Poverty and Prosperity in India: A Story of 28 States

Date of Release: June 17th, 2014

Published at: India Spend

“The Government’s work should be to listen to the poor, to work for the poor, and live for (the poor)”, said our Prime Minister in his first speech in the 16th Lok Sabha. This was just a day after the President said in his address at the joint session of Parliament that “my government will not be satisfied with mere ‘poverty alleviation’ and commits itself to the goal of poverty elimination’ “.

The mandate for Mr Modi is being seen above all, as a mandate for development –   development which is inclusive and which leads to empowerment of the poor and downtrodden.

So, how has India done on poverty alleviation in the last few years? Are there regional differences in the pattern of poverty alleviation? Is rapid economic growth a prerequisite for poverty alleviation? Which States in India have been most successful at bringing people out of poverty? Swaniti Initative, a development consulting firm which works with legislators, has tried to answer some of these questions.  Swaniti also tracks other metrics related to development and governance including health, education, livelihoods, women’s security and social inclusion on its online user-friendly data platform Jigyasa.

Their analysis on poverty and growth throws up results which are interesting and thought provoking.  Some of the highlights are presented below.

Good performance overall

Between 2004-05 and 2011-12, most States did well at poverty alleviation. 19 out of the 28 States managed a reduction in poverty by 10 percentage points or more. In other words, 19 States managed to pull out more than 10% of their total population out of poverty. 12 of them achieved a reduction greater than 15 percentage points.

The Curious Case of the North-East

While the rest of the country was seeing a reduction in poverty, some of the North-East States actually saw a rise in poverty in this period. This is particularly surprising, as most of these States had a significant rise in per-capita incomes, as shown below (Per-capita NDP for both years is at 2004-05 prices).

 

Tripura is a notable exception which bucked this trend. It saw a massive increase in per-capita NDP in this period, and a sharp jump in poverty rates. From having the highest burden of poverty in 2004-05, it had the 2nd lowest poverty rate in 2011-12 among the 7 North-East States.

Rich States have done better at poverty alleviation than in the past

Is there a correlation between economic growth and poverty reduction?  The table below analyses the performance of the 7 richest States in terms of per-capita NDP in 2004-05.

  • Some of these rich States like Goa, Gujarat and Maharashtra had very high poverty rates.
  • Others like Punjab, Haryana, Kerala and Himachal Pradesh had high per capita incomes as well as low poverty rates in 2004-05.

2004-05

2011-12

State

Rank on per-capita NDP

poverty HCR (%)

rank on poverty reduction

% growth rate per- capita (CAGR) between 2004-05 &

2011-12

Rank on per-capita NDP

poverty HCR (%)

rank on poverty reduction

Goa

1

25

9

5.6%

1

5.1

1

Haryana

2

24.1

8

7.5%

3

11.2

8

Maharashtra

3

38.1

21

9.7%

2

17.4

15

Himachal Pradesh

4

22.9

7

5.9%

8

8.1

3

Punjab

5

20.9

6

5.0%

10

8.3

5

Gujarat

6

31.8

14

8.7%

4

16.6

14

Kerala

7

19.7

5

7.7%

7

7.1

2