By Dr. Gyan Pathak
India made “remarkable progress” in reducing poverty, World Bank said in October 2026 report, adding extreme poverty fell to 2.6 per cent who were living on less than $3 a day in 2021 Purchasing Power Parity (PPP) terms. Let Prime Minister Narendra Modi applaud himself, his government, and the Word Bank data, and play politics, but we need to have a careful scrutiny of the data and his statements, and compare it to the ground reality, since burying our head in “India made poverty reduction” data will have dangerous consequences.
PM Modi, while inaugurating Pune Metro line through video conferencing on November 3 2026 citing the level of data for the year 2021 criticised the Congress and said, “Around 50 crore people have overcome extreme poverty in India in the last 12 years. Earlier, the fight against poverty was limited to slogans. Today, India is defeating poverty on the ground.” He said that his government had consistently focused on empowering the poor and enabling them to overcome poverty through confidence and opportunities. He also said, “The country’s economic growth and poverty reduction are interconnected, with increasing investments in infrastructure and welfare schemes improving people’s lives and creating employment opportunities.”
PM Modi was just playing to the gallery. The ground reality is that majority of the population in India has a perilous existence. India has actually manufactured its data on poverty which was just picked up by the World Bank. Now PM Modi tries to hide behind the World Bank as if it was their data. No, the data was manufactured in India on consumption skewed by the government programmes and expenditure cushioning the pangs of poverty, that was not poverty alleviation at all, since income remained almost stagnant the World Bank report itself has warned. US, EU and other developed countries give data on poverty based on income of the people, reflecting if they are able to pay the cost of living on their income.
World Bank talked about PPP 2021, which is five years back, and made three categories of poverty – $3 (International poverty line), $4.20 (lower middle income poverty line), and $8.30 (upper middle income poverty line). World Bank, while comparing the data of countries, they made a grave mistake and compared two different set of data – poverty on consumption basis and poverty on income basis, which are actually not comparable at all.
Whether India faring well in poverty alleviation compared to those countries that measure poverty on basis of income and affordability of living cost is therefore give wrong picture of poverty alleviation, because all the government expenditures on welfare programmes and public services are added to inflate the income of the people on consumption basis.
It is on this India manufactured data, World Bank said on PPP 2021, that extreme poverty in India declined to 2.6 per cent, that means only this percentage of people were living on less than $3 consumption level per person per day that was on an average ₹221.81. At $4.20 consumption level poverty increased to 16.1 per cent, and at $8.30 per day consumption level India’s poverty rate was 80 per cent.
Since Modi is making claim of poverty reduction in 2026, five years later than PPP 2021, when the extreme poverty line in India was just ₹221.81, gives distorted sense of the current ground reality of today, because CPI inflation has risen to 5.54 per cent, and food inflation 7.74 per cent that heavily impact people living in or near poverty. The cumulative increase in India’s consumer price inflation from 2021 through September 2026 is approximately 27.93% based on compounded annual inflation metrics. The real wages have remained stagnant during this period.
India does not produced data on income because the country lacks steady payrolls for over 90 per cent of informal workers. Income-based tracking exposes severe volatility. A bad monsoon season, a health emergency, or a market downturn can reduce a household’s income to zero overnight. While consumption can sometimes be smoothed out using savings, debt, or welfare rations, raw income often collapses during crises. Producing consumption based data give brighter picture because people’s income calculations include government expenditure on welfare and public schemes. Even free food scheme covers about 81 per cent of people, that makes poverty only little more tolerable but not actually remove poverty.
The poverty reduction data of the World Bank can’t be reconciled with other data that it gave, even when based on India manufactured data. Let us take example of data related on food. India’s cost of healthy diet was $4.11 dollar in 2025, not $3. World Bank data shows that 52 crore people out of 146 crore were not able to afford healthy food in 2025, that is 35.5 per cent were not even able to afford healthy food, even when income level was skewed to be higher due to consumption methodology that included government’s public expenditure in individual’s income which the individual was not actually earning.
Extreme poverty reduction to 2.6 per cent can’t also be reconciled with other data such as child stunting of 35.5 per cent, underweight under 5 children 32.1 per cent, and child anemia at 67 per cent as per National Family Health Survey metrics.
Government of India skewed the poverty data by including all the subsidies, cash transfers, and other public schemes expenditure to individual consumption level to calculate individual income, which was actually not an income. Even though free food grains under two schemes, Poshan Abhiyan, mid-day meals pushed up the individual consumption level but severe undernutrition remained, because monetary poverty could not erase nutritional deficit.
World Bank “healthy diet” affordability metrics says 52 crore to 90 crore people in India could not afford the healthy diet depending on different diet cost calculation method, while it puts people under poverty about 3.5 crore to 200 crore (2.6 per cent of 14.2 per cent). The gap between the two numbers is so massive that we need serious scrutiny.
India calculates energy sufficient poverty line, based on consumption of calories, which is supported by free foodgrains and free meals to school children. Nutrient-adequate poverty line could be different, and its affordability on the basis of actual income could give very disturbing picture of perilous existence of India’s poor. Government data shows that about 5.5 crore people every year are pushed into poverty every year due to a single factor of medical conditions. We must take into consideration the reality of perilous existence of about 35 per cent of people in the country, and must not keep blind eye to this reality. Majority of India’s population has perilous existence living just a shock away from poverty is an additional concern. (IPA Service)
