World Bank hails India's poverty reduction offering lessons for developing countries

New Delhi, Nov 9 : India's sharp reduction in poverty over the past decade driven by sustained economic growth, rising consumption, expanding employment and social protection, offers important lessons for developing countries, a new report has said after World Bank said that Indians living in extreme poverty fell to 2.6 per cent in 2023 from 27.1 per cent in 2011.

The report from Bangladesh-based 'The Business Standard' said India lifted around 496 million people out of extreme poverty, more than the population of the US and Russia combined, marking "fastest poverty declines in the world."

The recent World Bank Brief also indicated that using the lower middle-income poverty line of $4.2 per day, could indicate that the poverty rate declined to 16.1 per cent from 57.7 per cent over the same period.

The World Bank however, has cautioned that some recent gains could reflect improvements in measurement alongside genuine welfare improvements.

"But those improvements have not been uniform across regions — in fact, 57 per cent of India's poor population is concentrated in a contiguous belt stretching from Uttar Pradesh to West Bengal," the report said.

Sustained high economic growth was a key driver of poverty reduction along with three other major factors. India maintained resilient growth between 2010 and 2025, with economic expansion averaging over 7 per cent annually during 2022-2025 after recovering from the pandemic-induced contraction.

Household spending nearly doubled to $2.24 trillion in 2025 from $1.24 trillion in 2015, supported by rising discretionary spending, premiumisation trends which also improved economic condition of the country, creating business opportunities.

“Rising employment, particularly among women, played a significant role behind the impressive poverty reduction record of India during the last decade. Between 2014 and 2024, over 17 crore jobs were created in India, amounting on average 1.7 crore jobs per year. Unemployment in the country dropped from 7.6 per cent in 2015 to 4.2 per cent in 2025,” the report noted.

The social assistance programmes of India with increased digitisation, for scaling up of the programmes, women-centric welfare, agricultural and rural support and broadening social assistance also played a major role in poverty reduction.

—IANS

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