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India's Poverty Gains Mask Weakness in Labour Earnings
India has made major progress in reducing extreme poverty.
Many fewer people now live below the World Bank’s lowest poverty line.
However, people’s pay from work has not increased as quickly as the economy.
The typical worker’s earnings grew more slowly than output per worker.
Rural workers generally earn much less than urban workers.
The share of rural workers earning below $4.20 a day also increased.
Families may still improve their living standards through government support, savings, borrowing, or shared household income.
But these supports are different from earning more through work.
The next challenge is making ordinary jobs provide stronger and more dependable economic security.
India’s extreme-poverty rate fell from 27.1% in 2011-12 to 2.6% in 2023-24 as real GDP grew about 6% annually.
From 2018 to 2025, output per worker rose 2.3% annually, while median real labour earnings increased only 1.47% annually.
Median daily earnings rose to $16.76 in 2025, but urban workers earned about 56% more than rural workers.
The share of rural workers earning below $4.20 a day increased from 6.58% in 2017-18 to 8.62% in 2025.
Although poverty reduction has been substantial, 16.1% of Indians—about 232 million people—remained below the $4.20 daily poverty line in 2023-24.
- Who
- Indian workers and households, especially rural workers, as assessed using the Periodic Labour Force Survey.
- What
- India reduced extreme poverty substantially, but labour earnings grew slowly and low-paid rural work deteriorated against international income benchmarks.
- Where
- India, with separate comparisons between rural and urban areas.
- When
- The comparison covers mainly 2011-12 to 2025, with poverty data also reported for 2023-24.
- Why
- To examine whether economic growth and poverty reduction are translating into steadily stronger earnings and economic security from work.
Key facts
- Extreme-poverty rate
- Fell from 27.1% in 2011-12 to 2.6% in 2023-24, using the World Bank’s $3-per-day line in 2021 PPP terms.
- Real GDP growth
- About 6% annually between 2011-12 and 2023-24; roughly 5.21% annually between 2018 and 2025.
- Output per worker
- Increased by about 2.3% annually from 2018 to 2025.
- Median labour earnings
- Rose 1.47% annually in real terms; median daily earnings reached $16.76 in 2025, up from $15.13 in 2017-18.
- Rural-urban earnings
- In 2025, median daily earnings were $14.45 in rural India and $22.49 in urban India.
- Workers below $4.20 daily
- The national share rose from 5.62% in 2017-18 to 6.83% in 2025; the rural share rose from 6.58% to 8.62%.
- Remaining poverty
- In 2023-24, 16.1% of the population—around 232 million people—lived below the $4.20-a-day line; rural poverty was 19.34% versus 8.6% in urban India.
Sources
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