World Bank sees India's poverty rate falling to 12.1% by 2028 from 14.2%

The World Bank expects India's poverty rate, measured at $4.2 a day, to fall from 14.2% in 2026 to 12.1% by 2028, according to its latest Poverty & Equity brief. The projection extends a long run of progress that the lender says has been among the fastest anywhere in the world.

Looking back, the numbers are striking. Between 2011 and 2023, the share of Indians living below $4.2 a day is estimated to have dropped from 57.7% to 16.1%, which the Bank translates into roughly 496 million people moving out of poverty. Extreme poverty, set at $3 a day, fell from 27.1% to 2.6% over the same stretch.

The World Bank credits the gains mainly to strong consumption growth, rising employment (especially among women) and wider social transfers such as food subsidies. Between 2017 and 2023, employment grew by about 134 million, nearly double the growth in the working-age population. Rural women entering paid work helped lift the number of earners per household.

The brief is not all good news, and for market watchers the caveats matter. As poverty has shrunk, it has become more concentrated among households with lower education, fewer assets, limited access to stable jobs and higher dependency ratios. Pay gaps are also wide: in 2023, median earnings of the top 10% of workers were about 13 times those of the bottom 10%.

Recent labour data adds nuance. Participation and employment rates were broadly stable between Q1 FY2026 and Q1 FY2027, but youth unemployment rose from 14.6% to 15.9%, with rural young women particularly affected. Real earnings were largely flat, and job growth clustered in relatively low-productivity activities, a reminder that headcount gains do not automatically mean income gains.

Finance Minister Nirmala Sitharaman welcomed the findings on X, saying the report recognises India as one of the fastest poverty reducers globally. She credited sustained government policy and pledged to build on it through productive employment, stronger household incomes and better public service delivery.

For the economy, the takeaway is that the next leg of poverty reduction will lean less on transfers and more on quality jobs and productivity. Faster-rising household incomes would also feed consumption demand, which businesses and investors track closely. Source: Times of India.

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