The World Bank has officially revised the global benchmark for extreme poverty, increasing it from USD 2.15 to USD 3 per day for low-income countries.
For lower-middle-income nations, the threshold has risen from USD 3.65 to USD 4.20 per day, while for upper-middle-income countries, it now stands at USD 8.40 per day, up from USD 6.85.
“However, this remains an extremely low bar and reflects the cost of meeting basic needs in the poorest countries of the world,” the World Bank stated in its report.
The World Bank first revised the international poverty line in 2001. Since then, changes were made in 2008, 2015, 2022, and now again in 2024. Despite these revisions in the dollar value, the method to determine the percentage of people living in extreme poverty has not changed since its inception in 1990.
“It shows the share of people living in absolute poverty according to the standards of the world's poorest countries,” the report explained.
According to the report, 1.5 billion individuals have been lifted out of poverty globally since 1990. However, the pace of poverty reduction has notably slowed in the last decade due to a range of global challenges.
“Global poverty reduction has slowed substantially in the last decade due to several interconnected crises, including slow economic growth, high indebtedness, conflict and fragility, and severe weather-related shocks,” the World Bank noted.
Currently, around 808 million people still live in extreme poverty. At the current pace, it may take decades to completely eradicate it.
India has made remarkable strides in combating poverty. Between 2011-12 and 2022-23, the country lifted 171 million people out of extreme poverty, as per World Bank data.
“India also transitioned into the lower-middle-income category,” the report highlighted.
India’s five most populous states — Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh — played a pivotal role in this achievement.
“These states accounted for 65 per cent of the country's extreme poor in 2011-12 and contributed to two-thirds of the overall decline in extreme poverty by 2022-23,” the report added.
The World Bank is one of the most influential international financial institutions in the world, playing a crucial role in global economic development and poverty reduction. Its history is deeply intertwined with the major geopolitical and economic shifts of the 20th and 21st centuries.
The origins of the World Bank lie in the United Nations Monetary and Financial Conference, held in Bretton Woods, New Hampshire, USA, in July 1944. As World War II neared its end, delegates from 44 Allied nations gathered to establish a new international economic order to prevent a recurrence of the economic instability and protectionism that had contributed to the Great Depression and the war itself.
The intellectual architects of this new order were primarily John Maynard Keynes (United Kingdom) and Harry Dexter White (United States). The conference led to the creation of two key institutions:
The International Monetary Fund (IMF): Designed to oversee the global monetary system, ensure exchange rate stability, and provide short-term financial assistance to countries facing balance-of-payments difficulties.
The International Bank for Reconstruction and Development (IBRD): This was the original name of what would become the World Bank. Its initial mandate was twofold:
Reconstruction: To provide financial assistance for the rebuilding of war-devastated economies in Europe.
Development: To facilitate investment for the economic development of less developed countries.
While the IMF garnered most of the immediate attention at the conference, the IBRD's articles of agreement, significantly influenced by Keynes, laid the groundwork for its future role. The Articles of Agreement for the IBRD were ratified on December 27, 1945, and the bank officially commenced operations on June 25, 1946. Its first loan, for $250 million, was granted to France in 1947 for post-war reconstruction.
The World Bank’s revision of global poverty thresholds marks a significant shift in how the world perceives and measures extreme poverty. While the newly raised benchmarks—USD 3, USD 4.20, and USD 8.40—better reflect current global economic realities, they also highlight the persistent gaps in basic needs access for millions.
With 808 million people still in extreme poverty, the world faces an uphill task in reaching global development goals. For India, the journey has been both challenging and inspiring. The removal of 171 million people from extreme poverty and the transition to a lower-middle-income nation underscore the impact of targeted policies, growth-driven reforms, and state-level contributions.
However, experts warn that structural challenges such as climate vulnerability, conflict, and sluggish growth must be addressed urgently. As poverty thresholds rise, so must the global commitment to equitable economic progress and inclusive development.