World Bank revises International Poverty Line and India’s Poverty Rate declines
- finminati
- Jun 11
- 3 min read
Updated: Jun 21
11 June 2025, Wednesday
The World Bank recently updated the International Poverty Lines (IPL) to account for rising costs, adding 125 million people to the tally of extreme poor globally.
Despite this, the poverty rate in India declined.
Read on to find out more.
World Bank and the International Poverty Lines
The International Poverty Line is the minimum amount of money a person needs, each day, to meet basic needs like food, clothing and shelter.
It is used as a global benchmark to measure extreme poverty.
IPL was introduced by the World Bank at $1 a day in 1990. The World Bank revises IPL from time to time to account for the rising prices (inflation) and the changing cost of basic needs using Purchasing Power Parities (PPPs) i.e. how much something would cost in one country versus another, thus making global poverty numbers more comparable.
Before 2025, IPL was revised in 2001, 2008, 2015 and 2022.
The following table shows the latest revised numbers of IPL.
Old | New | |
Low Income Countries (Extreme Poor) | $2.15 / day | $3.00 / day |
Lower Middle Income Countries | $3.65 / day | $4.20 / day |
Upper-Middle Income Countries | $6.85 / day | $8.40 / day |
This revision has resulted in addition of 125 million people globally to the tally of extreme poor.
India and its Poverty Rate
Despite the fact that 125 million people were added to the tally of extreme poor globally after the increase in IPL, India recorded a decline in its poverty rate.
Let’s understand how.
There are 3 factors behind this:
India updated its consumption data
Better Survey Methods
Government Schemes / Programmes
(I) India updated its consumption data
National poverty is based on household consumption data - like how much people spend on things like food, transport, rent and so on.
Up till recently, India was using 2011-12 household consumption survey data.
That changed in 2023, when India released fresh survey data.
(II) Better Survey Methods
In 2023, India overhauled its methodology.
Instead of the older method called the Uniform Reference Period (URP), a new method called the Modified Mixed Recall Period (MMRP) was used.
To put simply, in the newer method, people were asked about their spending habits over a relatively shorter period of time. This helped get more accurate data as it is easier to recall one’s spending habits over a shorter time period like over the past week / month as opposed to a longer one.
(III) Government Schemes / Programmes
Various government programmes and targeted welfare schemes have helped in reducing poverty through economic growth.
Some of them are:
PM Awas Yojana for affordable housing
PM Ujjwala Yojana for clean cooking fuel
Jan Dhan Yojana for financial inclusion
Ayushman Bharat for healthcare access
Direct Benefit Transfer (DBT) to directly deliver benefits to people without leakage
Change in India’s Poverty Statistics
As a result of aforementioned reasons, there is a major shift in India’s poverty statistics.
2011-12 | 2022-23 | |
Extremely Poor $3.00 / day | 27% (344 Mn people) | 5% (75 Mn people) |
Lower-Middle Income $4.20 / day | 58% | 24% |
Even though the 2011-12 and 2022-23 data is not perfectly comparable due to change in methodology, it still shows a good improvement in India’s poverty numbers.
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