The World Bank has projected a downward trend in India’s poverty rates, forecasting that the share of the population living below the $4.2-a-day threshold will decrease to 12.1% by 2028. This figure represents a notable decline from the 14.2% rate estimated for 2026. The latest Poverty & Equity brief from the international financial institution highlights that this trajectory of economic improvement is supported by robust consumption growth, rising employment levels, and the expansion of social welfare programs, including essential food subsidies.
Looking back at a broader historical timeline, the report underscores significant progress achieved over the last decade. Between 2011 and 2023, the segment of India's population living on less than $4.2 per day fell from 57.7% to 16.1%. During this same duration, the prevalence of extreme poverty, defined as living on less than $3 a day, saw a sharp decline from 27.1% to 2.6%. The data suggests that these combined efforts have successfully lifted approximately 496 million people out of poverty during this period.
The report identifies several key drivers behind these developments. Increased employment, particularly among women, has played a critical role in household economic growth. Between 2017 and 2023, the number of employed people in India rose by about 134 million, a rate nearly double the expansion of the working-age population. However, the World Bank also noted that as general poverty levels recede, the challenge remains concentrated among households with limited access to stable employment, fewer assets, and lower education levels. Furthermore, wage disparities persist, with median earnings for the top 10% of workers recorded at approximately 13 times those of the bottom 10% in 2023.
Government officials have welcomed the findings. Union Finance Minister Nirmala Sitharaman highlighted that the report confirms India as having one of the fastest rates of poverty decline globally. In a statement posted on social media, she attributed this success to sustained policy efforts and the focus on inclusive growth under Prime Minister Narendra Modi’s leadership. She emphasized that the administration remains committed to enhancing household incomes, fostering productive employment, and ensuring the effective delivery of public services to meet the aspirations of citizens.
Despite the overall positive trend in employment, the report pointed to specific areas of concern within the labor market. While labor force participation and employment rates remained broadly stable between the first quarter of fiscal year 2026 and the same period in 2027, the data revealed an increase in youth unemployment. Specifically, youth unemployment rose from 14.6% to 15.9% during this timeframe, with the impact felt most acutely among young women in rural areas. Additionally, real earnings have remained largely stagnant, with much of the employment growth currently concentrated in low-productivity sectors.
Moving forward, the World Bank’s assessment suggests that while the momentum is positive, the quality of employment and the mitigation of wage disparities will be essential for sustained economic progress. The government has indicated that it intends to build upon these gains through continued structural support, aiming to strengthen the foundations of the economy to ensure long-term stability and opportunity for the workforce.
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