• India’s extreme poverty rate declined sharply to 5.25 per cent over a decade from 27.1 per cent in 2011-12, even as the World Bank revised upwards its threshold poverty line to $3 per day.

• Given India’s inflation rate between 2017 and 2021, a revised extreme poverty line of $3 would constitute a 15 per cent higher threshold than $2.15 expressed in 2021 prices and result in a 5.3 per cent poverty rate in 2022-23, the World Bank said in a report. 

• As against 34 crore people below poverty line ($3/per day) in 2011-12, the numbers have come down to 7.5 crore in 2022-23 in absolute numbers.

India’s Revised Poverty Profile 

• India’s latest Household Consumption Expenditure Survey (HCES) adopted the Modified Mixed Recall Period (MMRP) method, replacing the outdated Uniform Reference Period (URP). 

• This shift used shorter recall periods for frequently purchased items and captured more realistic estimates of actual consumption.

• As a result, consumption recorded in national surveys rose, leading to a drop in poverty estimates.

• In 2011–12, applying MMRP reduced India’s poverty rate from 22.9 per cent to 16.22 per cent, even under the older $2.15 poverty line.

• In 2022–23, poverty under the new $3 line stood at 5.25 per cent, while under the older $2.15 line it dropped further to 2.35 per cent.

• The World Bank report said that in India, 54,695,832 people lived on less than $3 per day in 2024. Thus, the poverty rate at $3 per day (2021 PPP - percentage population) is 5.44 per cent in 2024.

• The extreme poverty rate decreased from 16.2 to 2.3 per cent between 2011-12 and 2022-23, while the poverty rate at the lower-middle-income country (LMIC) line declined by 33.7 percentage points.

• Free and subsidised food transfers supported poverty reduction, and the rural-urban poverty gap narrowed. 

• India has lifted 171 million people from extreme poverty in the decade between 2011-12 and 2022-23.

• The rural extreme poverty dropped from 18.4 per cent to 2.8 per cent, and urban from 10.7 per cent to 1.1 per cent, narrowing the rural-urban gap from 7.7 to 1.7 percentage points.

(The author is a trainer for Civil Services aspirants.)