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Poverty Dynamics in Rural Uttar Pradesh

This paper is based on a survey that was conducted in 2004-05 in the poorest pockets of Uttar Pradesh by using the same methodology as used in the below the poverty line census 1998-99. In sample areas, poverty had declined by 6.56 percentage points over the period of six years. However, such a reduction was not unidirectional; rather it was the net result of two opposite movements. While some non-poor households slid into poverty, some previously-poor households simultaneously got rid of it. Causal analysis of poverty dynamics reveals that the most important reasons for these opposite movements are largely different from each other. Thus, the need for a difference between poverty avoidance and poverty reduction programmes and policies is emphasised. The paper also recommends that the government should ensure complete enumeration of all households and construction of a household-specific index of income/expenditure status for prioritisation of interventions and better targeting of poor and not-so-poor households.

Poverty Dynamics in Rural Uttar Pradesh

This paper is based on a survey that was conducted in 2004-05 in the poorest pockets of Uttar Pradesh by using the same methodology as used in the below the poverty line census 1998-99. In sample areas, poverty had declined by 6.56 percentage points over the period of six years. However, such a reduction was not unidirectional; rather it was the net result of two opposite movements. While some non-poor households slid into poverty, some previously-poor households simultaneously got rid of it. Causal analysis of poverty dynamics reveals that the most important reasons for these opposite movements are largely different from each other. Thus, the need for a difference between poverty avoidance and poverty reduction programmes and policies is emphasised. The paper also recommends that the government should ensure complete enumeration of all households and construction of a household-specific index of income/expenditure status for prioritisation of interventions and better targeting of poor and not-so-poor households.


pread over a geographical area of 241 thousand square kilometres, Uttar Pradesh (UP) is home to about 17 crore people who live in 98 thousand villages and towns. The state accounts for about 16 per cent of the total population of the country. At the same time, UP is fortunate to have abundant alluvial soils and plentiful ground and surface water resources. With a net cultivated area of about 168 lakh hectares, the state is the largest producer of many agricultural products in the country. UP contributes 20 per cent of India’s total production of foodgrains, 5 per cent of oilseeds, 15 per cent of vegetables, 42 per cent of potatoes, and 8 per cent of fruits. “Rich in potential – in human and natural assets – Uttar Pradesh once appeared to be a pacesetter for the country’s economic and social development. Western region’s tradition of raising wheat and sugarcane made it a strong platform for the green revolution in the 1960s and 1970s, which helped UP depart from previously low levels of agricultural growth. In the next decade, the eastern and central regions of the state registered strong advances, spurred by purposeful investments in research, extension, irrigation and marketing infrastructure. As a result, in the 1970s, economic growth in most sectors in Uttar Pradesh was higher than that in the rest of India (Table 1). Since then, however, economic growth has started to fall behind that of India, particularly in the 1990s, as the state failed to seize the opportunities created by the liberalisation of the economy started in 1991” [World Bank 2002]. Though the state recorded poverty reduction comparable to the national decline in the 1990s, it continues to be one of the poorest states in the country. According to the 55th round of National Sample Survey 1999-2000, 31.2 per cent to 33.7 per cent of the population of rural areas lived below the poverty line (Table 2). According to below the poverty line (BPL) Census1998-99 also, 36.94 per cent of rural families of Uttar Pradesh lived below the poverty line. At the same time, there is a huge inter-district variation in poverty incidence. The percentage of rural BPL families is higher than the state average in 34 out of 70 districts of the state (Table 3). The proportion of BPL rural families is as high as 55-56 per cent in Bahraich, Hardoi, Kheri, Sonbhadra and Unnao districts and as low as 6-7 per cent in Ghaziabad, Meerut and Baghpat districts.

Uttar Pradesh has to regain the lost momentum of the 1970s in order to reduce poverty especially in rural areas, as the rural poor account for about 78 per cent of total poor in the state. Reduction, and ultimately the eradication, of poverty from UP appear essential not only for the state but also for the country as a whole. The government of Uttar Pradesh approach has been a two-pronged strategy for poverty reduction in rural areas. On the one hand, constant efforts are being made for holistic development through public investment in various infrastructure facilities and promotion of private participation and, on the other, direct poverty alleviation programmes are being implemented for the benefit of the poor. In the first two decades of the planning era, rural development programmes envisaged an indirect impact on poverty alleviation. The implicit assumption was that the rise in income caused by an increase in agricultural production would automatically benefit the agriculture-based rural community and the poor. But the increase in agricultural production mainly benefited the resource-rich farmers, and poor farmers could get relatively few benefits. As a result, the poverty situation further worsened, which drew the attention of the policymakers. Hence, special schemes were launched in the 1970s to hit poverty directly. Since then, multiple poverty alleviation programmes came into existence from time to time. These programmes were continuously monitored to evaluate their effectiveness and necessary modifications were made as and when required. At the beginning of the 1990s, it was realised that a multiplicity of programmes was coming in the way of an effective and efficient attack on the poverty. Such realisation led to comprehensive rationalisation of various anti-poverty programmes. After rationalisation and restructuring of programmes there emerged two main poverty alleviation programmes, i e, the Swarnajayanti Gram Swarozgar Yojana (the SGSY which is a self-employment programme) and Sampoorna Gramin Rozgar Yojana (SGRY, a wage employment programme), in addition to the Indira Awaas Yojana. Huge sums are being spent on these programmes for poverty reduction in rural areas. (Since 2005, the SGRY has, of course, been replaced by the National Rural Employment Guarantee Scheme.)

What has happened to poverty since 1998-99 or 1999-2000 is not much known. A study was conducted in 2004-05 to assess

Economic and Political Weekly April 21, 2007 the current levels of poverty in the poorest rural areas of the state. Key objectives of the study included: (i) assessment of poverty dynamics over the period from 1998-99 to 2004-05 in the poorest pockets; (ii) diagnosis of poverty dynamics; and (iii) suggesting suitable measures for a more effective attack on the rural poverty. The current paper is based on this empirical study that was conducted in the four poorest districts of the respective economic zones of Uttar Pradesh.

Table 1: Growth Trends in Uttar Pradesh and India

Particulars 1960-70 1971-80 1981-85 1986-90 1991-93 1993-98

Gross domestic product Uttar Pradesh 2.5 3.0 4.0 6.0 1.9 4.0 India 3.7 3.1 5.0 6.3 4.1 6.7

Ag and allied sectors Uttar Pradesh 1.6 1.9 2.1 3.7 1.7 1.8 India 2.3 1.5 3.1 3.9 2.4 3.4

Industry Uttar Pradesh 6.1 5.4 7.4 8.6 1.4 4.8 India 5.4 4.0 6.4 8.2 3.0 6.6

Manufacturing Uttar Pradesh 5.1 5.0 9.8 9.2 1.6 3.4 India 5.2 4.0 7.0 8.2 2.9 7.5

Services, etc Uttar Pradesh 3.0 3.6 5.1 7.4 2.5 5.5 India 4.6 4.3 6.1 7.0 6.0 8.7

Source: World Bank (2002).

Table 2: Trends in Poverty: Uttar Pradesh and All-India

(Percentage of BPL Population)

Year NSS Uttar Pradesh India Round Urban Rural Overall Urban Rural Overall

1983 38th 49.8 46.4 47.1 40.8 45.7 44.5 1987-88 43rd 43.0 41.1 41.5 38.2 39.1 38.9 1993-94 50th 35.4 42.3 40.9 32.4 37.3 36.0 1999-00 Official 55th 30.9 31.2 31.1 23.6 27.1 26.1 Corrected 55th 30.4 33.7 33.0 24.7 30.2 28.6

Source: World Bank (2002).

I Methodology

Since the main objective of this study was to assess and compare the present level of poverty with the situation in 1998-99, the study adopted the same methodology of poverty assessment as used in the BPL census 1998-99 in order to ensure full comparability of the study findings with the results of the 1998-99 census.

Samples were selected through multistage purposive sampling. The purpose was to select the poorest pockets in the sample. The BPL census of 1998-99 formed the basis for identifying the poorest districts, blocks and villages. The poorest district of the each economic region of UP was purposively selected as sample district. Accordingly, Bahraich district from the eastern region, Hardoi from the central, Auraiya from the western and Chitrakoot from the southern (Bundelkhand) regions were selected as sample districts. The poorest blocks of the respective sample districts were selected as sample blocks. From each sample block, five poorest villages were selected as sample villages. From each of the sample village, 15 BPL and 15 above the poverty line (APL) households were randomly selected. Thus, the study is based on 600 households hailing from 20 villages, five each belonging to the four poorest blocks of the four poorest districts of the four economic regions of UP.

The study was completed in two rounds. In the first round, the 1998-99 poverty status (BPL or APL) of sample households was obtained from the records available at the gram panchayat level. The 2004-05 status was directly assessed with the help of the same schedule which was used in the BPL census. The current poverty status of sample households is based on their monthly per capita consumption expenditure as compared with the poverty line (Rs 373 at 2004-05 prices). The current poverty line has been worked out by deflating the Planning Commission’s poverty line of Rs 336.88 at 1999-2000 prices (for rural Uttar Pradesh) by the Consumer Price Index for Agricultural Labourers.

Table 3: Districtwise Percentage of BPL Families in Rural Uttar Pradesh (1998-99)

SN District Per Cent SN District Per Cent SN District Per Cent
1 Agra 19.31 25 Farrukhabad 31.73 49 Mahoba 27.54
2 Aligarh 9.48 26 Fatehpur 15.48 50 Mainpuri 40.77
3 Allahabad 34.25 27 Firozabad 33.23 51 Mathura 15.09
4 Ambedkar Nagar 50.01 28 G B Nagar 15.21 52 Mau 46.34
5 Auraiya 47.96 29 Ghaziabad 6.91 53 Meerut 6.87
6 Azamgarh 42.80 30 Ghazipur 36.24 54 Mirzapur 40.62
7 Badaun 33.05 31 Gonda 48.00 55 Moradabad 18.42
8 Bagpat 6.33 32 Gorakhpur 34.30 56 Muzaffarnagar 10.76
9 Bahraich 56.91 33 Hamirpur 42.64 57 Pilibhit 40.11
10 Balarampur 29.96 34 Hardoi 56.35 58 Pratapgarh 50.47
11 Ballia 39.85 35 Hathras 17.79 59 Rae Bareli 52.43
12 Banda 36.43 36 J B F Nagar 19.55 60 Rampur 27.52
13 Barabanki 46.52 37 Jalaun 36.83 61 Saharanpur 22.23
14 Bareilly 37.26 38 Jaunpur 34.62 62 Sant Kabir Nagar 49.75
15 Basti 44.85 39 Jhansi 30.72 63 Shahjahanpur 45.49
16 Bhadohi 26.92 40 Kannauj 27.44 64 Shravasti 53.33
17 Bijnor 27.96 41 Kanpur Dehat 41.53 65 Siddharthnagar 37.68
18 Bulandshahar 10.08 42 Kanpur Nagar 39.05 66 Sitapur 49.53
19 Chandauli 34.70 43 Kaushambi 53.55 67 Sonbhadra 54.66
20 Chitrakoot 43.41 44 Kheri 55.96 68 Sultanpur 46.21
21 Deoria 33.56 4 5 Kushinagar 44.29 69 Unnao 54.63
22 Etah 23.57 46 Lalitpur 33.24 70 Varanasi 32.83
23 Etawah 46.24 47 Lucknow 45.61 Uttar Pradesh 36.94
24 Faizabad 47.75 48 Maharajganj 28.61
Source: Department of Rural Development, Uttar Pradesh, ‘BPL Census 1998-99’.
1454 Economic and Political Weekly April 21, 2007

On preliminary compilation of survey results, mixed trends were observed in the sample villages. While some households were above the poverty line in 1998-99 but fell below later, some other households were classified as poor in 1998-99 but later escaped from poverty. Similarly, there were some households which retained their BPL or APL status over the same period. After completion of the first round, sample households were grouped into four categories on the basis of their respective poverty status in 2004-05 vis-à-vis 1998-99. These categories are: (i) “Remained BPL” households which were poor in 199899 and remained so in 2004-05; (ii) “Remained APL” households which were non-poor and remained so in 2004-05; (iii) “Became BPL” households which were non-poor in 1998-99 but became poor in 2004-05; and (iv) “Became APL” households which were poor in 1998-99 but became non-poor in 2004-05. In the second round, 50 per cent of the households of the last two categories were revisited to ascertain the reasons for household mobility over the reference period. In addition, focus group discussions were held to identify the factors responsible for chronic poverty prevalent among some households.

It should be noted that all the sample villages are the poorest villages of their respective blocks in the respective districts. The sample districts in turn are the poorest districts of the respective economic regions of the state. Thus, findings relate to the poorest pockets of the state and not necessarily to the district, region and the state as a whole.

II Results and Discussion

Out of the total sample of 600 households, the number of poor households was 319 (52.30 per cent) in the year 1998-99, which came down to 279 (45.74 per cent) in the year 2004-05. Out of the total sample households, 236 households (38.69 per cent) remained BPL, 43 (7.05 per cent) became BPL, 83 (13.61 per cent) escaped poverty, and the remaining 248 (40.66 per cent) households remained APL over the period from 1998-99 to 200405 (Table 4). Thus, the poverty ratio declined by 6.56 percentage points on point-to-point basis. However, such reduction was the net result of two opposite movements. On one hand, 13.61 per cent of the sample households who were living below the poverty line in 1998-99 were able to raise their income and consumption and climb out of poverty. On the other, 7.05 per cent of the households descended into poverty due to various reasons. Thus, poverty reduction is observed to be the net result of downward and upward mobility of households simultaneously. If the descent into poverty had been checked, poverty reduction would have been by 13.61 percentage points.

Bidirectional mobility has been observed in all the four regions of the state. Across the four regions, poverty reduction was the highest in the western region due to the greatest upward mobility in spite of the highest downward mobility. The central region recorded the lowest reduction in the poverty ratio. As compared to the eastern region, the south recorded higher net reduction in poverty, due to a lower extent of downward mobility in spite of lower upward mobility.

Across the social groups, the prevalence of poverty was the highest among scheduled caste (SC) households and the lowest among general caste (GC) households in both the periods. However, inter-group differences in poverty have narrowed down over the period due to larger poverty reduction in case of SC and BC households. The SC households have recorded the highest net reduction in poverty, due to the highest percentage of households escaping the poverty in spite of the highest downward mobility. Many BC households have also escaped poverty, but the net reduction in poverty was lower due to a simultaneous fall of some households into poverty. The bidirectional household mobility was observed in case of SC and BC households, but not in the case of GC households (Table 5). It implies that no non-poor GC household was subsequently trapped in poverty.

The results also indicate that about 39 per cent of the sample households are chronically poor – remaining poor for a long time. People in chronic poverty are those who have benefited the least from economic growth. Chronic poverty exists in all regions, and the chronically poor live in many different situations [CPRC 2005]. Across the regions, chronic poverty is the highest in the central region and the lowest in the western. Between the eastern and southern regions it is higher in the former. Such regional differences are attributable to differences in resource endowments and historical growth records. Across social groups, chronic poverty is observed to be the highest among SC households and the lowest among GCs. This variation is again historical. Actually class and caste coincide in Indian society. People of lower economic class are generally those who are also at the lowest rungs of the ladder in the social hierarchy.

Table 4: Poverty Trends in Poorest Pockets of Uttar Pradesh

Region Total Percentage of Households Which Poor in 1998-99 Poor in 2004-05 Net Reduction in
Households Remained Poor Escaped Poverty Became Poor Remained (Per Cent) (Per Cent) Poverty (Decline in
Non-poor Percentage Points)

Eastern 150 45.63 13.13 6.88 34.38 58.75 52.50 6.25 Western 150 28.67 20.00 10.67 40.67 48.67 39.33 9.34 Central 150 46.67 10.00 6.00 37.33 56.67 52.67 4.00 Southern 150 33.33 11.33 4.67 50.67 44.67 38.00 6.67 Overall 600 38.69 13.61 7.05 40.66 52.30 45.74 6.56

Table 5: Poverty Trends by Social Group
Social Group Total Percentage of Households Which Poor in 1998-99 Poor in 2004-05 Net Reduction
Households Remained Poor Escaped Poverty Became Poor Remained Non-poor (Per Cent) (Per Cent) in Poverty(Per Cent)

GC 75 10.67 2.67 0.00 86.67 13.33 10.67 2.66 BC 241 34.85 12.03 6.64 46.67 46.89 41.49 5.40 SC 294 48.98 17.69 9.18 24.15 66.67 58.16 8.51

Economic and Political Weekly April 21, 2007

Causal Analysis of Poverty Dynamics

“The net change in poverty over any period of time is a resultant of two separate trends: some previously poor people escape from poverty, and some other non-poor people become poor at the same time. The larger the number of people in the first set, the more pronounced is the reduction in poverty overall, but the larger the number of people in the second set, the lower is the overall achievement” [Krishna 2003]. Thus, poverty dynamics encompasses change in poverty status between the points of time or over a period of time. Such dynamics includes four possible situations, namely, (i) remaining poor, (ii) remaining non-poor,

(iii) descent into poverty, and (iv) escaping from poverty. The first two situations may not require explicit explanation as far as dynamics is concerned, whereas the last two categories need suitable causation for better understanding of poverty dynamics.

The study attempted to get the explanation for household mobility into and out of poverty from the concerned households themselves. Relevant households were interviewed to ascertain the factors that led to a change in their poverty status. Thus, causes of escape and descent presented here are self-reported factors as per the reckoning of the concerned households themselves. Downward mobility: Various reported reasons which were responsible for some households’ descent into poverty include unbearable expenditure on illness, beyond-the-capacity expenditure on marriages and other social ceremonies, loss of job, downfall of business and other reasons including successive crop failure and migration of the key worker of the household (Table 6).

Large expenditure on sickness of family members and marriages and other social ceremonies ate up victim households’ entire savings and borrowing became the chief coping strategy. In absence of institutional credit, they borrowed from informal sources such as moneylenders, rich farmers, etc, at an exorbitant interest rate. For years, they were required to apportion a big part of their income for debt repayment. As a result, with the given level of income, their net disposable income came down considerably. Moreover, poor health continued for sometime leaving a negative impact on their income, especially in the case of casual labourers. Consequently, their consumption level slid below the poverty line. Rural households, poor or non-poor in the strict sense of the poverty line, have generally a high average propensity to consume and hence very small savings. Income of majority of rural households, especially poor ones, is just or little over their consumption requirements. As a result, they are not able to accumulate saving for future large expenditures. Thus, borrowing is the only way to finance heavy expenditure. Periodical repayment of debt further reduces their net disposal income. In the absence of prompt and adequate help from institutional sources they turn to non-institutional (private) sources. Private debt is a costly proposition for poor households. A single large debt is sufficient to push down majority of households into poverty and leave them there for years unless some new and good source of income becomes available to such households. Thus, unbearable expenditure on healthcare and large expenditure on social ceremonies are the two principal reasons for downward mobility of households.

Some other reasons also contribute to the fall into poverty. In the case of 9 per cent of households, a loss of job caused such decline. Some other households (9 per cent) fell into poverty because their low-scale business, which was the main source of income, declined due to low profitability and capital exhaustion.

In a few cases, successive crop failure and migration of the main working family member also contributed to their plight. Upward mobility: Various factors were reported to have become the ladders of escape from poverty, including finding a private job through migration to cities/towns, starting of petty trade/ business, diversification of farming by inclusion of animal husbandry and dairying, casual work in the informal sector, shift from traditional to high value crops, and government job (Table 7).

Migration to a town was cited as the most important ladder through which some hitherto poor households climbed out of the well of poverty. The second and third most important factors of escape from poverty were establishment of new trade/business establishments and the start of animal husbandry and dairying activities, respectively. Some families started petty business such as general stores, bicycle repairing, micro floor mill, etc, and were able to raise their incomes. Such households also received support for these self-employment initiatives under government schemes. The study found that very few households benefited from government jobs. It may also be noted that wage employment programmes of the government were not the escape route out of poverty for any household. However, respondent households realised the role of such programmes in raising their income in lean seasons.

Causal Analysis of Chronic Poverty

As mentioned earlier, about 39 per cent of the sample households are trapped in chronic poverty – remaining under the poverty line. Before analysing the reasons for chronic poverty facing such households it would be worthwhile to review their socio-economic characteristics.

Chronically, poor households have an average family size of

5.2 persons with a sex ratio of 760, which is much below the state and national average. About 36 per cent of the population in these households are below 15 years and 3 per cent have crossed the working age of 60 years. Thus, only 61 per cent of them may be considered as physically fit to work provided they get an opportunity to do so. About 60 per cent are either illiterates or mandatory illiterates (children below seven years). The remaining 40 per cent are literates but two-thirds of them have attained mere functional literacy, i e, up to primary level. Only 5 per cent are

Table 6: Self-reported Reasons for Falling into Poverty

Reason Reporting Households (Per Cent)

Unavoidable and heavy expenditure on illness 74 Beyond-the-capacity expenditure on marriage 67 Loss of job 9 Decline of business and trading activity 9 Other reasons (successive crop failure, migration of earning member) 7

Table 7: Self-reported Avenues of Escape from Poverty

Reason Reporting Households (Per Cent)

Informal sector job in town/city 36 Start of petty business 24 Start of animal husbandry and dairying 23 Casual work in informal sector 16 Enrichment of cropping pattern through introduction of

high value crops 10 Government job 5

Economic and Political Weekly April 21, 2007

educated (high school or above). The school dropout ratio is observed to be about 14 per cent in the age group 7-14 years. Little less than 10 per cent of the households belong to the most disadvantaged category as they are either woman-headed or assignees of surplus land. In terms of the share in total household income, labour is the main occupation of the majority (57 per cent) of such households. In second place is self-employment in agriculture (17 per cent) and non-agriculture enterprises (14 per cent). Artisan/masonry works contribute the major share in income of 5 per cent poor households. In case of the remaining 6 per cent of the households, private sector service is the main occupation.

About one-fourth of the chronically poor households are landless and the remaining three-fourths households possess on an average only 0.35 hectare. More than 30 per cent of the households do not possess even a single livestock. Two-thirds of the poor households live in kutcha houses and the remaining onethird households sleep in semi-pucca houses, and only 4 per cent poor have access to suitable toilet facility.

Only 45 per cent of potential labour power (in terms of persondays/year) of these households is being utilised for economic activities and the rest remains idle (Potential labour power of a household is worked out by multiplying the number of members willing/availing for work by 273 days/year). About 80 per cent of utilised labour power is in agriculture and wage earning and the remaining one-fifth goes to artisan works, trade/business and private service. At least one family member is a migrant worker in the case of 40 per cent of households. Most of the migrant workers move out of village vicinity in search of employment. Inadequate local employment opportunity is observed to be the key reason for labour migration.

Average per capita income of the chronically poor households is estimated to be Rs 2,950/year at current prices and average per capita consumption expenditure is Rs 2,776 per year. Major share (71 per cent) of consumption expenditure goes to food items. About 40 per cent of households reported that their members did not get even two-square meals during a part of the year.

The socio-economic features of the chronically poor households are themselves an adequate explanation for their prevailing condition. However, the reasons for chronic poverty were also analysed with the help of focus group discussions. Three factors were identified as the key reasons for chronic poverty. These are: the small size of landholding, low capital base and unemployment or underemployment. Small farmers give top priority to production of staple food such as rice, wheat and other cereals. Given the small landholding, a very small area is left for high value crops even if they are willing to diversify their cropping pattern. Such a tendency is attributed to certain social and traditional mindsets. Farmers opine that it is a matter of social disgrace if one is required to purchase even staple food from the market, whereas they do not hesitate to buy pulses, oil/oilseeds and fruits and vegetables. Due to poor economic conditions they also tend to use agricultural inputs of low quality and in lesser quantity. As a result, productivity is low. The small size of landholding accompanied by the traditional cropping pattern and less productive technology leads to low agricultural income. Historical trends of low agricultural income leaves these households with virtually no capital for investment either for improvement in agriculture or for starting some trade and business activities. Such households are also characterised by widespread unemployment and underemployment. This situation is attributed to poor skills due to poor educational attainment. Most of the workers from these households are engaged in low-paid manual works. Actually, these households are trapped in vicious circle of poverty. Poverty is both cause and effect in their cases. Residents of these households are poor because they do not find remunerative jobs. They do not find remunerative jobs because they do not have required skills due to low educational and technical training. They do not get adequate education and training because they belong to poor families who cannot afford the cost as they are poor. If these households are to be rescued from poverty in one go, which is quite a difficult task, there will be need for upfront intervention. Creating job opportunities for them seems the most effective solution. But this will not be an easy task for the government and economy as a whole to generate adequate employment opportunities for all chronically poor people overnight. Thus, the best strategy to meet the challenge would be to make the growth as much employment-oriented as possible. Simultaneously, self-employment opportunities need to be promoted, as is being done under Swarnajayanti Gramin Swarozgar Yojana, through subsidy and credit support.

III Concluding Observations and Some Submissions

Our findings clearly reveal that over the reference period of six years the overall incidence of poverty has declined in the study areas, which represent the poorest pockets of the state. The decline was largest in the western region and the smallest in the central region of the state. Across social groups, poverty reduction among SC households was higher than BC and GC households. It is also observed that about 40 per cent of households are chronically poor; however, chronic poverty is more prevalent among SC households than among BC and GCs. The chronically poor households need upfront intervention if they are to be taken out of long-standing poverty.

The decline in poverty incidence was a net function of two opposite movements. On one hand, some households managed to increase their income and hence get out of poverty through finding a job in the city, starting small-scale business enterprises, animal husbandry and dairying, etc, and on the other some other households who were living above the poverty line jumped down into poverty due to heavy expenditure on sickness, social ceremonies, etc. Unforeseen and large-sized expenditure drove some households into bad debts, which became the chief reason for their fall into poverty. The causal analysis of poverty dynamics – temporal mobility of households across the poverty line – clearly shows that the main factors of downward and upward mobility are largely different from each other. Such an asymmetric relationship has also been reported by other studies carried out elsewhere in the country [for example see, Krishna 2003; Krishna et al 2003, 2004]. The competent authorities are, therefore, required to appreciate two conclusions drawn by the study, namely, (i) temporal reduction in reduction is not unidirectional but bidirectional, and (ii) the reasons for these opposite movements are not the same. As far as the first conclusion is concerned, there is need for household level assessment of poverty over the period. The current methodology adopted by the National Sample Survey Organisation for the consumption expenditure surveys does not take this aspect into account. Though difficult it is not impossible to track sample households’ consumption

Economic and Political Weekly April 21, 2007 expenditure over the period in subsequent rounds of the NSS. The total sample size may be varied over the different rounds of NSS, but some representative sample should be fixed and monitored continuously. Reporting of survey results also need commensurate changes. Poverty estimates should depart from static to dynamic reporting, i e, sample households should be grouped into four categories including remained poor, remained non-poor, became poor and became non-poor. The suggested methodology of assessment and reporting, in view of the present author, will provide a more realistic picture of poverty.

The second important conclusion of the study – the reasons for upward and downward household mobility across the poverty line are largely asymmetric – calls for re-prioritisation of poverty alleviation programmes. Most of the poverty alleviation programmes have design objectives to help the currently-poor rise above the poverty line. Such an orientation of programmes is necessary but not sufficient because it should also be realised that some non-poor households also need direct assistance to retain their status of non-poor. The downward movement of nonpoor households simultaneously with upward movement reduces the net reduction in poverty. If such negative mobility could be checked, the net reduction would be more prominent. The two most important reasons for new entry into poverty are a large expenditure on sickness and beyond-the-capacity expenses on marriages and other social ceremonies. In the absence of institutional credit for coping with these contingencies, the households are compelled to turn to private sources which are costly options. Government can think of providing some financial support to needy people for marriage of their daughters. Such support can be in the form of subsidy or soft loan or a combination of both. Improvement in the quality and coverage of healthcare services in rural areas is likely to reduce poor and not-so-poor households’ vulnerability to health risks. Health insurance needs to be promoted on a wide scale. Some initiatives were recently taken in this direction but much success could not be achieved. The failure or poor success was caused by a low level of awareness among the rural people. Government should take the help of panchayati raj institutions, especially gram panchayats, in generating the awareness and implementation of health insurance schemes. Being closer to the rural people, these institutions are expected to prove quite effective in popularisation of such schemes.

While framing the strategy to address the issue of poverty, policymakers should also keep in mind those households which may be currently non-poor but are most vulnerable to even the smallest shock to their livelihood. Such households may be grouped into a new category, say, “neo non-poor”. Hence, the dichotomous (“poor” and “non-poor”) categorisation of rural households needs to be widened into at least a trichotomous (“poor”, “non-poor” and “neo non-poor”) distribution. The households of the third category should also receive government’s due attention in rural development and poverty alleviation programmes.

Most optimistically, the government should carry out a complete enumeration of all households and use the information to construct a household-specific index of income/expenditure status. Such an index can be made relative to the poverty line or state/ national per capita income or any other reference point. Finally, households may be grouped into a suitable number of classes depending upon their positive or negative distance from the reference point. Class distribution should be used to prioritise the government support to individual families or persons. Not only anti-poverty programmes but all the government interventions, especially health and social sector ones, should use these economic distributions for better targeting and prioritisation. “It needs to be accepted that public programmes in the areas of education and health should indeed be focused on the total population” [Sundaram 2003].




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– Escaping Poverty and Becoming Poor in Gujarat Villages’, Economic and Political Weekly, December 6.

– (2004): ‘Falling into Poverty in Villages of Andhra Pradesh – Why Poverty Avoidance Policies Are Needed?’, Economic and Political Weekly, July 17.

Sundaram, K (2003): ‘On Identification of Households Below Poverty Line in BPL Census 2002 – Some Comments on the Proposed Methodology’, Economic and Political Weekly, March 1.

World Bank (2000): ‘India – Policies to Reduce Poverty and Accelerate Sustainable Development’, Report No 19471-IN, January 31.

– (2002): Poverty in India – The Challenge of Uttar Pradesh.



Political Culture of Health in India: A Historical Perspective – Sunil Amrith Mal-areas of Health: Dispersed Histories of a Diagnostic Category – Rohan Deb Roy ‘Parasites Lost and Parasites Regained’: Rockefeller Foundation’s Anti-Hookworm Campaign in Madras Presidency – Shirish N Kavadi Maternal Health in Early Twentieth Century Bombay – Mridula Ramanna

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Economic and Political Weekly April 21, 2007

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