India’s poverty falls sharply, job growth soars: World Bank report

In a significant global milestone, India has earned high praise from the World Bank for its remarkable success in poverty alleviation. According to the World Bank’s Poverty and Equity Brief for India, released in April 2025, the country has lifted an estimated 171 million people out of extreme poverty between 2011-12 and 2022-23.

Extreme poverty—defined as living on less than $2.15 per day—dropped dramatically from 16.2% in 2011-12 to just 2.3% in 2022-23. The reduction was more pronounced in rural regions, where extreme poverty fell from 18.4% to 2.8%. In urban areas, the rate declined from 10.7% to a striking 1.1%. The gap between rural and urban extreme poverty narrowed significantly, falling from 7.7 to 1.7 percentage points, marking a 16% annual reduction.

India also recorded progress under the lower-middle-income poverty line of $3.65 per day, with the poverty rate falling from 61.8% to 28.1%, translating to 378 million people escaping poverty. Rural poverty under this benchmark declined from 69% to 32.5%, and urban poverty from 43.5% to 17.2%.

Key states drive poverty decline

The five most populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—played a central role, contributing to two-thirds of the reduction in extreme poverty. However, these states still represent a significant portion of the remaining extremely and multidimensionally poor.

India’s non-monetary poverty, measured by the Multidimensional Poverty Index (MPI), fell from 53.8% in 2005-06 to 16.4% by 2019-21, and further to 15.5% in 2022-23.

The report also highlights improvements in employment. Since 2021-22, job growth has outpaced the working-age population. Female workforce participation has increased, while urban unemployment dropped to 6.6% in Q1 2024-25—its lowest since 2017-18. The movement of male workers from rural to urban sectors and the growth in rural female employment in agriculture underscore evolving labor dynamics.

Nevertheless, challenges persist. Youth unemployment stands at 13.3%, rising to 29% among those with tertiary education. Formal employment remains limited, with only 23% of non-farm jobs classified as formal. Most agricultural jobs continue to be informal. Gender disparities also remain significant, with 234 million more men than women in paid employment.

Shift towards self-employment grows

Self-employment, particularly among rural workers and women, is on the rise—a sign of both resilience and the changing nature of India’s job market.

These findings align closely with the Indian government’s recent estimates. Prime Minister Narendra Modi recently noted that 250 million people have risen above the poverty line over the last decade. Supporting this, the latest Household Consumption Expenditure Survey (HCES) shows extreme poverty has dropped below 1% in 2023-24.

An accompanying SBI report confirms these trends, suggesting India’s poverty rate is now below 5%, with rural poverty falling to 4.86% and urban poverty to 4.09% in FY24.

While India still faces socio-economic challenges, the World Bank’s acknowledgment affirms the country’s progress in translating economic growth, inclusive policies, and development efforts into tangible improvements in people’s lives.