4[1].2 Poverty Alleviation

8/4/2019 4[1].2 Poverty Alleviation

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Definition of poverty

India was the first country in the world to define poverty as the total percapita

expenditure of the lowest expenditure class, which consumed 2400 kcal /day inrural and 2100 kcal/day in urban areas and attempt to provide comprehensivepackage of essential goods and services to people below the poverty line. Initiallythe poverty line was defined on the basis of NSS Household ConsumptionExpenditure data for 1973-74. The poverty lines, defined as the basket of goodsand services, have not been changed subsequently in order to preserve inter-temporal comparability, but the rupee value of the lines is regularly updated usingthe large sample consumer expenditure survey of the NSSO in order to reflectprice increases that have taken place over the years.

Time trends in poverty

Time trends in poverty ratio computed by the Planning Commission on the basisof the quinquinial NSSO large sample survey is given in Figure 4.2.2. The NSSOreleased the result of the latest large sample survey data on householdconsumer expenditure (NSSO 61st Round), covering the period July 2004 toJune 2005. From this data, two different consumption distributions for the year2004-05 have been computed. The first one from the consumption data collectedusing 30-day recall period (also known as reference period) for all the items. Theother distribution is obtained from the consumer expenditure data collected using365-day recall period for five infrequently purchased non-food items, namely,clothing, footwear, durable goods, education and institutional medical expensesand 30-day recall period for the remaining items. These two consumptiondistributions have been termed as Uniform Recall Period (URP) consumptiondistribution and Mixed Recall Period (MRP) consumption distributionrespectively. The Planning Commission, using the Expert Group methodologyhas estimated poverty in 2004-05 using both the distributions .There was a slowbut steady decline in poverty during seventies and eighties. During the ninetiesthere was a change in the methodology used for computation of poverty line. In

order to eliminate possibledifferences in reported povertyratios due to the changedmethodology, the ApproachPaper to the Eleventh Planhas computed and presentedthe poverty ratios for 2004-05according to both themethodologies. These reviseddata suggest that the declinein poverty in the nineties is notas high as reported earlier.

Figure 4.2.2: Time trends inpovertyratio

0

1020

30

40

50

60

1973-74 1983 1993-94 1999-00 04-05

P e r c e n

t a g e

Poverty ratio

Poverty ratio (URPmethod)

Source: Reference 4.2.1

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Poverty and percapita net national product

Figure 4.2.3: Time trends in per capita net national product and percentpopulation belowpoverty line

5002500450065008500

10500125001450016500185002050022500

1973-74 1977-78 1983 1987-88 1993-94 1999-2000 04-050

10

20

30

40

50

60

Per capita net national product (Rs.)Percent Population belowpoverty lineSource: Reference 4.2.1 , 4.2.2

Poverty reduction is one ofthe major objectives of

economic growth.Economists recognise thateven when there is robusteconomic growth povertyreduction may not always befully achieved. Time trends inpercapita net nationalproduct and poverty ratioover the last three decadesis shown in Figure 4.2.3.Seventies and eighties

witnessed a slow butsustained economic growth and slow reduction in poverty ratio. During the lastten years there has been a steep increase in the economic growth; however thishas not resulted in a commensurate decline in poverty ratios (Approach paper tothe Eleventh Plan)

Interstate, urban rural differences in poverty

There are large interstate and urban rural differentials in cost of goods andservices. These are taken into account and state and urban and rural areaspecific poverty lines are defined. Rupee value of poverty line in different statesin urban and rural areas in 2004-05 is shown in Figure 4.2.4. The importance ofthis adjustment can be gauged from the fact that the poverty lines for the states

Figure 4.2.4: Urban rural and state specfic poverty lines (Rs/pm)

0

100

200

300

400

500

600

700

A s s a m

B i h a r

W e s

t B e n g a

l

J h a r

k h a n

d

P u n

j a b

U t t a r P r a

d e s h

H a r y a n a

H i m a c

h a l P r a

d e s h

O r i s s a

A l l - I n d i a

*

G u j a r a t

A n d

h r a

P r a

d e s h

T a m

i l N a d u

J a m m u

& K a s

h m i r

K e r a l a

R a j a s

t h a n

C h h a t

t i s g a r h

M a d

h y a

P r a

d e s h

K a r n a

t a k a

D e l

h i

U t t a r a

k h a n

d G o a

M a h a r a s

h t r a

D a d r a

& N

. H a v e l

i

R u p e e s / p e r c a p

i t a

/ p m

Rural Urban



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Table 4.2.1: Percentage of People living below Poverty LineRural UrbanYear

SCs STs All-Population SCs STs All-Population1993-94 48.1(1.29)

51.9(1.39)

37.3(1.00)

49.5(1.53)

41.1(1.27)

32.4(1.00)

1999-00 36.3(1.34)45.9

(1.69)27.1

(1.00)38.5

(1.63)34.8

(1.47)23.7

(1.00)

NOTE: Figures in brackets are the ratios of SC and ST population below the poverty line to the total Population below the poverty line.

with the highest prices are 43% and 57% higher for rural and urban areasrespectively than those of the states with the lowest prices. In all states exceptrural Assam the rupee value of poverty line is lower as compared to urban areas;the urban and rural differences are higher in Mahrashtra, Madhya Pradesh,Karnataka and relatively lower in Bihar, West Bengal, Punjab, Haryana and UttarPradesh.


Both in urban and in rural areas higher percentage of people belonging to SCand ST are below the poverty line as compared to all the population (Table4.2.1). During the nineties there was some reduction in poverty in all the groupsbut the difference between groups has not decreased. In fact the disparitybetween ST and rural population had widened during the nineties.

Figure 4.2.5: Percentage of population in poverty in states during 1999-2000in comparison to 1973-74

( Bottomfive & top five states)

0

10

20

30

40

50

60

70

J & K

G o a

C h a n d

i g a r

h

P u n

j a b

H P

A l l I n d i a

A s s a m

S i k k i m

M a d

h y a

P r a

d e s h

B i h a r

O r i s s a

P e r c e n

t

1973-74 1999-2000Source: Reference 4.2.9

There are wide interstates differences in terms of poverty reduction over time.Trends in poverty in top five and bottom five states during the nineties are shownin Figure 4.2.5. In 1983 more than 50 % of the population in Orissa, Bihar, WestBengal and Tamil Nadu were living below the poverty line. By 2000 In WestBengal and Tamil Nadu the poverty ratios declined by half but Orissa and Biharcontinue to be the poorest states with nearly half of their population being belowpoverty line. J&K, Himachal, Haryana, Andhra, Punjab and Maharashtra are the

other states which haveachieved significantdecline in prevalence ofpoverty. The difference inrates of decline in povertyhas resulted in wideningof the gap betweenstates; for instancepoverty ratio in Orissa iseight times higher thanthe poverty ratio in

Punjab. The differencesin poverty ratios betweenstates may have to beconsidered whileassessing factorsresponsible for the

interstate differences in dietary intake and nutritional status.

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Figure 4.2.6: Interstate differences in per capita net state product and poverty line (1999-2000)

25007500

1250017500225002750032500375004250047500

G o a

C h a n d

i g a r

h

D e l

h i

P o n

d i c h e r r y

P u n

j a b

M a h a r a s

h t r a

H a r y a n a

A n d a m a n

&

G u j a r a t

T a m

i l N a d u

H i m a c

h a l

K e r a l a

K a r n a

t a k a

M i z o r a m

W e s

t

A n d

h r a

S i k k i m

A r u n a c h a l

T r i p u r a

R a j a s

t h a n

M a n

i p u r

N a g a l a n

d

J a m m u

&

M e g

h a l a y a

M a d

h y a

A s s a m

U t t a r

O r i s s a

B i h a r

r u p e e s

0510

1520253035404550

%

Per capita net state product at current prices (Rupees) % Population below poverty line


Poverty and percapita net state product

Data on per capita state net product and poverty ratio for the states in 2000 and2005 are given in figure 4.2.6 and figure 4.2.7. Analysis of the data on interstatedifferences in net state product and poverty ratios provides several interestingfindings. The top five major states with low and high percapita state net productand poverty ratios were similar at both the time points. Both in 2000 and 2005,most of the states with high net state product had low poverty ratio and viceversa. However there are exceptions like J&K where poverty ratios are lowinspite of low per capita net state product. Maharashtra has relatively highpoverty ratios in spite of high per capita net state product. Thus state per capitaincome is an important but not the only determinant of poverty rates in the state.Large interdistrict disparities in development may account for relatively highpoverty ratio in states like Maharashtra inspite of high per capita net stateproduct.Poverty and energy intake

Figure 4.2.7: Interstate differences in poverty ratio and per capita net state product

2500

10000

17500

25000

32500

40000

B i h a r

U t t a r

P r a

d e s h

J h a r

k h a n

d

T r i p u r a

O r i s s a

A s s a m

M a d

h y a

P r a

d e s h

M a n

i p u r

J & K

R a j a s

t h a n

M e g

h a l a y a

U t t a r a n c

h a l

A r u n a c h a l

P r a

d e s h

W e s

t

B e n g a

l

A n d

h r a

P r a

d e s h

K a r n a

t a k a

S i k k i m

T a m

i l N a d u

K e r a l a

H i m a c

h a l

P r a

d e s h

G u j a r a t

P u n

j a b

M a h a r a s

h t r a

H a r y a n a

R u p e e s

051015

20253035404550

%

Per capita net state product at current prices% population below poverty line 04-05

Source: Reference 4.2.1 , 4.2.2


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Figure 4.2.8: Time tr ends in poverty ratio and percapita energy intake- All India

0

10

20

30

40

50

60

1973-74 1983 1993-94 1999-00 04-05

%

18501900195020002050210021502200

22502300

k c a

Poverty ratioPover ty ratio (URP method)Rural Energy IntakeUrbanEnergy Intake

Source: Reference 4.2.1, 4.2.2 , 4.2.6 , 4.2.9

Energy intake has been used as the major factor for determining the poverty linein India. It is thereforelogical to explore thecurrent relationshipbetween these two

parameters. Data on timetrends in poverty ratio andenergy consumptioncomputed from NSSOconsumer expendituresurvey is given in Figure4.2.8. Contrary to theexpectations the decline inpoverty is notassociated with anincrease in the energy

intake. Over this timeperiod the food grain were readily available and accessible to all and prices havebeen quite low especially for the below poverty line families. Therefore thedecline in energy intake cannot be due to problems in access or affordability ofthe food. Perhaps the major factor responsible for the decline is the reduction inenergy requirements due to changes in the life style among the population.

Interstate differences in poverty and energy intake

Interstate differences in poverty ratio and energy intake in rural and urban areasfrom NSSO consumption expenditure surveys and INP survey are shown inFigure4.2.9, Figure 4.2.10 and Figure 4.2.11. In most of the states both povertyratios and energy intake were lower in urban areas. In some states such asMahrashtra there were substantial differences in the urban-rural poverty ratios aswell as energy intake.

In states like Punjab, Himachal and J&K poverty ratios were low and energyconsumption was high. However in other states with low poverty ratios such assuch as Goa, Karnataka, Tamil Nadu and Gujarat energy intake was also low. Atthe other end of the poverty spectrum were states like Bihar, Jharkhand, Orissa,Chattisgarh and UP where in spite of high poverty levels energy intake was high.This is most probably because substantial proportions of the population in thesestates are still engaged manual work for livelihood and require higher energyintake. These data suggest in majority of the population poverty and economicconstraints are not the major factors affecting energy intake; energy requirementmostly related to occupational and household chores continues to be animportant factor determining energy intake among poorer segments of thepopulation.


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Figure 4.2.9: Inter state dife rence in pover ty and Ener gy intake (CU/diem ) inrural areas

0

500

1000

1500

2000

25003000

3500

G o a

T r i p u r a

K a r n a

t a k a

T a m

i l N a d u

M e g

h a l a y a

S i k k i m

G u j a r a t

M a d

h y a

P r a

d e s h

D e l

h i

M a h a r a s

h t r a

C h h a t

i s g a r h

J h a r

k h a n

d

A n d

h r a

P r a

d e s h

C h a n d

i g a r

h

N a g a l a n

d

O r i s s a

A s s a m A

L L

W e s

t B e n g a

l

K e r a l a

B i h a r

U t t r a n c h a l

R a j a s

t h a n

H a r y a n a

U t t a r P r a

d e s h

P u n

j a b

M a n

i p u r

A r u n a c h a l

J a m m u

& K a s

h m i r

H i m a c

h a l

M i z o r a m

k c a

05101520253035404550

%

Energy Intake% Population below pover ty lineSource: Reference 4.2.1 & 4.2.6

Figure 4.2.10: Inters tate differe nces in poverty and e nergy intake (CU/diem) inurban areas

0

500

1000

1500

2000

2500

3000

3500

G o a

M a h a r a s

h t r a

S i k k i m

M e g

h a l a y a

K a r n a

t a k a

T a m

i l N a d u

M a d

h y a

P r a

d e s h

G u j a r a t

A n d

h r a

P r a

d e s h

W e s

t B e n g a

l

A L L

H a r y a n a

D e l

h i

K e r a l a

C h h a t

i s g a r h

T r i p u r a

R a j a s

t h a n

A s s a m

O r i s s a

U t t a r P r a

d e s h

P u n

j a b

M a n

i p u r

A r u n a c h a l

P r a

d e s h

U t t r a n c h a l

B i h a r

C h a n d

i g a r

h

J a m m u

& K a s

h m i r

H i m a c

h a l P r a

d e s h

M i z o r a m

N a g a l a n

d

J h a r

k h a n

d

k c a

0510152025

3035404550

%

Energy Intake% Population below poverty line

Source: Reference 4.2.1, 4.2.6


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Figure4.2.11: Interstate differences in poverty ratio and Energy intake

0

500

10001500

2000

2500

3000

M e g

h a l a y a

T a m

i l N a d u

A r u n a c h a l

P r a

d e s h

A s s a m

M i z o r a m

M a h a r a s

h t r a

G o a

O r i s s a

D e l

h i

N a g a l a n

d

S i k k i m

K a r n a

t a k a

K e r a l a

M a d

h y a

P r a

d e s h

G u j a r a t

T r i p u r a

H i m a c

h a l

P r a

d e s h

H a r y a n a

P u n

j a b

R a j a s

t h a n

C h a n d

i g a r

h

A n d

h r a

P r a

d e s h

B i h a r

M a n

i p u r

k c a

l

05101520253035404550

%

Energy Intake (INP, 1995-96)% Population below poverty lineSource: Reference 4.2.9

Available data from NSSOindicate that over the lastthree decades there hasbeen substantial change inthe food preferences of thepopulation. These changeshave some cost implicationsand could result in changesin the amount spent percalorie energy. The NSSHousehold ConsumptionExpenditure data for 1999-2000 indicates that theactual calorie intake of thepoverty-line class in everystate and in both rural andurban areas is significantlybelow the calorie norm(except in urban Orissa).However data from NSSOclearly shows that the actualcost per calorie consumed varies widely between different income groups inevery state and in both the rural and urban areas. NSSO data suggest that ineach state there does exist a food basket which is actually consumed by a largeclass of people and which yields much higher calories per rupee spent on foodand that if the poverty-line class were to consume this particular basket, it wouldbe able to meet the calorie norms with its actual expenditure on food (Table4.2.2). These data suggest that the apparent low energy consumption is not somuch the result of a lack of income or purchasing power, but of the choice of afood basket by the BPL population.

Table4.2.2: Potential Calorie Intake of Poverty-lineClass

Rural UrbanState Calories

per day

Percentage of Norm

(2400)

Caloriesper day

Percentageof Norm(2100)

AP 2424 101 2457 117

Assam 2258 94 1481 71

Bihar 2252 94 2605 124

Gujarat 2197 92 2069 99

Haryana 2311 96 1526 73

HP 2714 113 2277 108

Karnataka 2304 96 2682 128

Kerala 1456 61 2004 95

MP 2584 108 2360 112

Maharashtra 2326 97 2451 117

Orissa 2507 104 2720 130

Punjab 2266 94 2183 104

Rajasthan 3016 126 2561 122

TN 2215 92 2050 98

UP 2266 94 2027 97

WB 2633 110 2089 99Source:; Reference 4.2.8 , Pranab Sens article

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There is also an ongoing debate whether in addition time has come change fromonly energy to a basket of foodstuffs essential for balanced diet such as cereals,pulses and vegetables in the definition of the essential cost of food for definingthe poverty line.

Poverty and nutritional status

Time trends in poverty and nutritional status of preschool children and adultsduring the last three decades is shown in Figure 4.2.12 & 4.2.13. The eightiesand early nineties witnessed a relatively slow but steady decline in poverty andundernutrition in children. The decline in undernutrition rate in children during thisperiod mainly was due to improved access to health care rather than increase indietary intake. During the last decade the reduction in both poverty andundernutrition in children has been relatively slower. The slow reduction inundernutrition might be due to the fact that there has not been any improvement

in infant and young child feeding practices, deterioration in intrafamily distributionof food and caring practices for preschool children. All these are unrelated toeither income or poverty and can be improved only through persistent behavioralchange communication.Recognizing the potential linkages between child undernutrition and humandevelopment UN have included child under nutrition as one of the indices forcomputation of. Human Poverty Index for measuring deprivation for developingcountries. Human poverty index is a composite index which takes into accountthe probability at birth of not surviving to age of 40, adult literacy rates, andpopulation without sustained access to improved water source and childrenunder weight for age. Data presented above indicates that in India undernutritionexists even in the absence of socioeconomic deprivation. It is essential toinvestigate in depth the relationship between indices for assessment of

Figure4.2.12: TimetrendsinpovertyratioandPrevalenceof undernutritioninchildren(1-5y)

0

10

20

30

40

50

60

70's 80's 90's 00 05

%

30

40

50

60

70

80

%Populationbelowpoverty line%Populationbelowpoverty line(URPmethod)UnderweightSource: Reference4.2.1, 4.2.9

Figure4.2.13: Timetrendsinpovertyratioandprevalenceof undernutritionamong adults

0102030405060

70's 80's 90's 00 05

%

0102030405060

%

%Populationbelowpovertyline%Populationbelowpovertyline(URPmethod)MaleFemale

Source: Reference4.2.1, 4.2.9


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Figure 4.2.14: Interstate differences in poverty and nutritional status of children under 3years

010203040506070

P u n

j a b

K e r a l a

D e l

h i

T a m

i l N a d u

A n d

h r a

P r a

d e s h

M a h a r a s

h t r a

A s s a m

K a r n a

t a k a

H a r y a n a

W e s

t

B e n g a

l

R a j a s

t h a n

O r i s s a

U t t a r

P r a

d e s h

G u j a r a t

B i h a r

M a d

h y a

P r a

d e s h

%

05101520253035404550

%

Underweight% population below poverty line 04-05

Source: Reference 4.2.1 , 4.2.3 , 4.2.5

undernutrition in children and poverty and deprivation in India.

Interstate differences in poverty and nutritional status

Inter state differences poverty and undernutrition in preschool children andwomen in shown in Figure 4.2.14 and Figure 4.2.15. States with high povertyhave higher undernutrition rates as compared to states with low poverty ratio.None of the states with high poverty have low under nutrition rates and viceversa. It would thus appear that unlike the relationship between per capitaincome and poverty and poverty and energy intake, there is a much greaterconcordance between poverty and nutritional status at the state level. This isperhaps because poor people have a poor energy balance (more energyexpenditure as compared to energy intake) due to heavy manual work, highmorbidity due to infections (because they live in areas with poor environmentalsanitation and lack of access to safe drinking water) and more severe andprolonged infections (due to poor access to health care). These data emphasizethe need for focus on programmes aimed at reducing poverty and simultaneouslyprogrammes aimed at providing access to all essential goods and services to thepoor in order to achieve sustained improvement in nutritional status of thepopulation.

Figure 4.2.15: Interstate difference in poverty and nutritional status among women

01020304050

D e l h i

K e r a

l a

P u n

j a b

T a m

i l N a d u

H a r y a n a

A n d

h r a

P r a

d e s h

K a r n a

t a k a

G u j a r a t

M a h a r a s

h t r a

R a j a s

t h a n

U t t a r

P r a

d e s h

A s s a m

W e s

t

B e n g a l

M a d

h y a

P r a

d e s h

O r i s s a

B i h a r

%

01020304050

%

BMI


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F i g u r e 4 . 2 . 1 6 : I n t e r s t a t e d i f f e r e n c e s i n p o v e r t y r a t i o a n d st a t e sp e c i f i c p o v e r t y r e d u c t i o n go a l f o r 1 0 t h p l a n

0

510

15

20

25

30

35

40

45

50

0

510

15

20

25

30

35

40

45

50

Tenth Plan Goal% population below poverty line 04-05

Source: Reference 4.2.1 , 4.2.9

The ambitious national goal of 8 % GDP growth during Tenth Five Year Plan wasnot achieved, but the Tenth Plan witnessed the highest ever GDP growth till now.The Approach paper to the Eleventh Plan indicates that the country expects tosurpass this and achieve a 10% GDP growth during the next five years. Statespecific Tenth Plan goals for poverty reduction (by 2007) and the poverty ratios(in 2005) are given in Figure 4.2.16. It is noteworthy that two states that have

achieved the goals set for 2007 by 2005 are Bihar and Assam. All other statesare yet to achieve the goals. It is surprising that states, which are doing well interms of state GDP growth such as Maharashtra, Gujarat and Tamil Nadu havenot been able to achieve goals, set for reduction in poverty. Taking note of thisthe Approach paper to the Eleventh Plan has laid a major emphasis not only onaccelerating the economic growth but also on achieving inclusive growth whichresults in reduction in economic disparities, greater employment opportunities,reduction in poverty and improved access to essential goods and services to all.Such a focus could result significant reduction both in poverty and undernutrition.

References

4.2.1 Approach Paper Eleventh Five Year Plan 2007-2012:http://planningcommission.nic.in/plans/planrel/appdraft.pdf ; last accessed on 24/09/07

4.2.2 Economic Survey of India 2006-07: http://indiabudget.nic.in/es2006-07/esmain.htm ; lastaccessed on 24/09/07

4.2.3 Indias Undernourished Children: A Call For Reform and Action, World Bank Report:http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/IndiaUndernourishedChildrenFinal.pdf ; last accessed on 24/09/07

4.2.4 Indian Nutrition Profile - Interstate differences in energy intake: DWCD, Ministry ofHuman Resource Development, GoI, 1998

4.2.5 National Family Health Survey (NFHS-3): http://mohfw.nic.in/nfhsfactsheet.htm ; lastaccessed on 24/09/07

4.2.6 National Sample Survey Organisation: http://mospi.nic.in/mospi_nsso_rept_pubn.htm ;last accessed on 24/09/07

4.2.7 Poverty Estimates for 2004-05: http://planningcommission.gov.in/news/prmar07.pdf ; lastaccessed on 24/09/07

4.2.8 Poverty-Undernutrition Linkages, NFI Bulletin, January, 2005:http://nutritionfoundationofindia.res.in/archives.asp?archiveid=210 : last accessed on24/09/07

4.2.9 Tenth Five Year Plan 2002-2007:http://planningcommission.nic.in/plans/planrel/fiveyr/welcome.html ; last accessed on24/09/07

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