How poor is India now? HCES evidence and international poverty lines

Detail

1. What the HCES is and why it matters

• Household Consumption Expenditure Survey (HCES) is a sample survey run by the NSO (National Statistical Office), MoSPI. It asks households how much they spend on goods and services.
• Why it matters. The same survey feeds three things:
• it is used to measure poverty, inequality and social exclusion;
• it updates the basket and weights of the Consumer Price Index (CPI);

• its main output is the MPCE [2].

• MPCE (monthly per capita consumption expenditure) is the household's total monthly spending divided by the number of members. It is the survey's main indicator for most analysis [2].

• Formula: MPCE = household monthly consumption expenditure ÷ household size.

• Example: a family of 5 spends ₹20,000 a month, so MPCE = 20,000 ÷ 5 = ₹4,000.

• Why consumption and not income? India measures poverty using consumption, because:

• many households, such as farmers and informal workers, have uneven or unrecorded incomes;

• spending is steadier and easier to recall.

• Two surveys back to back. MoSPI ran two surveys after Covid-19 [2]:

• HCES 2022-23 (fieldwork August 2022 to July 2023). The factsheet came out in February 2024, and the detailed report and unit-level data in June 2024.

• HCES 2023-24 (fieldwork August 2023 to July 2024). The factsheet came out on 27 December 2024.

• Sample, 2023-24: 2,61,953 households (1,54,357 rural and 1,07,596 urban), spread across all states and UTs [2].

2. What changed in the survey design

• MMRP (modified mixed reference period). The reference period (or recall period) is the length of time a household is asked to remember its spending. MMRP uses different periods for different items:
• 7 days for items bought often and eaten fast, such as vegetables, fruit, eggs, fish, meat, edible oil, beverages and processed food;
• 30 days for other food, fuel and regular services;

• 365 days for items bought rarely, such as clothing, footwear, durable goods, education and hospital care.

• Earlier methods:

• URP (uniform reference period): a 30-day recall for every item.

• MRP (mixed reference period): a 365-day recall for five items bought rarely, and 30 days for everything else.

• Why recall length changes the poverty count.

• A shorter recall means people forget less.
• So recorded consumption is higher.

• A higher MPCE puts fewer people under any fixed line, so measured poverty falls even if real life did not change.

• Several visits per household. The questionnaire is split across visits, which reduces tiredness and recall errors.

• Imputation of free items. To impute means to assign a money value to something the household received but did not pay for. Examples:
• PDS grain (Public Distribution System: subsidised or free ration grain);

• free laptops, bicycles and school uniforms from state schemes.

• HCES therefore gives two sets of MPCE [2]:

• (i) without the imputed value of free items;
• (ii) with the imputed value of free items.

3. The HCES numbers

MPCE (₹, current prices)	Rural	Urban	Urban-rural gap
2011-12 (NSS 68th round, July 2011 to June 2012)	₹1,430 [2]	₹2,630 [2]	about 84%
2022-23 (without imputation)	₹3,773	₹6,459	about 71%
2023-24 (without imputation)	₹4,122	₹6,996	about 70%
2023-24 (with imputation)	₹4,247 [2]	₹7,078 [2]	—

• Urban-rural gap formula = (Urban MPCE − Rural MPCE) ÷ Rural MPCE × 100.
• 2011-12: (2,630 − 1,430) ÷ 1,430 × 100 ≈ 84%.
• 2022-23: (6,459 − 3,773) ÷ 3,773 × 100 = 2,686 ÷ 3,773 × 100 ≈ 71%.
• 2023-24: (6,996 − 4,122) ÷ 4,122 × 100 = 2,874 ÷ 4,122 × 100 ≈ 70%.

• Meaning: in 2023-24, an average urban person spent about 1.7 times as much as an average rural person. In 2011-12 the urban person spent about 1.84 times as much.

• Nominal growth (at current prices), 2022-23 to 2023-24: about 9% rural and 8% urban [2].

• Check: 4,122 ÷ 3,773 = 1.092, so a 9.2% rise.

• Real growth (at 2011-12 prices, so inflation is removed) [2]:

• Rural: ₹1,430 (2011-12) → ₹2,008 (2022-23) → ₹2,079 (2023-24). That is about 45% real growth over 12 years.

• Urban: ₹2,630 → ₹3,510 → ₹3,632. That is about 38%.

• Who gained most. Rank the population by MPCE. Between 2022-23 and 2023-24, the largest rise in average MPCE came for the bottom 5-10%, in both rural and urban areas [2].

• Imputation adds little to the average. Free items raise rural MPCE by ₹125 (about 3%) and urban MPCE by ₹82 (about 1%) in 2023-24 [2]. The effect is still larger for poor households, whose own spending is small.
• Spending pattern, 2023-24: non-food items take about 53% of rural and 60% of urban MPCE [2].
• Within food, beverages, refreshments and processed food have the largest share.
• Rent is about 7% of urban household spending.

• A falling food share is a classic sign of rising living standards (Engel's law: as income rises, the share spent on food falls).

• Inequality has fallen. The Gini coefficient measures inequality from 0 (everyone equal) to 1 (one person has everything).

• Rural: 0.266 (2022-23) → 0.237 (2023-24) [2][3].
• Urban: 0.314 (2022-23) → 0.284 (2023-24) [2][3].
• Consumption inequality fell in almost all 18 major states [3].
• All 18 major states showed higher average MPCE in both rural and urban areas [3].

4. No official poverty line, so estimates compete

• India has no official poverty line after the Tendulkar (2009) and Rangarajan (2014) methods. The Rangarajan line was never formally adopted. So different groups apply old lines to new HCES data.
• Headcount ratio (HCR) is the share of people below the poverty line.
• Formula: HCR = (number of people below the line ÷ total population) × 100.

• Example: 7.5 crore poor out of about 143 crore people gives 7.5 ÷ 143 × 100 ≈ 5.2%.

• Tendulkar line, updated for prices: poverty below about 5%.

• The NITI Aayog CEO said this in 2024, for 2022-23.

• SBI Research put it at about 4.9% rural and 4.1% urban for 2023-24 (verify; not confirmed from an official source).

• Rangarajan-type line (a higher line, so more people count as poor): about 10% (Rangarajan-Dev estimate; verify).

• Multidimensional poverty (a non-income measure), for comparison:
• The National MPI (Multidimensional Poverty Index) from NITI Aayog counts people who are deprived in health, education and standard of living. It does not use spending.
• It fell from 29.17% (2013-14) to 11.28% (2022-23). About 24.82 crore people escaped multidimensional poverty in those 9 years [6].
• Uttar Pradesh had the largest fall (5.94 crore), followed by Bihar (3.77 crore), Madhya Pradesh (2.30 crore) and Rajasthan (1.87 crore) [6].
• NITI projected that India would reach single-digit multidimensional poverty during 2024 [6].

5. Why comparing across years is disputed

• Data gap. The 2017-18 consumption survey was withheld by the government over "data quality" concerns. So there is no official consumption data between 2011-12 and 2022-23.
• Method changes. The recall period moved URP → MRP → MMRP, and the whole questionnaire design also changed.
• So part of the fall in poverty may come from the method change itself, not from real gains.

• The World Bank notes that India's data moved from URP to MMRP, and it revised India's series to take this into account [4].

• Imputation choice. Estimates that include free PDS grain show lower poverty than estimates that leave it out. Always check which MPCE series was used.

6. The international poverty line (IPL, World Bank)

• IPL is the World Bank's global threshold for extreme poverty.
• It is set in PPP dollars per person per day.

• It is revised with each new ICP/PPP round.

• PPP (purchasing power parity) is an exchange rate that equalises what money can buy across countries. It is not the market exchange rate.

• Illustrative example (the numbers are made up): if 1 PPP dollar buys in India what ₹20 buys, then $3.00/day = ₹60/day ≈ ₹1,800 per person per month.
• This conversion factor is lower than the market rate, because many goods and services are cheaper in India.

Line	PPP base	Year adopted
$1.00/day	1985 PPP	World Development Report 1990
$1.25	2005 PPP	2008
$1.90	2011 PPP	2015
$2.15	2017 PPP	2022
$3.00	2021 PPP	June 2025

• How $3.00 was set:
• the World Bank took the national poverty lines of 23 low-income countries;
• it converted them to 2021 PPP dollars;

• the median was $3.04, which is Burkina Faso's 2022 line, rounded to $3.00 [4].

• Higher lines [4]:

• $4.20 for lower-middle-income countries, up from $3.65 (+15%);
• $8.30 for upper-middle-income countries, up from $6.85 (+21%).

• The rise reflects both new PPPs and updated national lines.

• Global picture: about 838 million people were in extreme poverty in 2022 at $3.00. This is about 125 million more than earlier estimates, because the line was raised [4]. Extreme poor people are increasingly concentrated in Sub-Saharan Africa.

• India is a lower-middle-income country, so the World Bank also reports India against the $4.20 line.

7. India under World Bank lines

Line	2011-12	2022-23
$3.00/day (extreme)	27.1% (about 34 crore)	5.25%, rounded to 5.3% (about 7.5 crore; 75.24 million) [5]
$2.15/day (old IPL)	16.2%	2.35%
$4.20/day (LMIC line)	57.7% [5]	23.9% (about 34.2 crore) [5]

• Status check. The World Bank's April 2026 update may have revised these figures (verify). The latest brief retrieved here, October 2025, still shows 5.3% at $3.00 [5].
• At the $4.20 line [5]:
• Rural: 64.9% → 27.7%, a fall of 7.4% a year (2011-12 to 2022-23).

• Urban: 39.7% → 14.3%, a fall of 8.9% a year.

• Where the poor live [5]:

• 46% of India's poor lived in Uttar Pradesh, Bihar and Maharashtra in 2022-23, up from 41% in 2011-12.

• 72% live in ten lagging states.

• Why poverty fell [5]:

• social transfers, such as subsidised food;

• employment growing faster than the working-age population since 2021-22.

• Risks that remain [5]:

• 29% of tertiary-educated youth were unemployed in 2023-24.

• Other World Bank measures for India [5]:

• World Bank Gini index 25.5 (2022-23 data);
• World Bank MPI measure 15.5% (2022-23);
• National MPI fell from 53.8% (2005-06) to 16.4% (2019-21).

8. SDG targets

• SDG 1.1: end extreme poverty (living below the IPL) for all people everywhere by 2030.
• SDG 1.2: at least halve the share of people in poverty "in all its dimensions" by national definitions by 2030.
• India tracks SDG 1.2 using the National MPI, among other measures.

9. National and international lines can disagree (the Pakistan case)

• Class 11, Comparative Development Experiences of India and its Neighbours, shows this with Pakistan:
• Pakistan's poverty "on the international poverty line" looked healthy;

• at the same time, its official national data showed poverty rising.

• Lesson: the answer to "how poor?" depends on which line you use, which survey and which recall method. Always name all three.

• Class 10 link (Development chapter): averages hide disparities. A high average MPCE can sit alongside deep poverty in some regions, as the concentration of poor people in UP and Bihar shows.

Prelims Hooks

• HCES is conducted by the NSO under MoSPI. Its data are also used to revise CPI weights, not only to measure poverty [2].
• MMRP uses 7-day, 30-day and 365-day recall periods. URP uses a 30-day recall for every item.
• HCES 2023-24 MPCE (without imputation): rural ₹4,122, urban ₹6,996. With imputation: ₹4,247 and ₹7,078 [2].
• Urban-rural MPCE gap: 84% (2011-12) → 71% (2022-23) → 70% (2023-24).
• Gini (consumption), 2023-24: rural 0.237, urban 0.284. Both fell from 2022-23 [2].
• $3.00/day (2021 PPP) was adopted in June 2025. It is the median of the national lines of 23 low-income countries (Burkina Faso, $3.04) [4].
• Trap: $4.20 is the line for lower-middle-income countries and $8.30 for upper-middle-income countries. $3.65 and $6.85 were the old 2017-PPP values [4].
• India, extreme poverty ($3.00): 27.1% (2011-12) → 5.3% (2022-23). At the $4.20 line: 57.7% → 23.9% [5].
• National MPI (NITI): 29.17% (2013-14) → 11.28% (2022-23), with 24.82 crore people exiting poverty [6].
• SDG 1.1 uses the international line. SDG 1.2 uses national definitions ("halve").

Mains Points

• Is poverty really near 5%?
• For: the MPCE rise, the narrowing urban-rural gap, the falling Gini and the World Bank's $3.00 estimate of 5.3% all point the same way [2][5].
• Against: the 2017-18 survey was withheld, MMRP and the new design break comparability, and there is no official line.

• Balanced answer: the direction of change is clear, but the exact level depends on the method.

• Measurement policy. Recommend the following:

• adopt an official, revisable poverty line;
• publish a series with overlapping survey methods, so the effect of the method change can be separated from real change;
• release unit-level data on time.

• This is a GS-II link to governance and statistical credibility.

• The level of the line matters.

• Extreme poverty is 5.3%, but 23.9% of Indians are below the $4.20 lower-middle-income line. Poverty is concentrated in UP, Bihar and Maharashtra (46% of the poor) [5].

• Policy should shift from ending destitution to reducing vulnerability: jobs, human capital and help for lagging states.

• Transfers versus earnings.

• Free PDS grain and other social transfers helped cut poverty [5]. But the rise in MPCE from imputation is small (about 3% rural) [2].
• Lasting gains need productive employment. The World Bank notes that 29% of educated youth were unemployed in 2023-24 [5].
• Also, a consumption Gini understates inequality compared with income or wealth measures. This matters for GS-III answers on inclusive growth.