NEW DELHI: Data released by the Planning Commission on Monday showed that poverty had significantly declined between 2004-05 and 2009-10. The catch is that this decline is based on a poverty line that is even lower than the earlier Rs 32-per-day mark that had triggered an outrage when the government submitted it to the Supreme Court.
The new estimates are based on a poverty line that averages Rs 672.8 per month (Rs 22.43 per day) in rural areas and Rs 859.6 per month (Rs 28.65 per day) in urban areas for 2009-10. In a state like Delhi, the urban poverty line translates to Rs 34.67 per person per day.
In the Supreme Court, the government had submitted that the updated poverty line was likely to be Rs 26 per day in rural areas and Rs 32 per day in the towns in June 2011.
As things stand, a host of centrally sponsored social security schemes for the poor exclude those above these poverty lines from availing of the benefits under the schemes.
By the lowered benchmarks, poverty across the country declined by 7.3 percentage points from 37.2% in 2004-05 to 29.8% in 2009-10. In absolute terms, there were 35.5 crore poor people in 2009-10 against 40.7 crore five years earlier.
MGNREGS, higher wages help reduce poverty level
Officials said the sharp decline in poverty between 2004-05 and 2009-10-rural poverty going down by 8 percentage points from 41.8% to 33.8% and urban poverty by 4.8 percentage points from 25.7% to 20.9% – had been aided by high growth, hike in wages and implementation of key schemes like the MGNREGS.
“It is largely due to better agriculture growth and improvement in livelihood,” a senior plan panel official said. According to Crisil, the sharp increase in wages which was near simultaneous across income groups in urban and rural India since 2004-05 boosted consumption demand. Urban and rural wages rose by 12.0-14.0 % over 2004-05 to 2009-10, compared to an increase of 7% in the previous five-year period. Increases in income were especially sharp after 2007-08.
However, the poverty picture is extremely patchy with some states showing sharp reductions in the proportion of the BPL population while many others saw little or no change and five states in the north-east saw a larger percentage of their populations slipping below the mark. The poverty ratio in Himachal, MP, Maharashtra, Orissa, Sikkim, TN and Uttarakhand has declined by 10 percentage points or more. But in Assam, Meghalaya, Manipur, Mizoram and Nagaland, poverty ratios in 2009-10 are higher than in ’04-05. The data showed Bihar, Chhattisgarh and UP have shown only marginal decline in poverty ratio, particularly in rural areas. Given the size of UP and Bihar and the fact the base is already low, this is a worrying sign.
Orissa, which had the highest poverty headcount ratio (57%) in 2004-5, has brought the proportion of poor down to 37% as per the new benchmark. Bihar (53.5%), Chhattisgarh (48.7%) and Manipur (47.1%) now have the three worst poverty headcount ratios. Applying the Tendulkar methodology, on which these figures are based, to 1993-94 data shows that Himachal has been the fastest at reducing poverty, bringing the proportion of people under the poverty line to 9.5%, less than a third of its 1993-4 numbers.
In rural areas, STs showed the highest level of poverty (47.4%), followed by SCs (42.3%), and OBCs (31.9%), against 33.8% for all classes. Among religious groups, Sikhs have the lowest poverty in rural areas (11.9%) while in urban areas, Christians have the lowest proportion (12.9%) of poor.