Poverty plunges in India, but top 10% earn 13 times more than bottom 10%: World Bank

Amid heaps of trash, countless underprivileged children in India sort waste to earn a meager living, an invisible workforce fueling the country’s recycling economy.

NEW DELHI: India has lifted an estimated 496 million people out of poverty between 2011 and 2023, recording one of the world's fastest declines in poverty over the period. However, significant income inequality persists, with workers in the country's top 10% earning a median income nearly 13 times higher than those in the bottom 10%, according to the World Bank's October 2026 India Poverty and Equity Brief.The report highlights India's progress in reducing both extreme and multidimensional poverty but flags persistent challenges such as stagnant real wages, poor employment quality and unequal access to economic opportunities.Sharp decline in povertyThe share of India's population living below the lower-middle-income poverty line of $4.20 a day, measured at 2021 purchasing power parity (PPP), fell sharply from 57.7% in 2011 to 16.1% in 2023.Extreme poverty also witnessed a significant decline. The proportion of people living on less than $3 a day dropped from 27.1% to 2.6% during the same period.Rural poverty remains higherDespite the overall progress, poverty remains unevenly distributed across the country. Rural poverty stood at 19.3% in 2023, significantly higher than the 8.6% recorded in urban areas, based on the $4.20-a-day threshold.The report noted that households with lower educational attainment, fewer assets, limited access to stable employment and higher dependency ratios remain particularly vulnerable.

Geographically, states across a contiguous belt stretching from Uttar Pradesh to West Bengal accounted for around 57% of India's poor population.The World Bank said further poverty reduction would increasingly depend on creating more productive employment opportunities in these regions, particularly through better-quality non-farm jobs.

More jobs, but wages remain stagnantIndia added around 134 million employed people between 2017 and 2023, nearly twice the increase in its working-age population.

A significant share of this growth came from rural women entering paid employment, increasing the number of earning members in households.However, the rise in employment has not translated into comparable wage growth. The report noted that real earnings remained broadly unchanged, with much of the employment expansion concentrated in relatively low-productivity activities.It also flagged limitations in measuring inequality, noting that improvements in recent household surveys may account for part of the reported welfare gains, while wealthier households may not be fully represented, potentially leading to an underestimation of inequality.