Current Poverty Levels in India: An Analysis

Measuring poverty in a country of over 1.4 billion people is never a simple task. The numbers shift based on the yardstick used, the data collected, and the time period measured. Yet, understanding where India stands today on poverty is crucial for shaping policies that affect millions of lives. From consumption-based estimates to multidimensional assessments, the current picture is a mix of remarkable progress and lingering challenges that deserve a closer look.

The last official poverty estimate and why it still matters
Why a decade-old estimate held relevance
The multidimensional poverty lens
Progress captured in the 2023 MPI review
The COVID-19 disruption
The cushioning role of social safety nets
Recent estimates suggest a dramatic turnaround
The vulnerable groups that remain at risk
Methodological debates and data challenges
The policy and political dimension
The road to 2030 and beyond
Challenges that demand attention

The last official poverty estimate and why it still matters

India’s most recent official poverty estimate dates back to 2011-12, when the figure stood at 21.92% of the population, based on the Tendulkar Committee methodology. This translated to roughly 269 million people living below the poverty line at that time. According to available records on India’s poverty methodology, this estimate used consumption expenditure as the primary indicator, setting different thresholds for rural and urban areas.

For over a decade, this figure remained the official reference point. The Household Consumer Expenditure Survey of 2017-18 was scrapped by the government citing data quality issues, leaving a significant gap in official statistics. It was only in February 2024 that the Ministry of Statistics and Programme Implementation released the Household Consumption Expenditure Survey for 2022-23, offering fresh data after more than a decade.

Why a decade-old estimate held relevance

In the absence of fresh consumption surveys, researchers, international bodies, and policymakers leaned on the 2011-12 baseline to project subsequent poverty trends. Institutions like the World Bank relied on alternative data sources, such as the Consumer Pyramids Household Survey conducted by the Centre for Monitoring Indian Economy, to fill the gap. This reliance on unofficial data created inconsistencies and debates about the true state of poverty in the country.

The multidimensional poverty lens

Recognising that income alone cannot capture the full experience of deprivation, NITI Aayog developed the National Multidimensional Poverty Index (MPI). This measure looks beyond money to assess deprivations across three dimensions: health, education, and standard of living, using 12 indicators aligned with the Sustainable Development Goals.

The first Baseline Report published in November 2021 used data from the National Family Health Survey (NFHS-4, 2015-16) and found that 24.85% of the population was multidimensionally poor. This figure broadly echoed the 2011-12 consumption-based poverty estimate, lending credibility to both approaches.

Progress captured in the 2023 MPI review

The second edition of the National MPI, released in July 2023, presented a significantly improved picture. Based on NFHS-5 data (2019-21), the headcount ratio of multidimensional poverty fell to 14.96%, down from 24.85% in 2015-16. This meant approximately 135 million people escaped multidimensional poverty during this five-year period.

The intensity of poverty, which measures the average deprivation experienced by the poor, also reduced from 47.14% to 44.39%. Rural areas saw the fastest decline, with multidimensional poverty falling from 32.59% to 19.28%, while urban areas saw a drop from 8.65% to 5.27%. States like Uttar Pradesh, Bihar, and Madhya Pradesh registered the largest reductions in absolute numbers.

The COVID-19 disruption

Just when poverty numbers were trending downward, the pandemic arrived as a devastating setback. The economic contraction of 2020, combined with prolonged lockdowns, pushed many households back into hardship. The World Bank’s Poverty and Shared Prosperity 2022 report estimated that the number of poor people in India rose by somewhere between 23 million and 56 million in 2020, depending on the method of estimation.

Globally, the pandemic pushed around 71 million people into extreme poverty in 2020, and nearly 56 million of them were Indians, according to the same report. This marked the first increase in Indian poverty figures since 2011. Some earlier projections had suggested that between 150 and 199 million additional people could fall into poverty by the end of 2021 if recovery was slow.

Despite the severity of the shock, India’s social safety architecture played a crucial role in softening the blow. An IMF working paper on pandemic poverty noted that the expansion of India’s food subsidy programme, particularly the Pradhan Mantri Garib Kalyan Anna Yojana, absorbed a major part of the pandemic shock and prevented a sharper spike in extreme poverty. The paper highlighted that such programmes provided a form of insurance that helped keep extreme poverty contained during one of the largest exogenous shocks in recent history.

Recent estimates suggest a dramatic turnaround

More recent assessments paint a picture of rapid recovery and further poverty reduction. A research report by the State Bank of India in 2024 estimated that national poverty rates had dropped to between 4% and 4.5%, based on the Household Consumption Expenditure Survey for 2022-23. Rural poverty reportedly fell to 4.86% in FY24, down from 25.7% in FY12, while urban poverty declined to 4.09% from 13.7% over the same period.

The World Bank’s Spring 2025 Poverty and Equity Brief also reflected this trajectory. At the extreme poverty line of $2.15 per day, India’s rate fell from 16.2% in 2011-12 to 2.3% in 2022-23. At the broader lower-middle-income line of $3.65 per day, poverty declined from 61.8% to 28.1%, lifting an estimated 378 million people out of poverty during this period. The gap between rural and urban poverty also narrowed considerably.

The vulnerable groups that remain at risk

Even with this progress, pockets of vulnerability persist. Data from tracking platforms like the World Poverty Clock have historically shown that women and children bear a disproportionate share of extreme poverty. The 0-19 age group tends to be particularly affected, as poverty in early years has long-lasting effects on education, nutrition, and future earning potential. Tribal communities, Scheduled Castes, and residents of specific states like Bihar, Jharkhand, and Meghalaya continue to show higher-than-average deprivation across multidimensional indicators.

Methodological debates and data challenges

The journey of measuring poverty in India is not without controversy. Different committees have proposed different methodologies over the years. The Lakdawala Committee of 1993 based poverty on calorie intake, while the Tendulkar Committee of 2009 shifted to a consumption-basket approach. The Rangarajan Committee of 2014 reintroduced separate rural and urban poverty lines with state-specific estimates, though its recommendations were never formally adopted as the official measure.

The shift in survey recall periods has also affected comparability. The 2022-23 survey exclusively used the Modified Mixed Reference Period (MMRP), which differs from the Mixed Reference Period (MRP) used for the 2011-12 official poverty rate calculations. As the World Bank noted in its 2024 report, the methodological changes in the latest survey need to be examined carefully before drawing direct comparisons with past estimates.

The policy and political dimension

Numbers on poverty carry political weight. Claims of rapid reduction can be celebrated as policy success, while critics often point to methodological issues or question whether the official poverty line is set too low to capture genuine deprivation. The discontinuation of the 2017-18 consumer expenditure survey added fuel to this debate, raising concerns about transparency and the availability of reliable data for public scrutiny.

The road to 2030 and beyond

India has committed to Sustainable Development Goal 1.2, which aims to halve poverty in all its dimensions by 2030. The government has set an even more ambitious goal of eradicating extreme poverty by that date. Based on the progress shown in the MPI reports, a NITI Aayog paper on multidimensional poverty since 2005-06 estimated that the country’s multidimensional poverty headcount may have declined to 11.28% in 2022-23, with about 248 million people escaping poverty between 2013-14 and 2022-23.

Several government programmes have contributed to this progress. Housing schemes, access to cooking gas, bank account inclusion through Jan Dhan Yojana, sanitation drives under Swachh Bharat Mission, and electrification programmes have addressed multiple dimensions of deprivation simultaneously. Health coverage through Ayushman Bharat and direct benefit transfers have further strengthened the safety net.

Challenges that demand attention

While aggregate numbers have improved, inequality within and across states remains a persistent issue. Rural-urban disparities, although narrowing, continue to exist. Vulnerable populations remain susceptible to shocks, whether from climate events, health crises, or economic downturns. The quality of jobs, particularly in the informal sector, continues to be a concern, as many who have moved above the poverty line live precariously close to it.

What do you think? Given the wide variation in poverty estimates depending on methodology, do you believe a single official poverty line can truly capture the complexity of deprivation in a country as diverse as ours? And what more do you think needs to happen for the goal of eradicating extreme poverty by 2030 to become a reality?

References

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Table of Contents

The last official poverty estimate and why it still matters 🔗

Why a decade-old estimate held relevance 🔗

The multidimensional poverty lens 🔗

Progress captured in the 2023 MPI review 🔗

The COVID-19 disruption 🔗

The cushioning role of social safety nets 🔗

Recent estimates suggest a dramatic turnaround 🔗

The vulnerable groups that remain at risk 🔗

Methodological debates and data challenges 🔗

The policy and political dimension 🔗

The road to 2030 and beyond 🔗

Challenges that demand attention 🔗