For years, India’s poverty narrative focused on the rural poor, daily wage earners, and marginalised communities. But in 2025, it is time to update that list. The new poor in India is the lower-middle class, the taxi driver in Delhi earning Rs. 25,000 a month, the nurse in a private hospital, the teacher in a low-fee school. They are not officially “poor” on paper, but in real life, they are one financial shock away from collapse.
The government says 64.3 per cent of the population is covered under some social security scheme, which sounds like a safety net. But when coverage replaces real care and slogans substitute for systemic support, someone gets left out. That someone is the lower-middle class, and they are falling fast, while no one is counting.
Social Schemes Are Helping The Bottom, Not The Squeezed Middle
According to the government’s SDG Progress Report 2025, nearly 95 crore people are now enrolled in at least one welfare scheme. Prime Minister Modi called this a transformation in citizen support. The schemes include PM KISAN, food grain distribution, widow pensions, and health incentives.
These may be lifelines for the poorest, but they do little for the working poor who are just above the poverty line. Aunindyo Chakravarty, a political economist, says the poorest 30 per cent have indeed benefited in recent years. However, the lower-middle class, those earning enough to disqualify from subsidies but not enough to live comfortably, are in deep trouble.
A driver who earns Rs. 25,000 a month in Delhi does not get free food, affordable health insurance, or education support. He pays rent, school fees, and electricity bills, but gets no recognition as someone in need. He is not poor enough for aid and not rich enough to survive rising costs. This is India’s policy blind spot.
An Outdated Poverty Line That Misses The Real Story
The official poverty rate has dropped from 24.85 per cent in 2015-16 to 14.96 per cent in 2019-21. That sounds like good news until you realise that the poverty line itself is outdated. India still uses numbers based on the 2011-12 Tendulkar Committee, which set the urban poverty line at Rs. 1,000 per person per month. That is just Rs. 33 a day.
This number has been adjusted for inflation, but not for reality. Education, rent, transport, healthcare, and food costs have all gone up sharply. Yet the consumption basket used to define poverty remains nearly the same. According to Chakravarty, this makes the line meaningless for modern living.
People earning Rs. 10,000 to Rs. 30,000 a month, especially in cities, are invisible to both policymakers and the public debate on poverty. They are classified as middle class, but they are sinking into debt and daily stress.
More Coverage On Paper, But No Rise In Actual Spending
The government’s achievement of expanding social security coverage to 64.3 per cent sounds big. But experts note that government spending on essential services like health, education, and protection has remained stagnant in the past decade. The rise in beneficiaries has not been matched by a rise in budget allocation.
Schemes like PM KISAN provide Rs 500 a month, a sum that does not even cover a cylinder refill or monthly transport costs. PM Garib Kalyan Anna Yojana, now merged with the National Food Security Act, offers food grain support but does not address nutrition, job security, or wage stability.
Reetika Khera, development economist and welfare researcher, says these are not structural solutions. They help people survive today, but do not help them thrive tomorrow. And once again, those just outside the scope of these schemes, the lower-middle class, are left unsupported.
The Poverty Numbers Depend On Who Gets Counted
The government also claims to have lifted 171 million people out of extreme poverty, citing World Bank estimates based on the $2.15 per day poverty line. By this measure, India’s poverty rate fell from 16.2 per cent in 2011-12 to just 2.3 per cent in 2022-23.
But in 2024, the World Bank revised the global poverty line to $3 per day, instantly adding 125 million people worldwide to the ranks of the extreme poor. If this line were applied to India, many people in the lower-middle class would fall below it. But India was labelled an outlier due to revised household consumption surveys, which helped keep poverty estimates low.
This is statistical sleight of hand. The line was moved, and so were the results. A family earning Rs. 25,000 a month in a city may be above the old poverty line, but is still struggling with inflation, school fees, and rising rent. In practice, they are poor. On paper, they are not.
Hunger Is Still High, Even If the Reports Say Otherwise
Even though the SDG report does not include hunger as a poverty measure, the 2024 Global Hunger Index ranked India 105th out of 127 countries, placing it in the “serious” category. The index found that 13.7 per cent of Indians are undernourished and 35.5 per cent of children under five are stunted.
The government rejected the index, calling it flawed. But MoSPI’s own data, released in July 2024, shows that the bottom 5 to 10 per cent of the population consumes significantly fewer calories than the average. The poorest are still struggling to eat well, and so are parts of the lower-middle class who are cutting down on nutrition to save money.
Dr Raj Bhandari, a member of the Right to Food campaign, says these trends are dangerous. “People are surviving on cereal-heavy, protein-deficient diets. Families are skipping milk, eggs, and vegetables. Even those earning more than Rs. 20,000 a month are making these cuts, which is a hidden form of hunger,” he explained.
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Public Services Are Weak, And The Middle Class Pays The Price
India has made some health gains in vaccinations and TB treatment, but structural weaknesses remain. There are still fewer than one doctor per 1,000 people and only one psychiatrist for every lakh. Private healthcare fills the gap, but it is unaffordable for the lower-middle class.
Similarly, while school enrolment has increased, the quality of education has dropped. As per the report, the percentage of students meeting minimum proficiency in language and math has declined. Families that cannot afford private coaching are being left behind.
The lower-middle class is paying out of pocket for everything, school, transport, medicine, electricity, but gets little in return. They are too poor to thrive and too rich to receive support. It is a lose-lose situation.
Phones And Connectivity Are Not Indicators Of Progress
The report highlights that 84.75 per cent of the population owns a phone or wired line and that 99.06 per cent is covered by 4G networks. But this is not a sign of prosperity. It is a sign of necessity.
Aunindyo Chakravarty says mobile phones today are tools for survival. “A delivery boy, a plumber, and a home tutor all need phones for work. It is their office, their contact list, their bank,” he says. Ownership does not mean comfort. It often reflects a person’s need to stay in the game just to get by.
The digital divide has narrowed in terms of access, but not in quality, affordability, or utility. For many, especially in the lower-middle class, the phone is the only functioning link to a broken system.
The Poor We Don’t Count Are the Ones We Fail
India’s poverty story today is more complex than numbers suggest. Yes, extreme poverty has reduced. Yes, more people are covered by some social protection. But none of this has helped the lower-middle class, who are caught in the grey zone between official definitions and everyday survival.
They do not show up in surveys, they do not make it into speeches, and they do not qualify for welfare. Yet they are the ones bearing the brunt of economic slowdown, inflation, and a shrinking safety net.
It is easy to win applause for pulling people out of poverty. It is harder to face the truth that while the bottom has moved up slightly, the middle is slipping down quietly. If India wants to be serious about development, it needs to stop counting what is convenient and start fixing what is critical.
Images: Google Images
Sources: Quint, The Indian Express, The Hindu
Find the blogger: Katyayani Joshi
This post is tagged under: poverty in India, lower middle class crisis, India’s new poor, social security India, urban poverty India, indian welfare gaps, Modi government data, economic inequality India, PM Kisan flaws, hunger index India, India education healthcare gap, India SDG report, invisible poor India
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