By Dr. Gyan Pathak
Real earning of workers in India remained unchanged and there was low quality of employment growth in recent years. Even though extreme poverty in India has been reported declined to 2.6 per cent by World Bank’s Poverty & Equity brief for India released on October 30, 2026. Poverty, Prosperity, and Planet Report 2026 though titled “Job at the Centre of Poverty Eradication”, for India it seems only partially true. This poverty reduction figure has something to do with other things, such as the method of measurement and the base year, that does not reflect the reality on the ground in 2026.
Years old data produced in 2026, has created much confusion among the common people. World Bank has calculated the data on PPP calculated in 2021, and India’s poverty estimation is not based on income but on consumption expenditure, one of its footnotes admitted lowers the measure and captures the reality less fully. When adjusted to the current price, the poverty line for lower middle class country like India at $4.20 would be around $5.32 the incidence of poverty would not be 14.2 per cent but something between 33 to 36 per cent. Similarly, International poverty line of $3, would be around $3.73 and incidence of extreme poverty would not be just 2.6 but around 14.2 in 2026.
India and Indians must not bury their heads on the old data and contested poverty data based on consumer expenditure prepared by the government of India which includes welfare schemes, education, health, and government assistance in kinds such in foodgrains or money given to the people. India does not estimate poverty on income. Even working poverty rate in 2025, according to the International Labour Organisation (ILO), was 3.6 per cent. A PIB release said that every year 5.5 crore people fall in poverty due to unaffordable medical expenditure, and even PM Narendra Modi has repeatedly said that over 25 crore people were taken out of poverty in 10 years of his first two terms. These data itself indicate that Indian poverty data are unreliable.
As for the workforce, the world bank brief says that over the recent period, between 2017 and 2023, employment increased by about 134 million people, nearly twice the growth of the working-age population, with much of the gain driven by rural women entering paid work and raising the number of earners per household. Labour market conditions continue to be broadly resilient, with labour force participation and employment rates stable between Q1 FY2026 and Q1 FY2027.However, youth unemployment rose from 14.6 to 15.9 percent between the two quarters, particularly among rural young women. Moreover, real earnings remained broadly unchanged with employment growth concentrated in relatively low-productivity activities.
Households in both rural and urban areas experienced substantial welfare gains, the brief noted, with faster progress in rural India significantly narrowing the rural-urban gap. Yet many of the households that remain poor continue to live in rural areas, where productivity is lower and access to higher-quality non-farm employment opportunities remain more limited. Poverty has also become increasingly concentrated geographically. While living standards improved across most states, households in a contiguous belt stretching from Uttar Pradesh to West Bengal account for about 57 percent of India’s poor population. As a result, further reductions in national poverty will increasingly depend on enabling productive employment in these states.
The brief said that these indicative microsimulation-based projections of poverty will be updated as labour market and macroeconomic data are revised or new data becomes available. The current progress was mainly driven by strong consumption growth, rising employment, especially among women, and expanded social transfers, including food subsidies. As poverty declined, it became increasingly concentrated among households with lower education, fewer assets, limited access to stable employment, and higher dependency ratios. Wage disparities, however, remain pronounced, as median earnings among the top 10 percent of workers were about 13 times those of the bottom 10 percent in 2023.
At different poverty lines, the brief has projected different data for the year 2023, that is of three years back. International poverty line is $3.00 per day below which people are considered in extreme poverty, the rate of which for India was given at 2.6 per cent. At lower-middle-income country, India’s poverty rate at $4.20 is 16.1 per cent, and at upper middle income poverty line $8.30 per day India’s poverty rate will be 80 per cent.
World Bank has also reported huge prosperity gap for India, as per global prosperity standard of $28 in 2021, which was increased from $25 in 2017. The report places prosperity gap score of India at 4.9. India’s consumption based Gini was 23, lower than 25.5 in 2025 report when it was reported as the 4th most equal country of the world.
However, in income or wealth based inequality, the World Inequality Database, places India as one of the most unequal countries. Top 1 per cent controls 40 per cent of wealth, while bottom 50 per cent receive only 15 per cent of the national income. The medial earnings of top 10 per cent are roughly 13 times higher than those of the bottom 10 per cent. Wage and labour participation disparities remain acute with female labour force participation around 15.7 per cent.
World Bank Multidimensional Poverty Measure is available for India for the year 2022 which is at 15.5 per cent. On daily consumption less than $3, it is 5.3 per cent. For the families having no adult completed primary education it is 13.8 per cent, no access to limited-standard drinking water 6.4 per cent, no access to limited-standard sanitation 29.6 per cent, and not access to electricity 1 per cent.
Poverty rate for urban population 8.6 per cent, rural population 19.3 per cent, males 15.7 per cent, female 16.6 per cent, children below 14 years 21.8 per cent, between 15-64 years 14.4 per cent, 65 years above 14 per cent, 16 plus without education 21.3 per cent, 16 plus primary education 17.3 per cent, 16 plus secondary education 14 per cent, and 16 plus tertiary or post-secondary education 7.4 years.
It must be noted here that India gives under PM Garib Kalyan Yojana (PMGKY) 5 kg grain per person per month intended to cover 81.35 crore poor, and 35 kg per month per family under Antyoday Anna Yojana (AAY) to 2.17 – 2.5 crore households. Therefore, the government can’t deny its own data regarding poor. Government uses this scheme also as decoy to social security for workforce in the country, and successfully persuaded ILO to accept it. It is also worth mentioning here that India has around 90 per cent of informal workers having little or no social security coverage. (IPA Service)
