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World Bank's India poverty brief applies 2021 PPP lines to surveys

By CAShorts DeskPublished Source: The Hindu; The Indian Express (World Bank, Poverty & Equity Brief: India, October 2026); UNDP Human Development Reports

World Bank's India poverty brief applies 2021 PPP lines to surveys
Illustration (AI-generated)

The World Bank's Poverty & Equity Brief for India, released on 30 October 2026, estimates that the share of people below its $4.20-a-day line fell from 57.7% in 2011 to 16.1% in 2023. That lifted about 496 million people out of poverty. Extreme poverty, measured at $3.00 a day, fell from 27.1% to 2.6% over the same years.

Syllabus: GS3 · Indian Economy & Growth; GS3 · Inclusive Growth; Prelims · Economy & Social Development

Why this matters for UPSC

GS2 poverty and GS3 inclusive growth: how the World Bank measures poverty. Prelims can ask PPP, the three poverty lines, the Gini index and the MPI; Mains, jobs and regional gaps.

Why it matters

A young woman in a village who takes her first paid job adds a second earner to her household, and that extra income is a large part of why families crossed the line. Yet the poor who remain are harder to reach: they live mostly in a belt of northern and eastern States, have less schooling and depend on insecure work. Cash transfers and food subsidies can keep such families above the line, but only steady, better-paid jobs keep them there for good. Flat real wages and rising joblessness among the young mean the next fall in poverty will come more slowly. Because the surveys may miss what the rich spend, the true gap between rich and poor is probably wider than the survey shows.

Prelims pointers

  • The World Bank sets its international poverty lines in PPP dollars; the base moved from 2017 PPPs to 2021 PPPs in 2025.
  • Before 2025 the extreme poverty line was $2.15 a day in 2017 PPP; it is now $3.00 a day in 2021 PPP.
  • The Gini index runs from 0 (perfect equality) to 100 (one person holds everything); a higher value means more inequality.
  • The global MPI, published by UNDP's Human Development Report Office, scores ten indicators across health, education and standard of living.
  • Monetary poverty counts people whose consumption falls below a line; the MPI counts people deprived on several indicators at once, whatever they spend.

Practise a UPSC-style question

With reference to purchasing power parity (PPP), consider the following statements:

1. PPP conversion removes differences in price levels when living standards are compared across countries.

2. PPP rates are produced under the International Comparison Program, a partnership of official statistical agencies.

3. The World Bank moved its poverty lines from a 2017 PPP base to a 2021 PPP base.

Which of the statements given above is/are correct?

  1. (a) 1 and 2 only
  2. (b) 2 and 3 only
  3. (c) 1 and 3 only
  4. (d) 1, 2 and 3
Show the answer

Answer: (d) 1, 2 and 3

Answer: (d) 1, 2 and 3. All three describe how PPP works and how the World Bank uses it.

Statement 1: correct. PPP converts the cost of a common basket into one currency, stripping out differences in price levels between countries.

Statement 2: correct. The International Comparison Program, a partnership of official statistical agencies coordinated by the World Bank, supplies PPP rates.

Statement 3: correct. In 2025 the World Bank changed its base year for poverty lines from 2017 PPPs to 2021 PPPs.

Eliminate: Statement 3 is correct, since the 2025 update moved the base to 2021 PPPs. Out: (a).

Eliminate: Statements 1 and 2 are correct, as PPP removes price-level gaps and the ICP produces the rates. Out: (b), (c).

Trap: Sounds right. A student who thinks PPP is just the market exchange rate may doubt statement 1 and pick a narrower code.

Remember: PPP compares what money buys, not what it fetches on the currency market.

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