Over the past 15 years, World Bank data has revealed a dramatic divergence in the trajectories of India and Pakistan regarding poverty reduction and economic priorities. The comparison, especially since 2010, highlights not only a difference in outcomes but also in the underlying policy choices and governance models of the two South Asian neighbours.
India’s Remarkable Progress In Poverty Alleviation
India has achieved a historic reduction in poverty, with the extreme poverty rate dropping from 27.1% in 2011-12 to just 5.3% in 2022-23, even after the World Bank revised the global extreme poverty line upward from $2.15 to $3 per person, per day. This means approximately 269 million Indians—more than the entire population of Pakistan—were lifted out of extreme poverty in just over a decade. The number of people living in extreme poverty in India fell from 344.47 million in 2011-12 to 75.24 million in 2022-23.
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This success is attributed to a combination of sustained economic growth, targeted welfare programs, and a policy focus on rural development and social inclusion. The urban-rural poverty gap has narrowed, and real incomes have improved across demographics, reflecting the effectiveness of India’s development-centric governance model. India’s economic rise has been further underscored by its recent overtaking of Japan to become the world’s fourth-largest economy.
Pakistan’s Worsening Poverty Crisis
In stark contrast, Pakistan has experienced a sharp increase in poverty. The proportion of Pakistanis living in extreme poverty rose from 4.9% in 2017 to 16.5% in 2021. At the broader poverty threshold of $4.2 per person, per day, the poverty headcount increased from 39.8% to over 44.7% during the same period. The World Bank projects that nearly 45% of Pakistan’s population now lives in poverty, with an additional 1.9 million people expected to fall into poverty in 2024-25 due to stagnant economic growth of just 2.6%—a rate below the population growth.
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Several factors have contributed to Pakistan’s deepening crisis:
Economic Mismanagement: Chronic dependence on international loans, with 25 IMF bailout packages totalling $44.57 billion, and billions more from the World Bank, Asian Development Bank, and China, has not translated into broad-based development.
Governance And Priorities: Analysts and diplomats point to the misappropriation of funds, lack of accountability, and a disproportionate focus on defence and security at the expense of social and economic development. Much of the aid and loan money is reportedly diverted to military spending and supporting cross-border terror infrastructure, rather than addressing poverty and development needs.
Agricultural And Climate Challenges: Pakistan’s agriculture sector, which employs nearly half the country’s poor, is under severe stress from reduced rainfall, pest infestations, and declining crop yields, further exacerbating rural poverty.
Political Instability: Ongoing political turmoil and weak institutional frameworks have hindered effective poverty alleviation and economic reforms.
Contrasting Models: Policy, Leadership, And Will
The World Bank data underscores a fundamental lesson: poverty is shaped not by destiny, but by policy choices, leadership, and governance priorities. India’s model of inclusive development, economic reforms, and targeted welfare has yielded tangible results, setting a benchmark for the Global South. In contrast, Pakistan’s focus on defence and lack of investment in human development have led to worsening poverty and increased vulnerability for its population.
Diplomats and economists cited in the reports argue that unless Pakistan addresses the structural dominance of the military in politics and the economy, and redirects resources toward genuine development, the cycle of poverty and dependency will persist. There are growing calls for international donors to impose stricter conditions to ensure that aid is used for the benefit of Pakistan’s people, rather than perpetuating military and security expenditures.
Conclusion
The latest World Bank data paints a tale of two neighbour’s: India, surging ahead with record poverty reduction and economic growth; and Pakistan, slipping deeper into crisis due to misplaced priorities and governance failures. The message is clear—effective policy, leadership, and a focus on human development are decisive in shaping a nation’s destiny. The contrasting experiences of India and Pakistan offer a powerful example for the Global South on the critical importance of governance choices in the fight against poverty.
Agencies
