Poverty Reduction in India – World Bank Report 2026

Poverty Reduction in India

Poverty Reduction in India Latest News

  • The World Bank’s October 2026 Poverty and Equity Brief reported a significant decline in India's extreme poverty rate to 2.6% in 2023, from 27.1% in 2011, while highlighting persistent wage disparities and regional concentration of poverty.

Understanding Poverty and Its Measurement

  • Poverty is a multidimensional development challenge involving inadequate income, limited access to essential services and insufficient opportunities for a dignified standard of living. It is generally assessed through two broad approaches:
    • Monetary poverty: Measures whether individuals or households have sufficient income or consumption expenditure to meet a defined poverty threshold.
    • Multidimensional poverty: Assesses deprivation across indicators such as health, education and living standards.
  • The World Bank uses international poverty lines expressed in purchasing power parity (PPP) terms to compare poverty across countries.

Purchasing Power Parity (PPP)

  • PPP measures the relative purchasing power of currencies by accounting for differences in the prices of goods and services across countries. 
  • It helps compare living standards by estimating how much of a common basket of goods and services can be purchased in different economies.
  • The World Bank's revised international poverty lines include:

  • These thresholds are expressed in 2021 PPP terms. They should not be directly converted using prevailing market exchange rates.

India's Progress in Poverty Reduction

  • According to the World Bank's October 2026 Poverty and Equity Brief, India has recorded one of the fastest reductions in poverty globally over the past decade.
  • Between 2011 and 2023, the proportion of India's population living below the lower-middle-income poverty line of $4.20 per day declined from 57.7% to 16.1%. This represents an estimated 496 million people moving above that poverty threshold.
  • Extreme poverty also declined substantially, from 27.1% in 2011 to 2.6% in 2023.

 Reduction in Poverty in India

  • The reduction in extreme poverty between 2022-23 and 2023 indicates that the rate was approximately halved over the period.

Multidimensional Poverty Reduction

  • India has also made progress in reducing non-monetary deprivation.
  • The World Bank's brief highlighted the following trends:
    • India's Multidimensional Poverty Index (MPI), based on the Oxford Poverty and Human Development Initiative (OPHI) methodology, declined from 53.8% in 2005-06 to 16.4% in 2019-21.
    • The World Bank's MPI measure for India stood at 15.5% in 2022-23.
  • These indicators suggest improvements extending beyond household consumption and income.

Factors Behind Poverty Reduction

  • The World Bank identified multiple factors contributing to India's progress:
    • Strong consumption growth: Rising household consumption has contributed to improvements in living standards.
    • Employment expansion: Employment increased by approximately 13.4 crore people between 2017 and 2023, nearly twice the growth in the working-age population.
    • Women's workforce participation: Much of the employment increase was driven by rural women entering paid work, increasing the number of earners within households.
    • Social transfers: Expanded government support, including food subsidies, contributed to improved household welfare.

Persistent Challenges: Inequality and Regional Concentration

  • Despite substantial progress, the World Bank identified structural challenges that could affect the sustainability and inclusiveness of poverty reduction.
  • Wage Inequality
    • Wage disparities remain pronounced in India. In 2023, median earnings among the top 10% of workers were approximately 13 times those of the bottom 10%.
    • At the same time, the consumption-based Gini index declined from 28.8 in 2011-12 to 25.5 in 2022-23 and further to 23.0 in 2023.
    • However, the World Bank cautioned that household consumption surveys may not fully capture the consumption of wealthier households and could therefore understate inequality.
  • Geographical Concentration of Poverty
    • Poverty is becoming increasingly concentrated geographically. Approximately 57% of India's poor population lives in a contiguous belt stretching from Uttar Pradesh to West Bengal.
    • This concentration means that further poverty reduction will depend substantially on improving economic opportunities and creating productive employment in these States.
  • Employment Quality and Youth Unemployment
    • Although employment expanded significantly between 2017 and 2023, the World Bank noted that real earnings remained broadly unchanged, with employment growth concentrated in relatively low-productivity activities.
    • Youth unemployment also increased from 14.6% in the first quarter of FY2025-26 to 15.9% in the corresponding quarter of FY2026-27. The increase was particularly notable among rural young women.
    • These trends highlight the distinction between employment generation and the creation of stable, productive and adequately remunerated jobs.

Future Poverty Projections

  • The World Bank expects poverty in India to continue declining, although at a more gradual pace.
  • According to its projections, the proportion of the population below the $4.20-per-day lower-middle-income poverty line is expected to decline to 14.2% in 2026 and further to 12.1% by 2028.

Source: TH | IE

Poverty Reduction in India FAQs

Q1: What is India's extreme poverty rate according to the World Bank's October 2026 brief?

Ans: India's extreme poverty rate declined to 2.6% in 2023, from 27.1% in 2011, using the $3-per-day poverty line in 2021 PPP terms.

Q2: What is the lower-middle-income poverty line?

Ans: The World Bank's lower-middle-income poverty threshold is $4.20 per person per day in 2021 PPP terms.

Q3: What is Purchasing Power Parity (PPP)?

Ans: PPP compares the purchasing power of currencies by accounting for differences in the prices of goods and services across countries.

Q4: How many people moved above India's lower-middle-income poverty threshold between 2011 and 2023?

Ans: The World Bank estimated that approximately 496 million people moved above the $4.20-per-day poverty threshold during this period.

Q5: What is India's Multidimensional Poverty Index trend?

Ans: The OPHI-based MPI declined from 53.8% in 2005-06 to 16.4% in 2019-21, while the World Bank's MPI measure stood at 15.5% in 2022-23.

State Legislative Councils: Composition, Elections and Relevance

State Legislative Councils

State Legislative Councils Latest News

  • Recently, elections were held for 28 Legislative Council seats in four states. These polls have drawn attention to the unusual and complex system used to elect Members of Legislative Councils (MLCs). Unlike Assembly elections, not every adult citizen can vote in them.

A Second Chamber for States

  • India has two types of legislatures. Unicameral legislatures have one House. Bicameral legislatures have two Houses.
  • The Constitution makes Parliament bicameral, with the Lok Sabha and Rajya Sabha. 
  • For states, however, a second chamber is optional. This chamber is called the Legislative Council (Vidhan Parishad).

Debate in the Constituent Assembly

  • The framers disagreed on whether states needed a second chamber.
  • Arguments in favour:
    • It would bring diverse viewpoints into lawmaking.
    • It would act as a voice of reason.
    • It would check hasty decisions of the directly elected House.
  • Arguments against:
    • It would be expensive.
    • It would slow down government action.
    • Parties could use its seats to reward loyalists.
  • The framers reached a middle path. They let states decide whether they want a Council. 
  • They also capped its size and limited its powers. This created a unique institution.

Present Status

  • Currently, six states have Legislative Councils: Andhra Pradesh, Bihar, Maharashtra, Karnataka, Uttar Pradesh and Telangana.
  • Uttar Pradesh has the largest Council (100 seats). Telangana has the smallest (40 seats).
  • The Representation of the People Act, 1950 also provides seats for Madhya Pradesh and Tamil Nadu, but their Councils are not operational.

Composition of the Council

  • Article 171 governs the size and structure of Councils.
    • Minimum size: 40 members.
    • Maximum size: One-third of the total strength of the Legislative Assembly.
  • Members are chosen as follows:
    • One-third elected by MLAs.
    • One-third elected by members of local bodies.
    • One-twelfth elected by graduates.
    • One-twelfth elected by teachers.
    • The remaining nominated by the Governor.
  • The Representation of the People Act, 1950 lays down the exact seat break-up for each Council.

Key Features of MLC Membership

  • Term: Six years.
  • Continuity: One-third of members retire every two years.
  • Eligibility: A candidate must be at least 30 years old and a voter in the state.
  • Nominations: The Governor nominates residents with expertise in literature, science, art, the co-operative movement and social service.

Who Votes in MLC Elections?

  • MLA Constituency - This is the simplest category. Only sitting MLAs vote.
  • Territorial Constituencies - The other three categories are territorial. Eligible voters within a specific area elect their representative.
    • Local authorities: Only sitting members of local bodies can vote.
    • Graduates: The voter must be a citizen, ordinarily resident in the constituency, and must have held a graduate degree from any Indian university for at least three years.
    • Teachers: The voter must have taught for at least three years in the last six years in an institution not lower than secondary school.
  • Special Electoral Rolls - Rolls for graduate and teacher constituencies are prepared afresh before every election. Even existing voters must re-apply. Eligibility is counted from the qualifying date of November 1 each year.
  •  

Rationale for Graduate and Teacher Seats

  • Representation of specific groups began before Independence. The Government of India Act, 1935 provided seats on religious, economic and social grounds.
  • In the Constituent Assembly, arguments were made that the Council should represent a province’s intelligentsia. 
  • It suggested that subsets of voters, such as graduates, trade unions, local body members and professionals, should elect some members. This idea was adopted in the Constitution.

How Voting Works

  • Single Transferable Vote: General elections are simple: one voter, one vote, one candidate. This allows the use of EVMs. MLC elections, however, use proportional representation through the Single Transferable Vote (STV), as in Rajya Sabha elections. 
  • That is why they still use ballot papers.
    • The ballot lists all candidates, along with NOTA.
    • Voters rank candidates by writing 1, 2, 3 and so on.
    • A candidate needs a fixed quota of votes to win.
    • Quota formula: (Total valid votes ÷ (Seats + 1)) + 1.
    • Surplus votes of winners pass to the next preferences. The lowest-ranked candidate is eliminated, and their votes are transferred. This continues until all seats are filled.

Secret Ballot vs Open Ballot

  • In Rajya Sabha elections, MLAs must show their ballot to their party’s agent. Parliament introduced this open ballot system in 2003 to curb cross-voting.
  • In MLC elections, the MLAs’ vote remains secret. They need not show it to anyone.

How Councils Differ from Rajya Sabha

  • Legislative Councils are much weaker than the Rajya Sabha.
  • Permanence: Rajya Sabha is a continuous body. A Council’s existence depends on the Assembly. Under Article 169, Parliament can create or abolish a Council if the Assembly passes a resolution by a special majority.
  • Legislative power: Councils cannot shape laws passed by the Assembly. They can only delay ordinary bills; the Assembly has the final say.

Concern over Stability

  • In 2013, a Parliamentary Committee examining a proposed Council for Rajasthan called for a national policy on creating and abolishing Councils. 
  • It warned that a second chamber should not depend on the mood of the government of the day.

Conclusion

  • Legislative Councils give a voice to the educated, teachers and local governments in state lawmaking. Yet their limited powers and dependence on ruling majorities weaken their role. 
  • A clear national policy on their creation and abolition can make Councils stable, credible and truly deliberative institutions.

Source: IE

State Legislative Councils FAQs

Q1: What are State Legislative Councils?

Ans: State Legislative Councils are the upper houses of bicameral state legislatures, providing a second chamber for deliberation and review of legislation passed by Legislative Assemblies.

Q2: Which states in India currently have Legislative Councils?

Ans: State Legislative Councils currently exist in six states: Andhra Pradesh, Bihar, Maharashtra, Karnataka, Uttar Pradesh and Telangana, with membership varying across states.

Q3: How are members of State Legislative Councils elected?

Ans: State Legislative Councils comprise members elected by MLAs, local authorities, graduates and teachers, alongside members nominated by the Governor under Article 171.

Q4: What is the minimum and maximum strength of a Legislative Council?

Ans: State Legislative Councils must have at least 40 members, while their maximum strength cannot exceed one-third of the corresponding State Legislative Assem.

Q5: Can a State Legislative Council be abolished?

Ans: Yes. Under Article 169, Parliament can abolish State Legislative Councils through legislation after the concerned Assembly passes a resolution by special majority.

Ballot Papers in Indian Elections: Where and Why They Are Used

Ballot Papers in Indian Elections

Ballot Papers in Indian Elections Latest News

  • Recently, elections were held for 28 Legislative Council (MLC) seats across the country. PM Modi took a swipe at the opposition party, noting that MLC elections use ballot papers, not EVMs. The Opposition Party has blamed EVMs for its past electoral losses.
  • The remarks have revived the EVM vs ballot paper debate. This raises a key question: which elections in India still use ballot papers, and why?

Ballot Papers in Panchayat Elections

  • Most elections to Gram Panchayats, Panchayat Samitis and Zilla Parishads still use ballot papers.
  • A 2023 study by the Indian Institute of Public Administration (IIPA), sponsored by the Ministry of Panchayati Raj, found:
    • 53% of states use ballot papers for Gram Panchayat elections.
    • Only three States/UTs (Kerala, Sikkim, and Dadra & Nagar Haveli and Daman & Diu) use EVMs in all Gram Panchayat constituencies.
    • 22% of states are in transition. They use EVMs in some constituencies and ballot papers in others.
    • EVM use rises at higher tiers. In Zilla Panchayat elections, 17% of states use EVMs in all constituencies.

Reasons Given by States

  • States using ballot papers cited two main hurdles:
    • Lack of funds.
    • Lack of voter awareness about EVMs.
  • The IIPA report found the awareness argument weak. The same voters use EVMs in Assembly and Lok Sabha elections.

Drawbacks of Ballot Papers

  • The report highlighted several problems:
    • Counting is slow and cumbersome.
    • It requires huge manpower.
    • It is not environment-friendly.

Ground Realities

  • Local practices also explain the continued use of ballot papers.
  • Non-party symbols: In rural local body polls, tehsildars allot symbols days before the election. Candidates give three choices and get one. These are not regular party symbols.
  • Personal connect matters: A former sarpanch from Maharashtra noted that a candidate’s closeness to voters and help with daily work matter more than ideology in these polls.
  • Simultaneous polls: A Bihar official said elections for multiple tiers happen at the same time. Using so many machines would be difficult, so ballot papers are more practical.
  • Can EVMs Handle Local Symbols?
    • Yes. Former Election Commissioner Ashok Lavasa explained that a process called “symbol loading” allows the required local symbols to be loaded onto EVMs.

Municipal and Student Union Elections

  • Municipal Bodies
    • Municipal elections fall under the State Election Commissions (SECs). SECs can choose between EVMs and ballot papers.
      • Municipal Corporation of Delhi: Uses EVMs.
      • Punjab: Shifted to ballot papers in 2026.
    • The Punjab and Haryana High Court upheld this choice. It noted that the Punjab Municipal Election Rules, 1994 permit both methods, leaving the decision to the SEC.
  • Student Unions
    • Student union polls also use both methods.
    • Delhi University Students’ Union (DUSU): Uses EVMs. Candidate names appear in alphabetical order, so names and ballot numbers matter.
    • Jawaharlal Nehru University Students’ Union (JNUSU): Uses ballot papers.

Single Transferable Vote: Where Ballot Papers Are Necessary

  • Some elections must use ballot papers. These are elections held through the Single Transferable Vote (STV) system.
  • Legislative Councils - Under Article 171, MLC elections follow proportional representation through STV. Voters mark their first, second, third and further preferences. This ranking makes the vote transferable. It can only be done on paper, not on an EVM.
  • Rajya Sabha - Rajya Sabha elections also use STV and ballot papers. Here, voting MLAs follow an open ballot; they must show their vote to their party’s agent.

How the STV Quota Works

  • A formula decides the votes needed to win.
  • Quota = [Total votes ÷ (Number of seats + 1)] + 1
  • Example:
    • 200 MLAs vote for 4 seats.
    • 200 ÷ (4 + 1) = 40.
    • Quota = 40 + 1 = 41 votes.
  • Any candidate with 41 first-preference votes is elected.
  • If seats remain vacant, surplus votes of winners are transferred. For instance, a winner with 45 votes has 4 surplus votes. These go to the second-preference candidates.
  • If several winners have surpluses, the largest surplus is transferred first.
  • If seats still remain, the candidate with the fewest first-preference votes is eliminated. Their votes move to the next preference. This continues until all seats are filled.

Conclusion

  • Ballot papers remain vital where STV voting, local symbols or simultaneous multi-tier polls make EVMs impractical. However, slow counting, high costs and environmental concerns persist. 
  • Gradual, well-funded adoption of EVMs in local polls, with strong voter trust, can balance efficiency and credibility.

Source: IE

Ballot papers in Indian elections FAQs

Q1: Which elections in India still use ballot papers?

Ans: Ballot papers in Indian elections are still used in many Panchayat polls, some municipal and student union elections, and elections conducted through proportional representation.

Q2: Why do states continue using ballot papers in Panchayat elections?

Ans: Ballot papers in Indian elections persist in Panchayat polls because states cite financial constraints, simultaneous multi-tier elections and practical difficulties in deploying sufficient EVMs.

Q3: What are the major disadvantages of using ballot papers?

Ans: Ballot papers in Indian elections involve slower counting, substantial manpower requirements and environmental costs, making electronic voting machines more efficient for many electoral settings.

Q4: Why are ballot papers necessary in Legislative Council elections?

Ans: Ballot papers in Indian elections are necessary for Legislative Council polls because Single Transferable Vote requires voters to rank candidates by preference.

Q5: How does the Single Transferable Vote system work?

Ans: Under ballot papers in Indian elections using STV, voters rank candidates; surplus votes transfer to preferences, while votes of eliminated candidates are redistributed until seats are filled.

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