Statewise Poverty Comparison

Incidence of poverty varies largely across states. On the one end of the spectrum lie the developed states like Punjab and Haryana where poverty ratio lies within a single digit, while Orissa and Bihar lie at the other end with above 40 percent of the population remaining below the poverty line in recent years.

The overall ranking of states has not undergone much change over the years. The highest poverty incidence continues to prevail in Orissa for rural areas and in Madhya Pradesh for urban areas. Bihar and Uttar Pradesh too have high poverty.

Poverty incidence is the least in Punjab at 5-6% of the population in both rural and urban areas. Haryana ranks second best with 8-10% poverty. Kerala and Andhra Pradesh have made big progress in reducing rural poverty to a low level of about 10% in rural areas, but not as much in urban areas. Kerala, Andhra Pradesh, Punjab, Haryana and Gujarat are among the best performing states in terms of poverty reduction. These are also the states which have been doing better than average on the growth front. Karnataka and West Bengal, the two best performers on the growth front in the post reform era, have reduced poverty only moderately.

Incidence of Poverty

Incidence of poverty varies widely across social groups. High incidence of poverty prevails among the scheduled tribe and scheduled caste population, which have suffered from social and/or economic exclusion for centuries in India. More than 45% of households among the ST group are poor while the corresponding number is only 15% among the non-backward households classified under the ‘others' category, Data suggests that the ¾th of the rural poor belong to the category of landless labourers and marginal farmers. The incidence of poverty is highest among agricultural labour households (59%), labour households (38.5%) and among Marginal Farmers (30%). Factors responsible for poverty are Unemployment or underemployment among rural labourers. It has been established that incidence of unemployment is highest among the casual labourers. Even when they are employed, their weak bargaining power results in low wages being paid to them. The market forces are so strong that the minimum wage legislation is observed more in breach than in compliance.

Another cause of rural poverty is low asset base of the poor. According to data – worst 10 percent of rural population owns virtually nothing and bottom 30 percent just own 2 percent of total assets. It may also be noted that large number of rural poor remain in poverty not only because they have very few assets, but also because most of these assets are in the form of durable consumer goods, rather than assets such as land, implements, livestock etc. which can increase their productive capacity.

Another major cause is low educational attainment of the poor. These educational differentials are one of the main factors for relatively lower level of income among poor.

Another popular myth for poverty is rapid increase in population. Population growth puts pressure on the land base and as a consequence the real per capita income falls. Semi-feudal agrarian relation is another important cause of poverty. Land reforms initiated after independence has not brought about substantial changes in agrarian relations.