This is revealed by the Socio Economic and Caste Census (SECC), which counted 315.7 million Indians in rural areas as illiterate in 2011, the same year as the census and the highest number of illiterates of any country in the world.
Put another way, rural India has more illiterate people than the population of Indonesia the world's fourth-most populous country and twice the population of Pakistan.
Released last week, the SECC, which focused on rural India, counted more people (literate and illiterate) than the census: 35.73 percent of Indians in rural areas as illiterate, as against 32.23 percent counted by census 2011.
The new data has also revealed the low levels of literacy in rural India.
Those who are literate can barely read or count
As many as 14 percent (123 million people) of literate Indians in rural areas have not studied past class five, while 18 percent (157 million) have completed primary education, or class five.
Given that educational levels in India do not reflect real learning, 280 million literate Indians in rural areas are only nominally literate.
As IndiaSpend reported earlier, only a fourth of all children in class III can read a class II text fluently, a drop of more than 5 per cent over four years. With math, a quarter of children in class III could not recognise numbers between 10 and 99, a drop of 13 per cent over four years, according to the 2014 Annual Status Report on Education (ASER).
Only 3 per cent (three million) of Indians in rural areas have completed graduation or a higher level of education.
Central India reported the highest illiteracy rate of 39.20 per cent and east India 38.79 per cent, followed by west India (35.15 per cent), north India (32.87 per cent), the northeast (30.2 per cent) and south India (29.64 per cent).
Union territories fared the best with less than 15 per cent of the population illiterate.
Rajasthan reported the worst illiteracy rate: 47.58 per cent or 25.88 million people, followed by Madhya Pradesh with 44.19 per cent or 22.80 million illiterate people, Bihar with 43.85 per cent or 42.89 million illiterate people and Telangana with 40.42 per cent or 9.5 million illiterate people.
The surprises are the presence of the southern states of Telangana and Andhra Pradesh in the top 10 state for illiteracy.
Kerala is another surprise in the SECC analysis. While state surveys and the census have repeatedly claimed a literacy rate of more than 90 per cent, the SECC report says 11.38 per cent, or 3 million Keralites, are illiterate.
Among union territories, Dadra & Nagar Haveli reported the highest illiteracy rate of 36.29 per cent.