World Bank Poverty Line Raised to $3 a Day
Why in the news
The World Bank raised its benchmark for extreme poverty, which pushes up headcounts globally while still showing a steep fall for India.
Key facts
- New line: $3/day at 2021 PPP; old line: $2.15/day at 2017 PPP.
- The revision is about 15% higher and reflects PPP changes and inflation in developing countries, notably India’s inflation between 2017 and 2021.
- India’s extreme poverty: 27.1% (2011-12) to 5.3% (2022-23) at the new line.
- At the older $2.15 benchmark the 2022-23 figure was 2.3%.
- 2024: 5.44% of Indians, or 54.7 million people, lived below $3/day.
- The lower-middle income line showed a 33.7 percentage point fall over the same period.
India’s poverty rates by benchmark
| Period | Benchmark | Rate (%) |
|---|---|---|
| 2011-12 | $2.15/day | 27.1 |
| 2011-12 | $3.65/day (lower-middle income) | about 39.7 (estimate) |
| 2022-23 | $2.15/day | 2.3 |
| 2022-23 | $3/day (revised) | 5.3 |
| 2024 | $3/day | 5.44 |
About the poverty line
- Minimum income needed for basic needs such as food, shelter and clothing.
- Helps governments gauge poverty and find people needing support.
- Methods differ across countries, usually based on food, housing and essentials’ costs.
Implications
- India’s poverty has fallen across all global benchmarks.
- The $3 line gives a more realistic picture for the Global South.
- Keeping progress needs inflation control, rural jobs, safety nets (PDS, MGNREGA), education and healthcare.
Exam angle
- Revised line: $3/day (2021 PPP).
- Earlier line: $2.15/day.
- Institution: World Bank.