**Policy Summary: Poverty Assessment Based on World Bank's Lower Middle Income Country (LMIC) Classification**
This document summarizes the Indian government's response to a parliamentary question regarding the World Bank's classification of India as a Lower Middle Income Country (LMIC) and its impact on poverty calculations.
The World Bank has set the LMIC poverty line at $4.20 per day, based on 2021 Purchasing Power Parities (PPP). Using this benchmark, India's poverty rates are assessed as follows:
**Poverty Rates (Percentage of Population Below Poverty Line):**
| Year | Extreme Poverty ($2.15/day, 2017 PPP) | LMIC Poverty ($3.65/day, 2017 PPP) | Extreme Poverty ($3.00/day, 2021 PPP) | LMIC Poverty ($4.20/day, 2021 PPP) |
| :----- | :-------------------------------------: | :-------------------------------------: | :-------------------------------------: | :-------------------------------------: |
| 2022-23 | 2.3 | 28.1 | 5.3 | 23.9 |
| 2011-12 | 16.2 | 61.8 | 27.1 | 57.7 |
**Poverty Rates by Location (Percentage of Population Below Poverty Line):**
| Year | Location | Extreme Poverty ($2.15/day, 2017 PPP) | LMIC Poverty ($3.65/day, 2017 PPP) |
| :----- | :------- | :-------------------------------------: | :-------------------------------------: |
| 2022-23 | Rural | 2.8 | 32.5 |
| | Urban | 1.1 | 17.2 |
| | Total | 2.3 | 28.1 |
| 2011-12 | Rural | 18.4 | 43.5 |
| | Urban | 10.7 | 61.8 |
| | Total | 16.2 | 69 |
**Poverty Reduction:**
* Between 2011-12 and 2022-23, 378 million people were lifted out of poverty using the $3.65/day (2017 PPP) LMIC poverty line.
* Between 2011-12 and 2022-23, 171 million people were lifted out of poverty using the $2.15/day (2017 PPP) Extreme Poverty line.
**Source:**
Minister of State in the Ministry of Planning, Government of India.
**Supporting Documents (World Bank Reports):**
[https://documents1.worldbank.org/curated/en/099722104222534584/IDU25f34333d3a344ae826886830e3bc5a5.pdf](https://documents1.worldbank.org/curated/en/099722104222534584/IDU25f34333d3a344ae826886830e3bc5a5.pdf)
[https://documents1.worldbank.org/curated/en/099510306052516849/IDUeb272b02ecd146339e379297e20a711c.pdf](https://documents1.worldbank.org/curated/en/099510306052516849/IDUeb272b02ecd146339e379297e20a711c.pdf)
Key Entities Referenced
World Bank: An international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects.
Lower Middle Income Country: A classification used by the World Bank to categorize countries based on their gross national income (GNI) per capita.
LMIC: Acronym for Lower Middle Income Country
Ministry of Planning: A ministry in the Government of India.
Ministry of Statistics and Programme Implementation: A ministry in the Government of India responsible for statistical data and program implementation.
Rao Inderjit Singh: Minister of State (Independent Charge) of the Ministry of Statistics and Programme Implementation; Minister of State (Independent Charge) of the Ministry of Planning and Minister of State in the Ministry of Culture.
Purchasing Power Parities: PPPs; rates of currency conversion that equalize the purchasing power of different currencies by eliminating the differences in price levels between countries
201112: Fiscal year 2011-2012, used as a reference year for poverty rate data in India.
GOVERNMENT OF INDIA
MINISTRY OF PLANNING
LOK SABHA
UNSTARRED QUESTION NO. 1641
TO BE ANSWERED ON 30.07.2025
INDIA AS LOWER MIDDLE INCOME COUNTRY
1641. SHRI SUBBARAYAN K:
COM. SELVARAJ V:
Will the Minister of PLANNING be pleased to state:
(a) whether it is a fact that the World Bank has categorised India as a Lower Middle Income
Country (LMIC) for the purpose of calculating the poverty and the poverty line is Rs.
4.20 per day per person; and
(b) if so, the according to such categorization, the details of poverty rate and the number as in
2011-12 and 2022-23 in rural and urban in India, State-wise?
ANSWER
MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS
AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE (INDEPENDENT
CHARGE) OF THE MINISTRY OF PLANNING AND MINISTER OF STATE IN THE
MINISTRY OF CULTURE
(RAO INDERJIT SINGH)
(a) The World Bank has recently revised the international poverty lines and set the threshold
for lower-middle-income countries (LMICs) at $4.20 per day, based on 2021 Purchasing
Power Parities (PPPs). India is currently classified as an LMIC.
(b) According to the report, India's poverty rates are as given below:
% of population below poverty line
2017 PPP 2021 PPP
Extreme Extreme
LMIC poverty LMIC poverty
Poverty poverty
$2.15 per day $3.65 per day $3.00 per day $4.20 per day
(2017 PPP) (2017 PPP) (2021 PPP) (2021 PPP)
2022-23 2.3% 28.1% 5.3% 23.9%
2011-12 16.2% 61.8% 27.1% 57.7%
Page 1 of 2% of population below poverty line
2017 PPP
Extreme Poverty $2.15 per day LMIC poverty $3.65 per day
Year Rural Urban Total No. of Rural Urban Total No. of
people people
lifted out lifted out of
of poverty poverty
2022-23 2.8 1.1 2.3 171 32.5 17.2 28.1
378 million
2011-12 million
18.4 10.7 16.2 69 43.5 61.8
The detailed documents are in public domain and can be accessed at
https://documents1.worldbank.org/curated/en/099722104222534584/pdf/IDU-25f34333-d3a3-
44ae-8268-86830e3bc5a5.pdf
https://documents1.worldbank.org/curated/en/099510306052516849/pdf/IDU-eb272b02-ecd1-
4633-9e37-9297e20a711c.pdf
*****
Page 2 of 2