From 129 million to 75 million: What’s behind India’s poverty recount

India has the largest number of poor in the world. While we may be competing with Japan and Germany to become the third-largest GDP, there is no competition at all in the poverty sweepstakes.

The World Bank publishes its regular global poverty stock-take every seven years. The last Poverty Report, published in 2024, placed the number of extreme poor (those with per capita purchasing power parity (PPP) income of $2.15 per day at 2017 prices) in India at 129 million (of a total 692 million). India, with 18.6 per cent of global total, had the largest number of extreme poor.

This month, the World Bank published an unprecedented Update (2025), largely focusing on India. At a 2021 PPP income of $3 per person per day, the number of global extreme poor has gone up to 808 million. For India, however, the number of extreme poor has been brought down to 75.2 million.

In one year, the World Bank has reduced India’s extreme poor by 53.8 million. How did the World Bank do this magic?

The World Bank also states that the $2.15/$3 poverty cut-off referenced to Burkina Faso is only for 23 remaining low-income countries (LICs), not relevant for India, a middle-income country (MIC). Why then is the government tom-toming this as a big achievement? Is India the country with the largest poor as per the World Bank’s appropriate poverty benchmark?

Acceptance of India’s new survey methodology

India carried out a new Consumption Survey in 2022-2023, after jettisoning the regular five-yearly survey of 2016-2017 as unreliable.

While publishing the 2024 Poverty Report, the World Bank did not accept the findings of the new Consumption Survey and presented India’s poverty estimates using the method which it has been using since 1990, when it first published global poverty estimates.

Making a complete turn-around, in the 2025 Update, the World Bank has fully accepted India’s 2022-2023 survey. Making some adjustments, including counting free foodgrains at their market value, it has also come up with India’s revised poverty estimates for 2011-2012, the year when the last full-scale consumption survey was done in India.

The results are startling.

Using a standard methodology, called uniform recall period (URP), the World Bank estimated India’s poverty at $2.15 PPP (2017) for 2011 at 289.4 million (22.9 per cent of India’s population). According to the same methodology, the World Bank has estimated India to have 182.13 million (12.9 per cent) extreme poor in 2021.

Adoption of India’s changed methodology in the 2022-2023 survey, called modified mixed recall period (MMRP), brings down the number of extreme poor, at $2.15 PPP (2017), to 206 million in 2011 (16.2 per cent) and to 33.67 million in 2022 (2.35 per cent).

Phew, India’s changed methodology evaporated extreme poverty in India!

The same statistical gymnastics about India’s extreme poor is seen in the $3 per day per person benchmark (2021 PPP). As per this benchmark, the World Bank found India to have 344.41 million (27.12 per cent) extreme poor in 2011, which comes down to 75.22 million in 2022 (5.25 per cent) — a reduction of about 270 million.

This is the number which the Narendra Modi government is singing paean about.

There are, in fact, three numbers of extreme poor in India in the World Bank 2025 Update — 182.13 million (URP $2.15 at 2017 PPP), 33.67 million (MMRP $2.15 at 2017 PPP), and 75.22 million (MMRP $3.0 at 2021 PPP).

The range fluctuates 5.4 times!

You may choose whichever poverty estimate appeals to you or throw all of them out because the World Bank also says that the measurement of extreme poverty as per $2.15/ $3 per day (2017/2021 PPP) benchmark is irrelevant for a lower MIC like India.

Largest number of poor in India

The World Bank believes that the $6.85 (2017 PPP)/ $8.3 (2021 PPP) benchmark is the right one for the MICs and high-income countries (HICs), which now house more than 90 per cent of the global population. This benchmark takes into account consumption of human necessities like electricity, health services, digital access, etc., besides basic needs of food and clothing which the $2.15/$3 extreme poverty benchmark is based on.

As per the $6.85/8.3 benchmark, India, according to the 2025 Update, has 1,175.7 million poor (82.06 per cent of India’s population) in 2022 against 1,174.45 million in 2011 (92.48 per cent) —  indicating hardly any reduction in the absolute number of poor.

According to the same benchmark, there are, in all, 3,831.8 million poor in the world, which makes India home of 30.7per cent of the world’s poor. With the largest number of poor among all the countries, India’s number of poor exceeds the total number of poor in all of Sub-Saharan Africa (1,086.6 million).

The World Bank uses one more poverty benchmark, which it is retiring, developed for the MICs in 2017 — $4.2 per capita per day (2021 PPP). As per this benchmark, the total number of poor in 2025 in the world is 1,603 million. Of these, India has 342.29 million (21.35 per cent of total global poor).

In this metric also, India has the largest number of poor in the world.

Sub-Saharan Africa (SSA) has 775.8 million poor (48.4 per cent). The World Bank has not yet published a country-wise break-up of the poor in SSA. As Nigeria has the largest population in SSA (about 227.8 million), no SSA country will have more poor than India.

For comparison, the whole of East Asia and Pacific, which includes China, have only 143 million — about 40 per cent of India’s poor, as per this $4.2 benchmark.

India may not be proud of this achievement, but it has the largest number of poor in the world. While we may be competing with Japan and Germany to become the third largest economy, there is no competition at all in the poverty sweepstakes.

(Subhash Chandra Garg is former Finance & Economic Affairs Secretary, and author of ‘The Ten Trillion Dream Dented’, ‘Commentary on Budget 2025-2026’, and ‘We Also Make Policy’. X handle: @Subhashgarg1960)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.