India’s Poverty Fell To 5.3% in 2022-23, But Pakistan’s Poverty Remains At 42.4%, Says World Bank Data

India has achieved a significant milestone by lifting a record number of people out of poverty, according to the World Bank. In contrast, Pakistan faces a grim scenario with nearly 45% of its population living in poverty. The World Bank's recent assessment highlights that 16.5% of Pakistanis live in extreme poverty, underscoring the country's economic challenges.

The World Bank's April report on Pakistan revealed that the country's economic growth rate of 2.6% is inadequate for reducing poverty levels. This growth rate is projected to leave the poverty rate virtually unchanged at 42.4% in FY25, based on a $3.65 per day threshold (2017 PPP). The report also noted that with a population growth rate of nearly 2% annually, an additional 1.9 million people are expected to fall into poverty this year.

India's Progress Against Poverty

India has made remarkable progress in reducing extreme poverty, with rates dropping from 27.1% in 2011-12 to just 5.3% in 2022-23. Over this decade, India successfully lifted 171 million people out of extreme poverty, even as the World Bank revised its threshold poverty line to $3 per day.

The World Bank's findings could bolster India's argument before international bodies like the IMF and World Bank regarding Pakistan's alleged misuse of global aid for activities against India. The data may be used by India to question how effectively Pakistan utilises international financial assistance for its citizens' welfare.

Agricultural Challenges in Pakistan

Pakistan's agriculture sector is facing severe challenges due to deteriorating weather conditions and reduced rainfall by 40% in 2025. These factors, coupled with pest attacks and changing production choices, are expected to cause crop yields to decline significantly-29.6% for cotton and 1.2% for rice-limiting sectoral growth to under 2%.

The Indus Waters Treaty suspension by India has further exacerbated water scarcity issues in Pakistan's Punjab region, impacting agricultural productivity. Official data indicates a 15% drop in water flow within the Indus Water Basin, with dam levels nearing critical points.

Rising Inequality and Food Security Concerns

The report highlights increasing consumption-based inequality in Pakistan, which has risen nearly two points since FY21 and remains just below 32 over the past year. However, actual inequality might be higher due to underrepresentation of wealthy households in surveys.

Food security remains a pressing concern as approximately half of the working poor are employed in agriculture. Rural poverty is expected to rise slightly by 0.2 percentage points, while real incomes for agricultural workers may fall by 0.7%. An estimated 10 million people face acute food insecurity risks in rural areas.

External factors such as global trade dynamics could further influence economic recovery and progress on poverty reduction efforts in Pakistan.