From 2004-2005 to 2009-2010, the rate fell from 37.2% to 29.8%, which means around 360 million people currently live in poverty.
Rural poverty has declined faster than urban poverty during this period.
The Planning Commission said the main reason for the reduction in poverty was the government’s increased spending on rural welfare programmes.
“This is not surprising. Such an outcome is on expected lines as this is the period when the government increased the expenditure on flagship programmes substantially,” Planning Commission member Mihir Shah was quoted as saying by The Economic Times.
“We gave money to the people and the result is a direct impact of that.”
According to the Planning Commission, rural poverty fell by 8%, compared to urban poverty which declined by 4.8%.
There are various estimates on the exact number of poor in India.
Officially, 37% of India’s 1.21 billion people live below the poverty line. But one estimate suggests the figure could be as high as 77%.
Last year a recommendation by the Indian Planning Commission to set the poverty line at 32 rupees ($0.65; £0.40) a day stirred a major debate across the country.
“In Assam, Meghalaya, Manipur, Mizoram and Nagaland, poverty in 2009-10 has increased,” the commission said in a statement.
The populous northern state of Uttar Pradesh also saw a rise in the number of poor people.
Last year, a World Bank report said attempts by the Indian government to combat poverty were not working.
It said aid programmes were beset by corruption, bad administration and under-payments.