Will Poverty Still Haunt India in 2047? S. Mahendra Dev

Growth is not the sole objective of economic policy. It is necessary to ensure that the benefits of growth accrue to all sections. Eradication of poverty is thus an important objective. The objective of this article is to (a) examine briefly the recent trends in poverty and (b) look at the strategies needed to reduce or eliminate income and multidimensional poverty by 2047.

Recent Trends

The estimates by R. Rangarajan and myself (2025) show that poverty ratios (rural + urban) declined from 29.5% in 2011-12 to 9.5% in 2022-23 and to 4.9% in 2023-24. Recently, World Bank (2025) released a brief on Poverty & Equity for over 100 developing countries. The brief says India has significantly reduced poverty over the past decade. Extreme poverty (living on less than $2.15 per day in purchasing power parity terms) declined from 16.2% in 2011-12 to 2.3% in 2022-23, lifting 171 million people above this line. Using the $3.65 per day poverty line for lower-middle-income countries, poverty fell from 61.8% to 28.1%.

Another notable achievement is that there has been a significant decline in poverty between 2022-23 to 2023-24. In one year, poverty declined from 9.5% in 2022-23 to 4.9% 2023-24. What are the reasons for a significant decline of poverty in one year? It looks like GDP growth could be a proximate reason for reduction in poverty in 2023-24.

Inequality in consumption also declined during the period 2011-12 to 2022-23 and from 2022-23 to 2023-24. The Gini coefficient estimated by the National Statistical Office shows that inequality fell from 0.310 in 2011-12 to 0.282 in 2022-23. The decline in inequality was higher for urban areas during this period. Inequality in consumption declined significantly in one year between 2022-23 to 2023-24. Gini coeffect fell from 0.282 in 2022-23 to 0.253 points in 2023-24.

A recent World Bank report says India has been ranked fourth in income equality globally with a score of 25.5 on the Gini Index after Slovak Republic (24.1), Slovania (24.3), and Belarus (24.4), emerging as one of the world’s most equal societies. India’s Gini Index is lower than China (35.7) and the US (41.8).

Likely situation and Strategies

The estimates on extreme poverty show that it varies from 4.9% in 2023-24 (based on the Rangarajan Committee’s methodology) and 2.3% in 2022-23 (based on the World Bank’s $2.15 per day). Extreme poverty can be eliminated soon in India. If we use $3.65 per day poverty line of low-middle income countries India’s poverty ratio line is around 28% in 2022-23. If we assume the same annual rate of decline in the future, India should eliminate poverty in the next ten years based on the poverty line of $3.65 per day.

According to a discussion paper of the NITI Aayog (2025), India has registered a significant decline in multidimensional poverty in India from 29.17% in 2013-14 to 11.28% in 2022-23, i.e. a reduction of 17.89 percentage points. At the present rate of progress, multidimensional poverty is likely to be eliminated by 2030. There is a need to focus on some of the SDGs which are not on track in the next two decades.

Income poverty and multidimensional poverty are determined by factors such as GDP growth, inflation, employment, physical infrastructure, health, education and inequalities. India aspires to achieve GDP of $30 trillion and per capita GDP of $18220 to become a developed a nation by 2047, the centenary year of Independence. The two main engines of growth are exports as well as private sector investment. Achieving quantity and quality employment is also crucial for eliminating poverty. India’s fast growing young workforce is another advantage which few countries enjoy in today’s world. This alone can help India leapfrog to a high growth trajectory with good quality education and skilling opportunities as well as meaningful employment options to absorb the youth.

There are two long-term structural factors that have to be solved by the centenary year. First, one of the long standing challenges facing the Indian economy is structural transformation in agriculture, industry and services. Agriculture is still the largest employer at 46%. In the larger context, the structural transformation of the economy from agriculture towards manufacturing and services sectors can be of critical importance when it comes to generating employment opportunities. India can benefit from the trends in global industrial diversification, supply chain restructuring and China+1 strategy. India can lead the new flying geese for global value chains (GVCs). Although the share of GVCs is lower now, the government is following appropriate policies to enhance India’s role and integrate with GVCs. The creation of quantity and quality of employment is the most important element of inclusive growth. Some studies have shown that investing in labour intensive manufacturing and services and rise in formal skilling can raise employment quantity and quality significantly. The recently announced employment linked incentive (ELI) scheme will also boost jobs. There has been significant push to MSME sector which contributes large employment. MSME is the second biggest employer after agriculture. Second, access to good health and education are essential for improving human capital. Another source of growth and quality employment is the use of digital technology.

Finally, sustainability and tackling climate change are also important for reducing poverty. On sustainability, India’s vision is to have a balance in achieving higher growth along with low-carbon emissions and environmental sustainability. It is known that India’s climate efforts are anchored in its commitment to achieve net-zero emissions by 2070. Another important initiative by India is Life Style for Environment (LiFE), which is a powerful one for achieving sustainable development.

Economic growth is needed but inclusion and sustainability are equally important to reduce poverty and improve the levels of living. By the centenary year of Independence 2047, the task of India is to build on the achievements so far and move towards a society that is not only prosperous but also equitable and pro-nature.

Views are personal