UPSC Prelims Practice Questions — India made ‘remarkable progress’ in reducing poverty, says World Bank

Q1. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. In the same year, the share of a country's population counted as multidimensionally poor can exceed the share living below the international extreme poverty line.
  2. The Global Multidimensional Poverty Index is computed from household survey microdata rather than from national income accounts.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q2. Which one of the following is NOT used as an indicator in the Global Multidimensional Poverty Index developed by OPHI and UNDP?

  • A. Years of schooling of household members
  • B. Use of clean cooking fuel at home
  • C. Child mortality in the household
  • D. Household income below a set threshold

Q3. With reference to the World Bank's international poverty lines, consider the following statements: Which of the statements given above is/are correct?

  1. They are expressed in purchasing power parity (PPP) dollars so that a given line represents a comparable bundle of goods across countries, rather than being converted at market exchange rates.
  2. When a new round of PPPs is adopted, a country's measured poverty rate can change even though the real consumption of its households has not changed.
  3. The rise of the extreme poverty line from $2.15 to $3.00 a day was driven not only by updated price data but largely by revised national poverty lines in low-income countries.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The World Bank's switch from the $2.15 a day line (2017 PPP) to the $3.00 a day line (2021 PPP) increased the estimated global number of people in extreme poverty.
  2. The international extreme poverty line is set at the median of the national poverty lines of all World Bank member countries.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q5. The World Bank's October 2026 brief on India reports poverty both at the $3.00 a day line and at the $4.20 a day line. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. A sharp fall in poverty measured at $3.00 a day implies a fall of the same number of percentage points in poverty measured at $4.20 a day.
  2. For the same data and year, the poverty headcount at $4.20 a day cannot be lower than the headcount at $3.00 a day.
  3. The $4.20 line reflects poverty thresholds typical of lower-middle-income countries, which makes it more relevant than the extreme line for a country at India's income level.
  • A. 2 and 3 only
  • B. 1 and 3 only
  • C. 1 and 2 only
  • D. 1 only

Q6. Consider the following information about World Bank estimates of extreme poverty in India. I. The Spring 2025 brief, using the same survey data, put 2022-23 extreme poverty at 2.3% on the $2.15 a day line and at 5.3% on the $3.00 a day line. II. The October 2026 brief, which revises the earlier series, puts extreme poverty in 2023 at 2.6% on the $3.00 a day line. Which of the following inferences can validly be drawn from the above information?

  1. The gap between 2.3% and 5.3% reflects a change in the measuring line, not a change in households' living standards.
  2. Extreme poverty in India halved between 2022-23 and 2023.
  3. Extreme poverty in India rose between 2022-23 and 2023, from 2.3% to 2.6%.
  4. Figures from the two briefs cannot be placed in a single time series without accounting for the revision between them.
  • A. 3 and 4 only
  • B. 1 and 4 only
  • C. 2 and 3 only
  • D. 1 and 2 only

Q7. With reference to measures of poverty and of inequality, consider the following statements: Which of the statements given above is/are correct?

  1. If every household's income rises by the same proportion, the poverty headcount ratio can fall while the Gini coefficient remains unchanged.
  2. Consumption-based measures usually show lower inequality than income-based measures, partly because better-off households save a larger share of their income.
  3. A fall in a country's poverty headcount ratio necessarily implies a fall in its Gini coefficient.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 1 only

Q8. Consider the following assertion: A steep fall in a country's poverty headcount ratio does not by itself show that the gains from growth were evenly shared. Which of the following statements support/supports the above assertion?

  1. A headcount ratio records only whether each person is below the poverty line and does not reflect how incomes are spread among those above it.
  2. The share of people who are multidimensionally poor in the same country also fell steeply over a similar period.
  3. A headcount can fall when growth lifts people just over the line even while incomes at the top grow much faster than those at the bottom.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 1 and 3 only