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Resource centre on India's rural distress
 
 

Fewer poor, but still a long way to go-Asit Ranjan Mishra

India doubled the pace at which it has been reducing poverty in rural areas in the five years to 2009-10 by moving around 47 million over the so-called poverty line. Interestingly, the five years to 2009-10 also saw India grow the fastest in any five-year period in the past, at an average of 8.7%. In the same period, 5 million people in urban India moved above the poverty line.

The numbers are likely to prove controversial because they are based on new definitions—a daily per capita consumption of Rs.22.40 in rural India and Rs.28.60 in urban India. For a family of four, this would translate into around Rs.90 a day in rural India (or Rs.2,700 a month) and Rs.114 in urban India (or Rs.3,420 a month). Those numbers aren’t counter-intuitive, say analysts, although they speak of a very basic level of consumption. They also mark an increase over the consumption of Rs.14.88 a day in rural India and Rs.19.29 a day in urban India that was used to measure poverty in 2004-05.

The data released on Monday by the Planning Commission is based on the 66th round (2009-10) of the household consumer expenditure survey, and showed that while the average annual decline of poverty in rural India for the 10 years ended 2004-05 was 0.83%, this went to 1.6% in the five-year period to 2009-10.

According to the data, poverty in urban India declined to 20.9% of the total population in 2009-10 from 25.7% in 2004-05. In rural India, it declined to 33.8% from 41.8% in the earlier estimate. At the all-India level, poverty declined to 29.8% from 37.2% in 2004-05.

The 2009-10 numbers are based on a new poverty line defined by a per-capita monthly consumption level using a formula prescribed by the Suresh Tendulkar committee: Rs.672.80 in rural India and Rs.859.60 in urban India.

Pronab Sen, principal adviser in the Planning Commission, said this has been the fastest rate of poverty reduction ever. “The high economic growth seems to be getting realized in poverty reduction,” he said.

Sen said the latest reduction of poverty is more significant as it captures the monsoon failure of 2009, which led to a severe drought in most parts of the country.

N.C. Saxena, member of the National Advisory Council headed by United Progressive Alliance chairperson Sonia Gandhi, said even though absolute poverty is declining, a large number of people are facing deprivation. “We cannot be smug about this achievement,” he said.

Sen admitted as much and said the rate of poverty reduction was still not good enough. “At the present pace, it will still take us another 20 years to get rid of poverty,” he said.

The latest data further confirms the housing census data for 2011 released on 13 March, which showed the country is exhibiting distinct signs of trading up as material living conditions improve for large sections of the rural population.

The census data showed people in rural India saw significant improvement in the quality of houses they lived in, as they did in terms of access to water. They also saw similar improvement in access to banking facilities, with over one in two households having access to a bank as compared with a little less than one in three in the 2001 census.

According to the latest estimates, India’s overall poverty declined by 1.48% a year in the five-year period to 2009-10, compared with 0.8% in the 10 years to 2004-05.

Indeed, the poverty ratio in states such as Himachal Pradesh, Madhya Pradesh, Maharashtra, Orissa, Sikkim, Tamil Nadu, Karnataka and Uttarakhand has declined by at least 10 percentage points.

However, it has increased in the five north-eastern states of Assam, Meghalaya, Manipur, Mizoram and Nagaland.

Some of the bigger states such as Bihar, Chhattisgarh and Uttar Pradesh have shown only a marginal decline in the poverty ratio, particularly in rural areas.

Orissa, which had the highest percentage of poor in 1993-94 at 57.2%, now has 37% of its population living below the poverty line. Similarly, Madhya Pradesh has reduced its poverty level from 48.6% in 1993-94 to 36.7% in 2009-10.

Saxena said the below expectation performance of Bihar is puzzling.

Among religious groups, Sikhs display the lowest poverty level in rural areas (11.9%) and the Christians (12.9%) in urban areas. Muslims fare badly in both rural and urban areas, with almost one in three in urban areas living below the poverty line. Agricultural workers in rural areas (one in two) and casual labourers in urban areas (nearly one in two) fare badly too.

Remya Nair contributed to this story.