With Extreme Poverty Recording a Decline, Is Lower-Middle Class the New Poor?

64.3 percent, or every two in three citizens of India, is receiving at least one form of social security benefit, data released by the government has shown. Prime Minister Narendra Modi, during his ‘Mann Ki Baat’ address last Sunday said that this is not just a number but “a reflection of the significant transformation in how India supports its citizens.” In other words, nearly 95 crore Indians are covered by at least one social security scheme as against 28 crore people or 19 percent of the population in 2015. The findings were released in a report called Sustainable Development Goals: National Indicator Framework Progress Report 2025 released by the Union Ministry of Statistics and Programme Implementation (MoSPI) on Sunday, 29 June. The proportion of population covered under social security has been used as an indicator of poverty alleviation—the first Sustainable Development Goal (SDG). The report mentioned that the proportion of Indians living in poverty has also declined from 24.85 percent in 2015-16 to 14.96 percent in 2019-21. But has it? How is poverty defined or measured in India? Does India have a poverty line? Who is truly poor in contemporary India? Let’s take a look:An individual is said to be living in poverty when he/she lacks the income or resources for basic human needs such as food, clothing, shelter, education and healthcare. Poverty is a multifaceted issue and often manifests as hunger, malnutrition, limited educational opportunities, social discrimination, and exclusion from decision-making processes. The report labels eradicating poverty in all forms as “one of humanity’s most-daunting challenges.” The government has launched various welfare schemes—focused on nutrition, health, education, housing, drinking water, sanitation, skill development, and social protection—as a comprehensive strategy to eliminate poverty. Has it worked? The current report has identified 13 indicators, down from 21 indicators in 2019, to measure the country’s progress in alleviating poverty. Let’s look at some of these indicators. Eradication of extreme poverty, measured as people living on less than $1.25 or Rs 107 per day. While the report states a national indicator is still under development, the government in April had said that it had lifted 171 million people out of extreme poverty (less than $2.15 a day) in the last ten years. It cited a World Bank report saying extreme poverty fell sharply from 16.2 percent in 2011-12 to just 2.3 percent in 2022-23. In fact, just last month the World Bank revised the international poverty line from $2.15 per day to $3 per day, which added 125 million extreme poor globally. But the government claimed that India was an outlier, courtesy updated survey methods. “The new poverty line would have increased the count of global extreme poverty by 226 million people. But thanks to India’s data revision, the net global increase was only 125 million,” the press release stated. It is important to note here that there is no universally accepted poverty line in India and that the levels of poverty are estimated based on household consumer expenditure surveys. In 2011-12, the poverty line was Rs 816 per capita per month in rural areas and Rs 1,000 per capita per month in urban areas. It was calculated based on the recommendations of the Tendulkar Committee and was computed using the Monthly Per Capita Consumption Expenditure (MPCE). “Since then, our lifestyles have changed in many ways. The cost of living has increased. But these changes have not reflected in the consumption basket of the poor. Sure, the poverty line is adjusted for inflation, but it is meaningless as it ignores the complexities of poverty on ground,” said Aunindyo Chakravarty, a political economist and columnist. According to the report, the number of people living in poverty has come down from 24.85 percent in 2015-16 to 14.96 percent in 2019-21. This means that India still houses nearly 216 million poor. “The bottom 30 percent of India have done better under the Modi regime, and this can be validated through the voting patterns of the poor—BJP’s vote share among the extremely poor has increased over the years,” Chakravarty explained. Case in point, the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which was launched in 2020, and extended many times before being subsumed into the National Food Security Act in 2023. Then it was extended for another five years, offering free food grains to the poor until 2028. “Poverty is not a Modi government issue. Inequality was dramatically high during the UPA government as well. In 2012, the Rangarajan Committee had not agreed to distribute free food grains. But PM Modi understood its political significance and extended the PMGKAY scheme. Over 80 crore poor were beneficiaries of this scheme as of August last year,” Chakravarty explained.He added that due to the numerous doles given to the poor, inequality has also reduced in the Modi years. “The real income of the poor has improved more than that of the middle class; consequently, consumption has stagnated among the lower-middle and middle classes,” Chakravarty told The Quint. The lower-middle class — say, a taxi driver living in Delhi and earning Rs 25,000 per month to feed his family, take care of his elderly parents, send his children to school, pay electricity bills, etc.— is now in more grave trouble. In the 1970’s, the poverty line was computed based on minimum calorie intake — 2,400 kcal/day for rural population and 2,100 kcal/day for urban population. But in 2009, the Tendulkar committee delinked poverty line from calorie intake and relied on consumption expenditure-based surveys, which included non-food related expenses like clothing, health and education. Although the report hasn’t used hunger as an indicator, another report released by MoSPI on 2 July shows that though the minimum calorie intake of the poorest 5-10 percent of India’s population has improved slightly over the last few years, it is considerably lower than the national average and the gap between the bottom-5% population and the top 90-100% population is still substantially wide. Besides, India was ranked 105 out of 127 countries in the 2024 Global Hunger Index and placed in the ‘serious’ category with a score of 27.3. It stated that 13.7 percent of India’s population is under-nourished while 35.5 percent of children under five years are stunted—a claim which was categorically rejected as “flawed” by the Modi-led government in November last year.64.3 percent of the population is now covered by social protection in the form of welfare schemes for the elderly, women, children, pregnant women, persons with disabilities, etc. However, the proportion of government spending on essential services—education, health and social protection—has been almost stagnant in the last ten years, except for a few fluctuations during the covid period.“It is important to understand here that the poor rely on subsistence existence, i.e. if I have enough to be able to live till tomorrow. Social security schemes facilitate this by providing basic food and little disposable cash,” Chakravarty explained. For instance, PM KISAN puts an additional Rs 500 per month in the accounts of approximately 9 crore farmers each month, even though it was originally meant to cover input costs. He added that social security schemes have also allowed the poor more access to government agencies. For instance, an individual may or may not have a gas cylinder, but they do have a card, with which they can approach the state office. According to the report, 84.75 percent of the population owns a wired telephone or a mobile phone, slightly lower than the previous financial years. On being asked if it is a true indicator of poverty, Chakravarty said, “Owning a mobile phone is not a sign of affluence but an indicator of distress. Nowadays, mobile phone functions as an office for numerous informal workers; migrants depend on it for connecting with families back home...It is a complicated issue.” People engaged in non-professional personal services such as domestic helps, electricians, plumbers, etc. need phones for their work. Chakravarty pointed out that these services had dropped in 2020, revived in 2022, and then stagnated in 2025.As of 2024, 99.06 percent of India’s population is covered by at least a 4G mobile network, the report stated. A combination of indicators which gauge access to basic essential services have also been used as a measure of poverty alleviation in the report. As far as access to health is concerned, India has shown improvement in vaccine coverage for DPT (Diphtheria, Pertussis, and Tetanus) as well as treatment of Tuberculosis. However, health professionals (physicians, psychiatrists, and surgeons) per capita is still remarkably low. As per the report, there is less than one doctor for a thousand people, one psychiatrist for one lakh people, while there are 14 surgeons per lakh people in India as of 2021-22. On access to equitable and quality education, there’s a significant drop in the percentage of students achieving a minimum level of proficiency in Language and Mathematics. Although access to Piped Water Supply has shown an improvement over the years, 20 percent of the rural population and 25 percent of the urban population still have no access to safe and adequate drinking water.

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With Extreme Poverty Recording a Decline, Is Lower-Middle Class the New Poor?

How is poverty defined or measured in India? Is there a poverty line? Who is truly poor in contemporary India?

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