Attempts by the Indian government to combat poverty are not working, according to the World Bank.
Billions of dollars - more than 2% of its gross domestic product - is spent on helping the poor.
But a new World Bank report says aid programmes are beset by corruption, bad administration and under-payments.
As an example, the report cites grain: only 40% of grain handed out for the poor reaches its intended target.
The BBC reports it was the first time that India's major schemes had been evaluated.
The World Bank says a public distribution programme, which accounts for up almost half the money, has brought limited benefits. It gives subsidised food and other goods to the poor.
The report says one landmark scheme, launched more than five years ago, aims to guarantee government work for the rural unemployed.
But the World Bank found that it was failing to have an impact in the poorest states because of under-payments and bad administration.
The BBC reports the report's findings are embarrassing for the Congress party, which leads the coalition government.
Although India is seeing rapid growth, more than 40% of its population lives below the poverty line.