States That Implemented Social Schemes Well Were Better at Reducing Poverty

Multidimensional poverty levels in India fell from 55% in 2005-06 to 27.5% in 2015-16. States like Himachal Pradesh, Tamil Nadu and Kerala that implemented social sector schemes better reduced poverty levels faster, while Gujarat underperformed.

New Delhi: In 2005-06, 55% of India’s population suffered from multidimensional poverty – a poverty index that draws from ten deprivation indicators related to health, education and living standards. That figure came down to 27.5% in 2015-16, according to a recent report on the Global Multidimensional Poverty Index (MPI) released by the Oxford Poverty and Human Development Initiative and United Nations Development Programme (UNDP). “Thus, within ten years, the number of poor people in India fell by more than 271 million – a truly massive gain,” the report read.

India’s MPI stood at 0.121, 53rd in a list of 105 developing countries which were studied. African nations Niger, South Sudan, Chad, Ethiopia, Somalia have fared the worst on the MPI with more than 60% of their populations categorised as ‘severe poor’.

The MPI value was highest for Niger at 0.59 with more than 90% of its population being multidimensionally poor. A person is considered multidimensionally poor if she is from a household that is deprived in 30% of the ten deprivation indicators that are included in the index.

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Data for India was taken from the National Family Household Surveys 2005-06 and 2015-16. The intensity of multi-dimensional poverty, a measure that shows the average proportion of weighted indicators in which people are deprived, saw a less substantial decline than the overall MPI. It fell from 51% in 2005-06 to 44% in 2015-16. 

Multidimensional poverty in Indian states

Multidimensional poverty saw a sharp decline in Kerala where the proportion of the population living under multidimensional poverty fell from 13% to 1%, with the intensity of poverty coming down from 39% to 37%.

State   Population living in multidimensional poverty in 2005-06 (%) Population living in multidimensional poverty in 2015-16 (%)
Bihar 77 52
Jharkhand 75 46
Madhya Pradesh 68 41
Uttar Pradesh 69 40
Assam 61 36
Chhattisgarh 70 36
Odisha 64 36
Rajasthan 62 32
West Bengal 57 26
Gujarat 39 21
Karnataka 48 17
Maharashtra 39 17
Uttarakhand 39 17
Andhra Pradesh 50 16
Jammu & Kashmir 41 15
Haryana 39 11
Himachal Pradesh 31 8
Tamil Nadu 37 7
Punjab 24 6
Kerala 13 1
INDIA 55 27.5

Source: Global MPI Report

In Bihar, 52% of the population continues to be multi-dimensionally poor, with 22% of its population living under severe poverty, where the intensity of poverty is higher than 50%.

Alirajpur, a district located on the western border of Madhya Pradesh, is the most deprived district in India with 76% of its population under multidimensional poverty.

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The rate of reduction of poverty has been the highest in states that had relatively lower poverty levels to begin with. Kerala, well-known as an outperformer compared to other Indian states when it comes to human development indicators, performed the best. The annual rate of decline of poverty in Kerala between 2005-06 and 2015-16 was 22%.

State Relative annual decline in poverty (%)
Kerala 22.18
Sikkim 18.48
Tamil Nadu 14.85
Punjab 12.90
Himachal Pradesh 12.47
Goa 12.12
Haryana 11.81
Mizoram 10.95
Andhra Pradesh 10.84
Delhi 10.42
Karnataka 9.83
Tripura 9.49
Jammu and Kashmir 9.40
Arunachal Pradesh 8.73
Nagaland 8.53
Maharashtra 8.18
Uttarakhand 7.84
West Bengal 7.61
Manipur 7.50
Rajasthan 6.46
Chhattisgarh 6.34
Meghalaya 5.98
Gujarat 5.72
Odisha 5.64
Uttar Pradesh 5.21
Assam 5.13
Madhya Pradesh 4.98
Jharkhand 4.76
Bihar 3.83

States that had higher populations living in poverty in 2005-06 also performed the worst in reducing poverty levels. Bihar saw an annual rate of decline of 3.8%.

Jean Dreze, noted development economist who has over several decades studied various facets of poverty in India, argues that higher rates of poverty reduction in states like Kerala, Himachal Pradesh and Tamil Nadu are due to better implementation of social schemes in these states.

“These states have implemented social sector schemes more effectively. Consequently, we have seen that they have fared better on different indicators,” Dreze told The Wire.

“We have seen that effective implementation of schemes like MGNREGA, mid-day meal scheme and public distribution system has a positive impact on reducing deprivation,” Dreze added.

Gujarat underperforms

Leading up to the 2014 Lok Sabha elections, Narendra Modi projected himself as having changed the fortunes of Gujarat during his tenure as chief minister. In particular, he argued that the Gujarat economy had performed better than other states.

However, according to the global MPI report ­– which studies a period during most of which Modi was the chief minister – Gujarat has performed worse than Rajasthan and Chhattisgarh – two among India’s ‘Bimaru’ states ­– in terms of the rate at which poverty has declined. The annual rate of decline was 5.72% in Gujarat, as against 6.34% in Chhattisgarh and 6.46% in Rajasthan.

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In 2005-06, four states ­– Haryana, Maharashtra, Uttarakhand and Gujarat – had 39% of its populations under multidimensional poverty. Among these states, Gujarat has performed the worst in reducing poverty levels. Twenty-one percent of the population was under multidimensional poverty in 2015-16, compared to 17% in Uttarakhand and Maharashtra and 11% in Haryana.

“If we look at Gujarat as compared to other states which were at a similar level, it has not performed that well. It comes around the middle in most indicators,” said Dreze.