India's poverty sharply declines while 45% of Pakistan lives in poverty, World Bank report reveals

Pakistan's Lahore (Image credit: AFP)

India's extreme poverty rate has declined from 27.1% in 2011-12 to 5.3% in 2022-23, according to World Bank data. In contrast, nearly 45% of Pakistan's population lives in poverty, with 16.5% classified as living in extreme poverty, the report noted.

This is after a World Bank revision of the threshold poverty line last week. The World Bank’s latest projections indicate that Pakistan’s poverty rate remains at 42.4%, with an estimated 1.9 million additional people expected to fall into poverty in 2024-25, “virtually unchanged from last year.”

The country’s 2.6% economic growth is also deemed “insufficient to reduce poverty.” “With population growing at nearly 2 per cent annually, this translates to 1.9 million additional people falling into poverty this year," the report said.

Agriculture challenges 

World Bank's report also mentioned that the agriculture sector faces significant challenges in Pakistan as in 2025, weather conditions deteriorated with a 40 per cent reduction in rainfall, alongside pest attacks and shifting production choices.

“Crop yields are projected to decline, ranging from 29.6 per cent for cotton to 1.2 per cent for rice, limiting sectoral growth to under 2 per cent," the report says.

Amid India putting Indus Waters Treaty in abeyance, water flow to Pakistan’s Punjab has also been severely affected, which could also put agriculture yield in Pakistan under severe stress.

CNN-News 18 reports has cited that Pakistan's official data shows a 15 per cent drop in water flow in the Indus Water Basin in Punjab with the Dams Level at many Pakistani dams nearing the dead level.

The report said the consumption-based inequality in Pakistan has climbed nearly 2 points since FY21, holding steady just below 32 over the past year. “However, actual inequality is likely higher since surveys typically underrepresent wealthy households. Additionally, external factors such as evolving global trade dynamics, could influence the pace of economic recovery and subsequent progress on poverty reduction."

"Food security concerns loom large, with an estimated 10 million people at risk of acute food insecurity in rural areas," the report says.

India’s extreme poverty rate declined sharply to 5.3 per cent over a decade from 27.1 per cent in 2011-12, even as the World Bank has revised upwards its threshold poverty line to $3 per day. India has lifted 171 million people from extreme poverty in the decade between 2011-12 and 2022-23, as per the World Bank.

Amid heightened tensions following the Pahalgam terror attack, New Delhi has raised concerns before the IMF and World Bank, accusing Pakistan of misusing international aid to fund terrorism against India.

Recently, The International Monetary Fund (IMF) has approved the immediate disbursement of $1 billion to Pakistan under the ongoing Extended Fund Facility (EFF)

The World Bank data could be further used by India to raise strong doubts on how Pakistan has been using global aid from agencies like the International Monetary Fund (IMF) for the purported benefit of its common people.