India’s significant reduction in poverty has emerged as a critical counterweight to a potential global surge in extreme poverty following the World Bank’s recent revision of the International Poverty Line (IPL). The Bank updated the IPL from USD 2.15 per day (based on 2017 purchasing power parity) to USD 3.00 per day (2021 PPP). This recalibration, intended to more accurately reflect global living costs, would have otherwise increased the number of people living in extreme poverty worldwide by 226 million.

However, India’s improved consumption data and updated survey methodologies helped offset this impact, reducing the net global increase to just 125 million. According to a government release citing World Bank data, India’s poverty rate stood at 5.25 per cent in 2022-23 under the revised poverty line.

The country has witnessed a dramatic fall in poverty levels over the past decade. From a poverty rate of 16.22 per cent in 2011-12, India reduced the proportion of its population living in poverty to just 5.25 per cent in 2022-23. In absolute terms, this translates to a reduction from 205.9 million people to 75.2 million—a decline of over 125 million individuals.

A major factor behind this progress is India’s methodological overhaul in poverty measurement. The National Statistical Office’s latest Household Consumption Expenditure Survey (HCES) replaced the outdated Uniform Reference Period (URP) with the Modified Mixed Recall Period (MMRP). This new methodology uses shorter recall periods for frequently purchased items, capturing more accurate data on household consumption.

The impact of MMRP is evident when applied to earlier data. In 2011-12, it lowered the poverty rate from 22.9 per cent (URP) to 16.22 per cent. Under the 2022-23 data, the new methodology revealed a poverty rate of 5.25 per cent under the updated USD 3.00 poverty line and just 2.35 per cent under the older USD 2.15 benchmark.

The 2023-24 HCES highlights further underscore improvements in consumption and equity:

• The average Monthly Per Capita Expenditure (MPCE) was Rs 4,122 in rural areas (Rs 4,247 with social transfers) and Rs 6,996 in urban areas (Rs 7,078 with transfers). This is a significant jump from Rs 1,430 (rural) and Rs 2,630 (urban) in 2011-12.
• The urban-rural consumption gap narrowed from 84 per cent in 2011-12 to 70 per cent in 2023-24.
• All 18 major states recorded an increase in MPCE. Odisha showed the highest rural growth (approx. 14%), while Punjab led in urban increase (about 13%).
• The Gini coefficient, a measure of inequality, fell from 0.266 to 0.237 in rural areas and from 0.314 to 0.284 in urban areas between 2022-23 and 2023-24.

India’s poverty story exemplifies how evidence-based policymaking, refined data collection, and targeted welfare can deliver tangible results. The success also signals a global lesson: poverty reduction requires not only growth and welfare schemes but also accurate measurement tools to track and sustain progress.