Sri Lanka’s poverty deepens amid economic recovery while India’s digital welfare programs lift millions. A call for targeted reforms, climate-smart strategies, and inclusive infrastructure.
Sri Lanka is grappling with a worsening poverty crisis, while neighboring India has made tremendous strides in lifting millions out of extreme poverty through strategic, digitally-driven social programs. The contrast is stark and increasingly instructive as Sri Lanka’s household incomes remain below pre-crisis levels, food insecurity and malnutrition worsen, and nearly a third of the population lives in poverty or teeters on its edge. Experts argue that the government must urgently develop and implement scientific, targeted poverty alleviation measures as a national priority.
India’s poverty alleviation efforts stand out. Between 2011–12 and 2022–23, India’s extreme poverty rate dropped from 27.1% to 5.3%, lifting 269 million people above the international poverty line. The success is attributed not just to economic growth but also to programs like PM Jan Dhan Yojana, which brought over 500 million people into the formal banking system, enabling direct benefit transfers (DBTs) that reduced corruption and improved efficiency.
In contrast, Sri Lanka’s economic collapse in 2022 reversed prior gains in poverty reduction. The World Bank’s latest country update reports that the poverty rate in 2024 remained at 24.5%, nearly double the 2019 rate of 11.3%. Although macroeconomic fundamentals are gradually stabilizing, household incomes have yet to recover. Consequently, poverty remains entrenched, food insecurity is rising, and malnutrition is becoming a long-term threat to human capital development.
Data reveals that food prices more than doubled between 2021 and 2024, triggering significant dietary changes. Households cut back on nutritious foods, leading to a rise in underweight and stunted children under age five—from 12.2% to 17% and from 7.4% to 10.5%, respectively. The cycle of poverty is now closely linked with poor health and limited educational opportunity, creating intergenerational impacts that could persist for decades.
To break this cycle, Sri Lanka needs a modern, data-backed poverty agenda. Experts urge that poverty reduction must not be seen as a mere welfare scheme but as a central pillar of national recovery and economic competitiveness. With recent IMF-backed reforms underway, this is a pivotal moment to pivot toward inclusive, pro-poor policies.
India’s multidimensional poverty reduction also provides a useful benchmark. Its Multidimensional Poverty Index (MPI) dropped from 53.8% in 2005–06 to 15.5% in 2022–23. Much of this success was enabled by digital infrastructure that allowed real-time targeting and delivery of benefits. For example, Ayushman Bharat offers up to US$6,000 in free health insurance per year to low-income families, protecting millions from catastrophic health costs. In Sri Lanka, though healthcare is theoretically free, many rely on expensive private services, making such support mechanisms essential.
Another key initiative in India was the Ujjwala Yojana, which distributed LPG connections to over 100 million poor families. In Sri Lanka, many families reverted to firewood during the economic crisis due to high cooking gas prices. Energy access, therefore, must be integrated into any meaningful poverty alleviation plan.
Sri Lanka’s existing welfare program, Samurdhi, has been widely criticized for inefficiency, politicization, and poor targeting. It lacks the digital backbone that has enabled India’s success. Sri Lanka’s recent appeal to India for assistance in digital infrastructure could be a turning point if matched by strong political will and implementation capacity.
Climate change poses yet another challenge to poverty reduction in South Asia. The region is now considered the most climate-vulnerable globally. Intensifying droughts, floods, cyclones, and heat waves threaten economic livelihoods, particularly for the poor who depend on agriculture and livestock. More than 750 million South Asians have faced climate-related disasters over the past two decades. The World Bank warns that climate shocks could severely degrade living conditions for up to 800 million people in the region.
Poverty alleviation programs must therefore incorporate climate-smart solutions. Strategies must be tailored to help communities build resilience, adopt sustainable practices, and buffer against environmental shocks. Failure to do so risks erasing hard-won development gains.
Sri Lanka’s President Anura Kumara Dissanayake has pledged to protect marginalized communities. Yet, unless supported by meaningful reform and targeted, technology-backed action, such promises will ring hollow. Sri Lanka must now move decisively, drawing from successful regional models and investing in data-driven, inclusive systems to lift its people out of poverty not just for today, but for generations to come.
