is drawing admiration from international organizations. The World Bank, IMF, and UNDP have all recognized India’s success in reducing poverty through inclusive and scalable means.
According to the UNDP’s Multidimensional Poverty Index:
- 2005-06: 53.8% of Indians were in multidimensional poverty
- 2019-21: Dropped to 16.4%
- 2022-23: Further declined to 15.5%, or around 21 crore people
Multidimensional poverty includes not just income, but access to education, healthcare, sanitation, housing, and drinking water.
Regional Impact
Progress has been especially strong in traditionally poor states like Uttar Pradesh, Bihar, Maharashtra, West Bengal, and Madhya Pradesh. These five states accounted for over 65% of India’s poor in 2011 but also made up nearly two-thirds of those lifted out of poverty by 2023.
Rural poverty dropped from 18.4% to 2.8%, while urban poverty fell from 10.7% to 1.1%. This shows balanced progress across different geographies.
How Reliable Is the Data?
It’s natural to ask: Are these numbers credible?
✔ Data Source:
- The estimates are based on the 2022-23 Household Consumption Expenditure Survey by India’s NSO (National Statistical Office).
- The survey had a robust sample size of 1.2 lakh households and followed global statistical standards.
⚠ Margin of Error:
While no survey is perfect, the estimated margin of error is around ±0.5%. Some small discrepancies may arise due to:
- Underreporting of informal income
- Exclusion of transient urban poor or homeless
- Sampling challenges in conflict or border zones
But even accounting for this, the overall trend remains historically significant.
India vs. China: A Global Comparison
India’s achievement ranks second only to China in terms of people lifted out of poverty:
| Country | Time Period | People Lifted from Poverty |
|---|---|---|
| China | 1981-2015 | 75-80 crore |
| India | 2011-2023 | ~27 crore |
China:
- Relied on mass urbanization and manufacturing-led growth
- Achieved poverty reduction with centralized state control
- Took nearly 30 years to eradicate extreme poverty
India:
- Achieved it in 11 years
- Within a democratic framework
- With large-scale welfare rather than mass relocation
This makes India’s journey more applicable as a model for other democratic nations.
The Contrast with Pakistan
While India’s poverty rate dropped to 5.3%, Pakistan is facing a worsening crisis:
- 45% of Pakistan’s population lives below the updated poverty line (approx. 10.5 crore people)
- Under the stricter $3/day benchmark, 16.5% of Pakistanis are extremely poor (around 3.8 crore)
- UNDP estimates 38.3% face multidimensional poverty
Economic instability, political turmoil, inflation, and weak welfare structures are key factors. In contrast to India’s progress, Pakistan’s poverty numbers have worsened over the past decade.
The Road Ahead for India
While India’s progress is undeniable, challenges remain:
- 7.5 crore Indians still live in monetary poverty
- 21 crore face multidimensional deprivation
- Issues like youth unemployment, urban slums, and educational access must now take center stage
India’s future lies not just in eradicating poverty but enabling upward mobility, job creation, and access to quality services. The goal should now shift from survival to prosperity.
Conclusion
India has delivered the second-largest and fastest reduction in poverty in world history—lifting 27 crore people above the poverty line in just over a decade. It did so not by replicating China’s centralized model, but through democratic, digital, and welfare-driven strategies.
With strong institutions, scalable technology, and inclusive policymaking, India has shown that even the world’s largest democracy can engineer a historic transformation. The journey ahead is long, but the foundation is solid. For the first time in modern history, poverty is no longer India’s defining crisis — and that changes everything.
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