India has achieved a dramatic reduction in extreme poverty, lifting nearly 500 million people out of hardship between 2011 and 2023. According to a new World Bank report, the country's extreme poverty rate fell from 27.1 percent to 2.6 percent during this 12-year period, a decline that rivals global historical achievements.

The scale of this poverty reduction is considered remarkable, placing India's progress among the fastest globally. This significant achievement comes as India, the world's most populous nation with 1.4 billion people, continues to grapple with widening income and wealth inequality.

The World Bank report, which utilized three official household surveys, defined extreme poverty as living on less than $3 a day. Under this threshold, an estimated 496 million people escaped poverty. Furthermore, the percentage of the population living below the lower middle-income poverty line of $4.20 a day dropped from 57.7 percent to 16.1 percent.

Ayago Wambile, the World Bank's South Asia poverty economist and lead author of the report, stated that the progress was primarily fueled by robust consumption growth, increased employment opportunities, particularly for women, and expanded social welfare programs like food subsidies. The report projects a continued, albeit more gradual, decline in poverty rates.

Despite this significant poverty alleviation, India's economic opening in the early 1990s has coincided with a substantial increase in inequality. The 2026 World Inequality Report indicates that India's inequality levels are among the highest globally. This stark contrast between poverty reduction and rising inequality presents a complex economic landscape for the nation.

Experts note that while lifting millions out of extreme poverty is a monumental success, the persistent and growing wealth gap raises concerns about equitable development and social cohesion. The focus now shifts to addressing the structural factors contributing to this widening disparity.

The World Bank's data on poverty rates was derived from Household Consumption Expenditure Surveys. The report's projections suggest that the poverty rate at the $4.20/day line is expected to decrease from 14.2 percent in 2026 to 12.1 percent by 2028, indicating a continued downward trend.

This period of rapid poverty reduction in India is often compared to China's efforts, which lifted over 800 million people out of extreme poverty, though over a much longer, 40-year timeframe. India's achievement in a little over a decade highlights the effectiveness of its recent economic and social policies, even as the challenge of inequality looms large.