Poverty Estimates in India

Poverty in India is on the decline. The all-India HCR(head count ratio) has declined by 7.3 percentage points from 37.2 percent in 2004-05 to 29.8 percent in 2009-10, with rural poverty declining by 8.0 percentage points from 41.8 percent to 33.8 percent and urban poverty declining by 4.8 percentage points from 25.7 percent to 20.9 percent. The ratio of poverty in Himachal Pradesh, Madhya Pradesh, Maharashtra, Odisha, Sikkim, Tamil Nadu, Karnataka and Uttarakhand has declined by about 10 percentage points and more.

However, in Assam, Meghalaya, Manipur, Mizoram and Nagaland, poverty had increased during 2009-2010. Some of the bigger states such as Bihar, Chhattisgarh and Uttar Pradesh have shown only marginal decline in poverty ratio, particularly in rural areas.

Poverty ratio for Social Groups

In rural areas, Scheduled Tribes exhibit the highest level of poverty (47.4 percent), followed by Scheduled Castes (SCs), (42.3 percent), and Other Backward Castes (OBC), (31.9 percent), against 33.8 percent for all classes.

In urban areas, SCs have HCR of 34.1 percent followed by STs (30.4 percent) and OBC (24.3 percent) against 20.9 percent for all classes. In rural Bihar and Chhattisgarh, nearly two-third of SCs and STs are poor, whereas in states such as Manipur, Odisha and Uttar Pradesh the poverty ratio for these groups is more than half.

Among religious groups

Sikhs have lowest HCR in rural areas (11.9 percent) whereas in urban areas, Christians have the lowest proportion (12.9 percent) of poor. In rural areas, the HCR for Muslims is very high in states such as Assam (53.6 percent), Uttar Pradesh (44.4 percent), West Bengal (34.4 percent) and Gujarat (31.4 percent).

In urban areas poverty ratio at all India level is highest for Muslims (33.9 percent). Similarly, for urban areas the poverty ratio is high for Muslims in states such as Rajasthan (29.5 percent), Uttar Pradesh (49.5 percent), Gujarat (42.4 percent), Bihar (56.5 percent) and West Bengal (34.9 percent).

For occupational categories:

Nearly 50 percent of agricultural labourers and 40 percent of other labourers are below the poverty line in rural areas, whereas in urban areas, the poverty ratio for casual labourers is 47.1 percent. As expected, those in regular wage/ salaried employment have the lowest proportion of poor. In the agriculturally prosperous state of Haryana, 55.9 percent agricultural labourers are poor, whereas in Punjab it is 35.6 percent.

The HCR of casual laborers in urban areas is very high in Bihar (86 percent), Assam (89 percent), Odisha (58.8 percent), Punjab (56.3 percent), Uttar Pradesh (67.6 percent) and West Bengal (53.7 percent).

Based on the Education level of head of the household:

In rural areas, as expected, households with ‘primary level and lower’ education have the highest poverty ratio, whereas the reverse is true for households with ‘secondary and higher’ education. Nearly two third households with ‘primary level and lower’ education in rural areas of Bihar and Chhattisgarh are poor, whereas it is 46.8 percent for UP and 47.5 percent for Odisha.

The trend is similar in urban areas. For categories by age and sex of head of the household

1. In rural areas, it is seen that households headed by minors have poverty ratio of 16.7 percent and households headed by female and senior citizen have poverty ratio of 29.4 percent and 30.3 percent respectively.

2. In urban areas, households headed by minors have poverty ratio of 15.7 percent and households headed by female and senior citizen have poverty ratio of 22.1 percent and 20.0 percent respectively against overall poverty ratio of 20.9 percent, collect household consumption expenditure data on a monthly basis.

3. The main point that emerges from the latest estimates is that the rate of reduction in poverty, using the Tendulkar poverty line, has accelerated considerably after 2004-05 and the rate of reduction in the five years between 2004-05 and 2009-10 is about 1.5 percentage points per year. This is twice as fast as the rate of reduction in the previous eleven years, i.e., 1993-94 to 2004-2005

05. The comparative position for the reduction in urban and rural areas on an annual basis in the two periods is given below: Year of NSS survey Rural Urban Total

1993-94: 50.1 31.8 45.3

2004-05: 41.8 25.7 37.2

2009-10: 33.8 20.9 29.8

Rate of reduction between 1993- 94 to 2004-05 (per year)

0.8 0.6 0.7

Rate of reduction between 2004-05 to 2009-10 (per year)

1.6 1.0 1.5

4. The pace of reduction in poverty varies across States. The rate of reduction was higher than average in Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, Karnataka, Uttarakhand, Himachal Pradesh and Sikkim. The rate of reduction was much lower than the average in Bihar, Uttar Pradesh and Chattisgarh.

5. The Tendulkar poverty line has been criticised on the grounds that it is too low, and therefore, under-estimates the scale of the population that needs special assistance. Any poverty line is essentially arbitrary and the Planning Commission has only accepted the line recommended by the Tendulkar Committee. The line will be revised from time to time based on the recommendations of experts.