India’s extreme poverty falls, but wealth inequality remains entrenched: World Bank

India’s extreme poverty rate has fallen dramatically over the past decade, declining from 27.1% in 2011 to 2.6% in 2023, according to the World Bank’s October Poverty and Equity Brief.

Yet, beneath this encouraging picture of economic progress lies a persistent disparity in income and wealth, with the richest continuing to command a disproportionate share of the country’s resources.

The World Bank, which defines extreme poverty as living on less than $3 (approximately Rs 285) a day, said income disparities remained pronounced, with workers in the top 10% earning a median income nearly 13 times that of those in the bottom 10%.

The proportion of Indians living below the lower-middle-income poverty threshold of $4.20 (around Rs 399) a day also declined substantially, from 57.7% in 2011 to 16.1% in 2023. This represents an estimated 49.6 crore people moving out of poverty, largely driven by robust consumption growth, rising employment, particularly among women, and expanded social protection measures, including food subsidies.

The gains, however, have been unevenly distributed. Rural poverty remained considerably higher than urban poverty, with 19.3% of the rural population living below the $4.20 threshold in 2023, compared with 8.6% in urban areas. States stretching from Uttar Pradesh to West Bengal accounted for approximately 57% of the country’s poor.

Although India added 13.4 crore employed people between 2017 and 2023, nearly twice the increase in its working-age population, much of the expansion came from rural women entering paid employment.

Real earnings, nevertheless, remained largely stagnant, as job creation was concentrated in relatively low-productivity sectors. Youth unemployment also climbed to 15.9% in April-June, against 14.6% in the corresponding period of 2025, with rural young women particularly affected.

The contrast between declining poverty and entrenched wealth concentration is striking. The 2026 World Inequality Report found that the richest 1% of Indians owned 40% of the country's wealth, while the top 10% controlled approximately 65%. Meanwhile, the bottom half possessed just 6.4% of national wealth by 2024.

Adding to the disparity, five of India's wealthiest families saw their fortunes surge by 400% between 2019 and 2025, according to a study by the Centre for Financial Accountability and the Tax The Top campaign.