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This paper offers a comprehensive analysis of poverty in India. It shows that regardless of which of the two official poverty lines we use, we see a steady decline in poverty in all states and for all social and religious groups. Accelerated growth between fiscal years 2004-2005 and 2009-2010 also led to an accelerated decline in poverty rates. Moreover, the decline in poverty rates during these years has been sharper for the socially disadvantaged groups relative to upper caste groups so that we now observe a narrowing of the gap in the poverty rates between the two sets of social groups. The paper also provides a discussion of the recent controversies in India regarding the choice of poverty lines.
Keywords: poverty, caste, religious groups, economic growth, India
JEL codes: D30,132
I. Introduction
This paper provides comprehensive up-to-date estimates of poverty by social and religious groups in the rural and urban areas of the largest 17 states in India. The specific measure of poverty reported in the paper is the poverty rate or headcount ratio (HCR), which is the proportion of the population with expenditure or income below a pre-specified level referred to as the poverty line. In the context of most developing countries, the poverty line usually relates to a pre-specified basket of goods presumed to be necessary for above-subsistence existence.
In so far as prices vary across states and between rural and urban regions within the same state, the poverty line also varies in nominal rupees across states and between urban and rural regions within the same state.1 Similarly, since prices rise over time due to inflation, the poverty line in nominal rupees in a given location is also adjusted upwards over time.
The original official poverty estimates in India, provided by the Planning Commission, were based on the Lakdawala poverty lines, so named after Professor D. T. Lakdawala who headed a 1993 expert group that recommended these lines. Recommendations of a 2009 expert committee headed by Professor Suresh Tendulkar led to an upward adjustment in the rural poverty line relative to its Lakdawala counterpart. Therefore, while the official estimates for earlier years were based on the lines and methodology recommended by the expert group headed by Lakdawala, those for more recent years...