Return to India Memories: Poor As God and Poor As Customer Providing Work - The Great Indian Escape From Poverty

For the five years before traveling to US, I was mainly working with a computer for my earning. I worked with people in an affluent space and people outside as well. I dealt with real humans on the ground and outside, when interacting and working with the under privileged on countless occasions. Be it during pandemic times working in public hospitals, distributing food, grocery items during lockdowns, distributing covid kits, taking surveys of the affected, teaching students in public schools, preparing them for scholarship tests, working with great NGOs and government etc; the heck of activity was around serving poor. I was really in wonder at the time how we are working on the ground for the under privileged and the immense activity undertaken in a mission mode. The beautiful times took me to US and nothing else. This is the job at hand for me on the ground and nothing else. The poor are my most important customers and the poverty has been transformed into divinity to elevate me and elevate themselves; however it might be. It feels like I had taken the help of richest nation to improve the lives of poor in India. The beautiful times of social work feels vindicated when you come to know that extreme poverty was nearly eliminated in the country, down to 2% from 16% 15 years ago. Millions were lifted out of the poverty. That is how India reformed and that is the base upon which I went to US when significant social change is happening in the society. The credit is also due to government at helm for lifting millions out of poverty and helping send a poor person on a long term basis to US. The wonder will not take shape and happen without good, stable governance working with very high standards for the poor. If I work with poor in India and my ascent to US symbolizes the ascent of poor out of poverty, India should be out of extreme poverty and it is the case on the ground. That is how it is done. For the rest of the post let us revisit the great Indian escape from poverty.

Few countries have reduced poverty on the scale India has over the past three decades—and none has done so while adding more than 400 million people to its population. For most of its post-independence history, India was a byword for scarcity. Food shortages, weak industrialisation and sluggish growth kept poverty entrenched despite decades of state-led planning. Today the picture is transformed: India is the world's most populous nation, one of its fastest-growing major economies and, by nominal GDP, the fourth largest. Yet its most consequential achievement is not economic size. It is the steady, and lately dramatic, retreat of extreme poverty.

The Long Shadow of Scarcity

The scale of the shift is best grasped historically. At Independence in 1947, India inherited an economy drained by colonial extraction and partition. Life expectancy was roughly 32 years, literacy below 20%, and agriculture employed the overwhelming majority. Though reliable surveys were scarce, economists broadly agree that 60–70% of Indians lived below what would now be considered the poverty line. For four decades, growth crawled along at 3–4% annually—the so-called "Hindu rate of growth". The Green Revolution and public investment banished famine and improved food security, but incomes rose too slowly to pull the masses out of deprivation.

The first decisive break came in 1991. Liberalisation dismantled the licence-permit raj, unleashed private enterprise and opened India to global markets. Between the early 1990s and late 2000s, India recorded one of the fastest sustained growth episodes among large developing economies, and poverty fell steadily. But with a population of over a billion, hundreds of millions remained poor. Growth alone, it became clear, would not finish the job.

The Last Fifteen Years: The Decisive Phase

What followed was the most remarkable chapter in India's anti-poverty story. According to the World Bank's latest assessment, using revised international poverty lines and updated household survey data, extreme poverty fell from 27.1% in 2011–12 to just 5.3% in 2022–23. In absolute terms, the number of Indians in extreme poverty dropped from roughly 344 million to about 75 million—nearly 270 million people escaping extreme deprivation in little over a decade. Rural extreme poverty, historically the hardest to dent, fell almost as fast as urban poverty, narrowing a gap that had persisted for generations. NITI Aayog's multidimensional poverty index tells a parallel story: by its estimates, around 248 million Indians exited multidimensional poverty in the nine years to 2022–23. Few countries in recorded history have achieved reductions of comparable magnitude in so short a span; only China's post-1980 transformation offers a parallel.

This success owed less to any single policy than to several forces converging at once.

First, growth remained robust, averaging 6–7% for much of the period and lifting household incomes across sectors—even through the shocks of demonetisation and the pandemic.

Second, India built physical connectivity at unprecedented speed. The rural roads programme linked tens of thousands of previously isolated villages to markets, schools and hospitals. Village electrification became effectively universal by 2018. Nearly four crore houses were built for the poor under the housing mission, converting shelter from aspiration into entitlement.

Third—and perhaps most distinctively—India built digital plumbing for its welfare state. The "JAM trinity" of Jan Dhan bank accounts (over 500 million opened), Aadhaar biometric identity (covering nearly the entire adult population) and mobile connectivity allowed the state to transfer benefits directly into beneficiaries' accounts. Direct Benefit Transfer now channels hundreds of welfare schemes, and the government estimates it has saved several lakh crore rupees by eliminating ghost beneficiaries and middlemen. The Unified Payments Interface, meanwhile, made digital transactions routine even for street vendors—a leap in financial inclusion that took other economies generations. 

Fourth, targeted welfare attacked specific dimensions of deprivation. The sanitation mission built over 100 million toilets and sharply reduced open defecation. Ujjwala provided free cooking-gas connections to more than 100 million poor households, cutting indoor air pollution that disproportionately killed women. The Jal Jeevan Mission raised rural tap-water coverage from about 17% of households in 2019 to over three-quarters. Ayushman Bharat extended hospitalisation insurance to roughly 500 million people. And after 2020, free food grains for around 800 million Indians cushioned the pandemic's blow—one reason extreme poverty continued falling through a global crisis that pushed millions elsewhere back into destitution.

The lesson embedded in this record is that income poverty and multidimensional poverty must be fought together. A household may earn little yet live far better when it gains a toilet, electricity, clean water, gas, a bank account and health cover. India's recent progress came precisely from this pincer movement: growth raising incomes from one side, public provision reducing deprivation from the other, with digital governance ensuring the two actually reached the intended households.

The Unfinished Journey

Celebration should not obscure what remains. Measured against the World Bank's higher threshold for lower-middle-income countries, some 230 million Indians are still poor. Many who escaped extreme deprivation hover just above the line, one illness, drought or job loss away from falling back. Escaping poverty is not the same as achieving security.

Employment is the greatest unresolved question. Growth has not generated enough high-productivity jobs; a large share of workers remain in informal work or low-yield agriculture, and female labour-force participation, though improving, lags comparable economies. Regional disparities persist: eastern and central states still hold a disproportionate share of the remaining poor. And access must now give way to quality—enrolment is high but learning outcomes are uneven, insurance has spread but doctors are scarce, wires reach every village but reliable power does not.

India's experience nonetheless offers a broader lesson: durable poverty reduction comes neither from growth alone nor welfare alone, but from growth, infrastructure, human capital and targeted protection reinforcing one another—stitched together, in India's case, by digital delivery.

The challenge of the coming decade is fundamentally different from 1947's. The goal is no longer to banish hunger but to build a middle-income society with productive jobs, better schools, stronger healthcare and genuine resilience. The hardest part of poverty reduction—lifting people from destitution—has largely been accomplished. The harder task is making prosperity broad, secure and permanent.