Poverty Alleviation through Social Welfare Schemes: Evidence from India

Abstract

India’s poverty reduction story over the last two decades is increasingly explained not only by growth, but also by the scale and design of social welfare schemes that address multiple deprivations—food insecurity, inadequate housing, low human capital, weak livelihoods, and vulnerability to shocks. This paper assesses poverty alleviation through major welfare interventions in India using (i) national multidimensional poverty evidence, and (ii) scheme output indicators from flagship programs such as the National Food Security Act (NFSA) framework (including large-scale food support), MGNREGA, PMAY-G, and DAY-NRLM. Evidence from India’s National Multidimensional Poverty Index (MPI) shows a sharp decline in multidimensional poverty headcount ratio from 24.85% (2015–16) to 14.96% (2019–21), with projections suggesting 11.28% by 2022–23; an estimated 24.82 crore people exited multidimensional poverty between 2013–14 and 2022–23. The paper explains the economic pathways through which welfare schemes reduce poverty—consumption smoothing, risk protection, asset creation, and improved access to services—while identifying implementation challenges (targeting, portability, payment delays, and quality of assets). The study concludes that India’s welfare architecture has played a material role in lowering multidimensional deprivation, but future gains depend on improved governance, convergence, and outcome-based monitoring.