How poor is India? There is no official answer to this question, as India has not conducted a consumption expenditure survey-based estimate since 2012. For nearly half a decade, there was a complicit silence on the country’s poverty level, despite the critical need for updated data to direct development programmes to the right population groups.
In the absence of official figures, several unofficial estimates have emerged over the past two years. While these estimates are not officially endorsed, they are widely referenced by government policymakers and leaders. They frequently make headlines, reintroducing poverty as a key development indicator into public discourse.
Despite differences in methodologies, these estimates share a common conclusion: Poverty in India has reduced drastically and is now at historic lows.
The most recent addition to these unofficial estimates is by State Bank of India (SBI) Research. Using data from the Union Ministry of Statistics and Programme Implementation’s Household Consumption Expenditure Survey (2023-24), SBI Research released its findings in early January 2025. It estimated India’s poverty rate at 4-4.5 per cent — the lowest ever — indicating a near-eradication of poverty.
The monthly per capita consumption expenditure (MPCE) for 2023–24 stands at Rs 4,122 for rural areas and Rs 6,996 for urban areas, according to SBI Research. This translates to daily expenditures of Rs 137 and Rs 233, respectively. These figures cover all essential living costs but exclude government benefits.
MPCE serves as a proxy for income, making it a useful tool to gauge economic well-being. However, estimating poverty levels requires a poverty line. SBI Research updated the 2011-12 poverty line for 2023-24, setting it at 1,632 per month for rural areas and Rs 1,944 for urban areas. Individuals with income levels below these thresholds are classified as poor. By comparison, the 2011-12 poverty lines were Rs 816 and Rs 1,000, respectively.
The new poverty lines are highly contentious — but so were the 2011-12 ones, which were contested for being out of sync with economic realities as well as for the methodology adopted to draw them. In both cases, the poverty lines have been drawn based on the methodology proposed by the Expert Group to Review the Methodology for Estimation of Poverty (popularly known as the Tendulkar committee, chaired by economist Suresh Tendulkar) in 2009.
This methodology came under so much criticism that the erstwhile Planning Commission set up another expert group in 2014 (the Rangarajan committee, chaired by Former Governor of the Reserve Bank of India C Rangarajan) to review poverty estimation.
The difference between these two expert groups is glaring. Going by the 2009 methodology, 25.7 per cent of rural India and 13.7 per cent of urban India were poor in 2011-12. But the 2014 methodology found that 30.9 per cent of the rural population and 26.4 per cent of the urban population were poor in the same period.
The then United Progressive Alliance-II government did not accept the Rangarajan estimates. The current incumbent political leadership made this a big electoral issue at the time, while junking the Tendulkar estimates as well.
It is widely accepted that the Rangarajan committee’s poverty line and estimates were the closest to reality. What would be the poverty estimate if the Rangarajan methodology were applied to the current expenditure survey? In the July-December 2024 edition of the journal Review of Agrarian Studies, a comprehensive study applies the methodology to the 2022-23 household consumption and expenditure survey.
This study, done by CA Sethu, LT Abhinav Surya and CA Ruthu, constructs the poverty lines as Rs 2,515 per capita per month for rural areas and Rs 3,639 for urban areas. Based on this line, 27.4 per cent of the rural and 23.7 per cent of the urban populations are poor; overall in the country, 26.4 per cent of the population is poor.