For years, India’s poverty debate has been stuck in familiar grooves: contests over the methodology for updation of poverty lines and extrapolations from outdated surveys. After 2011-12, the country had no official consumption survey to anchor our public debate. The release of the Household Consumption Expenditure Survey (HCES) 2023-24 finally broke that stalemate.

When 2011-12 monthly per capita consumption expenditure (MPCE) thresholds are brought to 2023-24 prices, the real consumption level that once defined India’s bottom 10% now applies to less than 0.5% of the population. This is important, for it tells us that the base level of our consumption pyramid has significantly risen.

The bottom tail has vanished: Let’s begin with a simple question: How many people today consume at the same real level as the poorest 10% did in 2011–12? Using the consumer price index (CPI) to take older thresholds to 2023-24 prices, the 2011-12 rural bottom 10% MPCE of ₹710 becomes about ₹1,331 today; the urban threshold of ₹983 becomes about ₹1,804.

Now, we place these thresholds on the new HCES distribution. In rural India, under 0.5% of people consume below ₹1,331 today. In urban India, 0.4% of India’s population consumes below ₹1,804 today. These findings are robust under multiple price adjustments (item-wise CPI, bottom-decile CPI weights and also a Fisher index).

An entire decile has shrunk to a statistical sliver. This is an unambiguous upward shift.

From the bottom to the middle: The real story, though, is about upward mobility. A broader data analysis reinforces it: households that were in the bottom 10% in 2011-12 are now concentrated between the 10th and 40th percentiles in the 2023-24.

In rural areas, most are found between the 20th and 40th percentiles, whereas in urban areas, mobility appears slightly more compressed, with the majority occupying the 20th to 30th percentile range (see graph).

But a cautionary note is essential. The results are derived from HCES surveys of the National Sample Survey that are carried out independently in each survey year, and are not panel surveys.

Thus, statements about ‘mobility’ are best interpreted as shifts in the distribution, though the broad direction and magnitude of the changes observed are substantial.

Over 110 million people have moved above the old bottom decile: The analysis also quantifies the change in absolute numbers. In 2011-12, India’s total population was 1,211 million, implying that roughly 121 million Indians formed the bottom 10%. By 2023-24, based on population projections, only around 6.5 million individuals fall below the inflation-adjusted equivalent of that same threshold.

Even accounting for population growth, this implies that nearly 114.5 million people or about 8% of India’s current estimated population have moved above the real consumption level that once defined the bottom decile.

Real consumption growth is strongest at the bottom: Importantly, the shift is not confined to the lower tail of the distribution. After adjusting for inflation, average rural MPCE for the bottom10% grew by about 70% between 2011-12 and 2023-24; the corresponding increase in urban India is 85%.

Growth remains strong across much of the distribution (typically 40-70%), and even though gains taper at the top, the pattern points to a broad-based rise in real living standards.

What explains this dramatic shift?: The answer lies in the convergence of policy intent and economic momentum. Over the past decade, India’s welfare architecture has deepened and broadened. Programmes such as the rural job guarantee, public distribution system reforms, direct benefit transfers and the PM Garib Kalyan Yojana have created a sturdy safety net that protects households from slipping below subsistence levels.

Also, sustained economic growth, rising rural wages and improvements in connectivity, electrification and digital access have expanded both earning capacity and spending power. These gains are mutually reinforcing; a more secure household is also a more confident consumer.

What we are witnessing, therefore, is the emergence of a new consumption middle class: not the affluent middle that dominates urban markets, but a broader and sturdier base of households with modest but stable purchasing power.

They are buying more nutritious food, investing in education, using mobile data and accessing better healthcare than they did ten years ago. Their rising consumption is reshaping markets, driving demand for everyday goods and services and thus powering India’s domestic growth engine.

A shift in India’s development challenge: The transformation we have seen poses new policy challenges. As extreme deprivation recedes, India’s focus must shift from poverty reduction to consumption resilience. Instead of how many are below the poverty line, we must focus on how economically secure life is just above it.

Consumption growth must translate into improvements in nutrition, health, education and asset formation. Without such qualitative strengthening, today’s new middle could remain vulnerable to economic or climate shocks.

At the same time, India must keep an eye on distribution. The challenge is to sustain a balance: i.e., ensuring that the gains of growth remain broad-based and that future prosperity does not become top-heavy. Monitoring consumption across the distribution, rather than focusing only on income or access, will be key to maintaining this balance.

Upward mobility among the bottom deciles is an economic turning point. A wider base of real consumption strengthens domestic demand, creating a more stable foundation for India’s growth. It means a larger market for goods and services, deeper rural and semi-urban purchasing power and a more balanced growth model, less dependent on external demand.

Firms and investors should register this structural broadening of consumption as it alters product market strategies, credit markets and local supply-chain planning.

For too long, India’s discussions about poverty, inequality and mobility were conducted without the data needed to resolve disagreements. The new HCES gives the country something it has lacked for a decade: clarity. And the picture that emerges is encouraging, but also instructive.

India must consolidate and build on this progress, as it offers a stable foundation for the next phase of economic development.

The authors are, respectively, former director general, ministry of statistics, president, Centre of Data for Economic Decision-making (CoDED) and chief statistician, Pahle India Foundation (PIF); and head of CoDED and fellow, PIF.

For years, India’s poverty debate has been stuck in familiar grooves: contests over the methodology for updation of poverty lines and extrapolations from outdated surveys. After 2011-12, the country had no official consumption survey to anchor our public debate. The release of the Household Consumption Expenditure Survey (HCES) 2023-24 finally broke that stalemate.

When 2011-12 monthly per capita consumption expenditure (MPCE) thresholds are brought to 2023-24 prices, the real consumption level that once defined India’s bottom 10% now applies to less than 0.5% of the population. This is important, for it tells us that the base level of our consumption pyramid has significantly risen.

The bottom tail has vanished: Let’s begin with a simple question: How many people today consume at the same real level as the poorest 10% did in 2011–12? Using the consumer price index (CPI) to take older thresholds to 2023-24 prices, the 2011-12 rural bottom 10% MPCE of ₹710 becomes about ₹1,331 today; the urban threshold of ₹983 becomes about ₹1,804.

Now, we place these thresholds on the new HCES distribution. In rural India, under 0.5% of people consume below ₹1,331 today. In urban India, 0.4% of India’s population consumes below ₹1,804 today. These findings are robust under multiple price adjustments (item-wise CPI, bottom-decile CPI weights and also a Fisher index).

An entire decile has shrunk to a statistical sliver. This is an unambiguous upward shift.

From the bottom to the middle: The real story, though, is about upward mobility. A broader data analysis reinforces it: households that were in the bottom 10% in 2011-12 are now concentrated between the 10th and 40th percentiles in the 2023-24.

In rural areas, most are found between the 20th and 40th percentiles, whereas in urban areas, mobility appears slightly more compressed, with the majority occupying the 20th to 30th percentile range (see graph).

But a cautionary note is essential. The results are derived from HCES surveys of the National Sample Survey that are carried out independently in each survey year, and are not panel surveys.

Thus, statements about ‘mobility’ are best interpreted as shifts in the distribution, though the broad direction and magnitude of the changes observed are substantial.

Over 110 million people have moved above the old bottom decile: The analysis also quantifies the change in absolute numbers. In 2011-12, India’s total population was 1,211 million, implying that roughly 121 million Indians formed the bottom 10%. By 2023-24, based on population projections, only around 6.5 million individuals fall below the inflation-adjusted equivalent of that same threshold.

Even accounting for population growth, this implies that nearly 114.5 million people or about 8% of India’s current estimated population have moved above the real consumption level that once defined the bottom decile.

Real consumption growth is strongest at the bottom: Importantly, the shift is not confined to the lower tail of the distribution. After adjusting for inflation, average rural MPCE for the bottom10% grew by about 70% between 2011-12 and 2023-24; the corresponding increase in urban India is 85%.

Growth remains strong across much of the distribution (typically 40-70%), and even though gains taper at the top, the pattern points to a broad-based rise in real living standards.

What explains this dramatic shift?: The answer lies in the convergence of policy intent and economic momentum. Over the past decade, India’s welfare architecture has deepened and broadened. Programmes such as the rural job guarantee, public distribution system reforms, direct benefit transfers and the PM Garib Kalyan Yojana have created a sturdy safety net that protects households from slipping below subsistence levels.

Also, sustained economic growth, rising rural wages and improvements in connectivity, electrification and digital access have expanded both earning capacity and spending power. These gains are mutually reinforcing; a more secure household is also a more confident consumer.

What we are witnessing, therefore, is the emergence of a new consumption middle class: not the affluent middle that dominates urban markets, but a broader and sturdier base of households with modest but stable purchasing power.

They are buying more nutritious food, investing in education, using mobile data and accessing better healthcare than they did ten years ago. Their rising consumption is reshaping markets, driving demand for everyday goods and services and thus powering India’s domestic growth engine.

A shift in India’s development challenge: The transformation we have seen poses new policy challenges. As extreme deprivation recedes, India’s focus must shift from poverty reduction to consumption resilience. Instead of how many are below the poverty line, we must focus on how economically secure life is just above it.

Consumption growth must translate into improvements in nutrition, health, education and asset formation. Without such qualitative strengthening, today’s new middle could remain vulnerable to economic or climate shocks.

At the same time, India must keep an eye on distribution. The challenge is to sustain a balance: i.e., ensuring that the gains of growth remain broad-based and that future prosperity does not become top-heavy. Monitoring consumption across the distribution, rather than focusing only on income or access, will be key to maintaining this balance.

Upward mobility among the bottom deciles is an economic turning point. A wider base of real consumption strengthens domestic demand, creating a more stable foundation for India’s growth. It means a larger market for goods and services, deeper rural and semi-urban purchasing power and a more balanced growth model, less dependent on external demand.

Firms and investors should register this structural broadening of consumption as it alters product market strategies, credit markets and local supply-chain planning.

For too long, India’s discussions about poverty, inequality and mobility were conducted without the data needed to resolve disagreements. The new HCES gives the country something it has lacked for a decade: clarity. And the picture that emerges is encouraging, but also instructive.

India must consolidate and build on this progress, as it offers a stable foundation for the next phase of economic development.

The authors are, respectively, former director general, ministry of statistics, president, Centre of Data for Economic Decision-making (CoDED) and chief statistician, Pahle India Foundation (PIF); and head of CoDED and fellow, PIF.