Deepak Dwivedi
INDIA’S recent ascent as the world’s fourth-largest economy has generated headlines. This is a milestone indeed but, perhaps the more remarkable achievement lies not in overtaking Japan in GDP terms, but in sharply reducing poverty over the past decade. India is experiencing an unseen economic revolution, one not always reported by stock markets or quarterly GDP figures, but by a more fundamental measure of the living standards of its citizens. According to the latest Household Consumption Expenditure Survey by the National Statistics Office, the national poverty rate plummeted from 29.5 per cent in 2011-12 to just 4.9 per cent in 2023–24.
The World Bank echoes this, noting extreme poverty fell from 16.2 per cent to 2.3 per cent, lifting more than 170 million people out of destitution. According to the World Bank’s Spring 2025 Poverty and Equity Brief, India has lifted 171 million out of extreme poverty. It also made strong gains in poverty reduction at the lower-middle-income level – measured at $3.65 per day – which fell from 61.8 pc to 28.1 pc, lifting 378 million out of poverty. The latest estimates, coming in the backdrop of intense trade and terror tensions, sprinkle some much-needed stardust on the macroeconomic front. These estimates conform to the 2020 IMF working paper, which projected poverty rate at 2.5 per cent.
The pace of poverty reduction was particularly notable in the five most populous states – Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh. These accounted for 65 pc of India’s extreme poor in 2011-12; and contributed to two-thirds of the overall decline in extreme poverty by 2022-23. Even more striking is the fact that poverty halved in just the last year – from 9.5 pc in 2022– 23 to 4.9 pc in 2023–24.
The sharp decline in both extreme and lower-middle-income poverty, along with the narrowing rural-urban poverty gap reflects the Government’s effective measures. Free and subsidised food transfers supported poverty reduction. Through targeted welfare schemes, economic reforms, and increased access to essential services, India made substantial strides in reducing poverty levels.
India is well on the way to winning the war on poverty, but more efforts are needed to sustain the momentum and make this victory comprehensive. The challenge is that India’s anti-poverty architecture remains largely static – designed to identify and support the chronically poor based on data updated every decade. But in a fast-changing economy, such an approach falls short. What the country needs is a nimble, real-time safety net that can respond to transient poverty as it emerges. This means not just better data systems, but also more adaptive welfare design. Progressive taxation – particularly on capital gains and wealth – can fund such systems. So can investments in universal basic infrastructure. Relying primarily on targeted schemes may no longer suffice. A shift toward universal entitlements, such as quality public healthcare and free school education, could both reduce inequality and prevent people from slipping back into poverty.
For that, policy must move beyond the optics of rankings and global comparisons. The real question is whether India’s anti-poverty strategy is future-ready. A focus on dynamic targeting, improved public provisioning, especially in health and education, and a commitment to addressing inequality will be key to India achieving its 2047 vision.
