The World Bank used updated survey methods and new price data to raise the global poverty line from $2.15/day (PPP 2017) to $3/day (PPP 2021)

What Constitutes the Global Poverty Line?

A poverty threshold specifies the least amount of daily expenditure required for essential needs such as food, clothing, and housing.

The international poverty threshold is modified via Purchasing Power Parity (PPP) to facilitate comparisons among nations irrespective of currency worth.

What Factors Determine the Poverty Rate?

Poverty is assessed as the proportion of individuals surviving on less than a specific daily spending threshold (e.g., $2.15/day).

The World Bank utilizes household consumption figures, modified for PPP and inflation, to determine national and worldwide poverty rates.

The revised estimate incorporates more detailed consumption data and revised living costs, particularly in nations such as India.

The extreme poverty threshold is currently defined by the median poverty line of low-income nations.

Consequences For India:

Significant Decline in Extreme Poverty: With the previous $2.15 threshold, 2.4% of Indians lived in poverty in 2022. The new $3 line raises this to 5.3%, but it's still a significant decrease from 16.2% in 2011–12.

Data Shift: The shift is prompted by the initial official CES survey in over a decade (2022–23), revealing increased consumption trends that suggest better living standards.

Moderate poverty continues to be notable, as 23.9% of Indians lived below the $4.20/day threshold (designated for lower-middle-income nations) in 2022.

Global Comparison Better Represents Indian Advancement: India's advancement is more apparent with updated PPP-adjusted standards and improved domestic data incorporation into international metrics.

Exercise caution when comparing: It is not recommended to directly compare with older surveys (such as the 2011–12 CES) because of variations in methodologies and inflation adjustments.