With extreme poverty near elimination, should India shift its benchmark to the Lower Middle-Income poverty line? Discuss the policy implications.

The World Bank's Poverty and Equity Brief (October 2026) shows India's extreme poverty ($3.00/day, 2021 PPP) falling from 27.1% (2011) to 2.6% (2023). However, 16.1% still live below the $4.20/day Lower Middle-Income (LMIC) line [1]. India is a lower-middle-income country, so the LMIC line should become its working benchmark, anchored to a new national poverty line.

Why the shift is justified

• $3.00 has lost meaning: at 2.6% it barely tells the poor apart. Around 34 crore people remain below $4.20 [1].
• Near-poor vulnerability: about 13.5% of Indians live between the two lines. One illness or crop failure could push them back below $3.00.
• Welfare-dependent gains: HCES 2022-23 counts free PDS grain as consumption [3]. Measured gains therefore depend on these transfers continuing.

Caveats

• Comparability: HCES changed its item list and questionnaires and moved to CAPI, and MoSPI cautions against direct comparison [3]. The World Bank adds that recent gains partly reflect better measurement [1].
• Competing estimates: for example, 5.25% for 2022-23 (PIB) against 2.6% for 2023 [2][1]. India has had no updated national line since the Rangarajan Committee (2014).

Policy implications

• Spatial targeting: about 57% of the poor live in the UP–West Bengal belt, and rural poverty (19.3%) is more than twice urban poverty (8.6%) [1]. This calls for state-specific plans, the Aspirational Blocks Programme and needs-based fiscal transfers.
• From transfers to jobs: real earnings have stayed flat, and youth unemployment rose from 14.6% to 15.9% [1]. The policy focus should move to productive non-farm work and skilling.
• Graduation, not dependency: welfare should shift from permanent food support to resilience, through insurance, assets and livelihoods.
• Measuring inequality: the top 10% earn about 13 times what the bottom 10% earn, and surveys likely understate inequality [1]. MoSPI should add income data alongside consumption data.
• Statistical reform: a new expert group should set a national line using HCES 2022-23 and 2023-24. The $4.20 line would serve as an international cross-check and the MPI as a non-monetary complement.

Ending extreme poverty is a milestone, not the finish line. Adopting the LMIC benchmark through transparent, comparable data would move India's focus from survival to secure livelihoods. This fulfils the Article 38(2) mandate to reduce income inequalities and advances SDG 1 towards a Viksit Bharat.