Trends in Rural Poverty in India during 1973-74 to 2011-12
M. Prada Rao1, Y. Anil Kumar2*, Ch. Bala Kotaih3, J. Nehru Naik4
1Professor, Department of Economics, Andhra University, Visakhapatnam -530003
2Research Scholar, Department of Economics, Andhra University, Visakhapatnam -530003
3Research Scholar, FDP, UGC, Department of Economics, Andhra University, Visakhapatnam -530003
4Research Scholar, FDP, UGC, Department of Economics, Andhra University, Visakhapatnam -530003
ABSTRACT:
In this paper made an attempt to examine the trends in rural poverty in India using secondary data for the time period from 1973-74 to 2011-12. The study considers all states and union territories of India as population and seven states from high per capita income states and seven states from low per capita income states are selected as sample. For assessing poverty levels of sample states, the variables like number of rural population below poverty, percentage of rural population below poverty line and rural poverty line in rupees are taken in to consideration. Growth rates, CV analysis, f-test and t-test are applied along with descriptive statistics for the analysis. Our result shows that the trend in rural absolute poverty has been declining over a time period, but not same kind in high per capita income and low per capita income states and there is significant mean deference noticed. The incidence of rural poverty in high per capita income states and low per capita income states of India was decreasing and varied considerably during the study period. Rural poverty growth rates have fallen quickly for all high per capita income states more than 10 per cent of compound annual growth, while in all low per capita income states less than 10 per cent of compound annual growth. There is significant mean difference witnessed between high per capita income and low per capita income states in declining poverty.
KEY WORDS: Trends, Rural Poverty
BACKGROUND:
Poverty refers to a situation when people are deprived of basic necessities of life. It is often characterized by inadequacy of food, shelter and clothes. In other words, poverty refers to a state of privation where there is a lack of essential needs for subsistence. Valentine (1968) says that the essence of poverty is inequality. In slightly different words, the basic meaning of poverty is relative deprivation. Poverty in its most general sense is the lack of necessities. Basic food, shelter, medical care, and safety are generally thought necessary based on shared values of human dignity. However, what is a necessity to one person is not uniformly a necessity to others (Sen, 1997). Poverty is a complex phenomenon that generally refers to inadequacy of resources and deprivation of choice
Poverty is the main problem of the world of developing countries. One billion people in the world are living on less than one dollar a day. 2.7 billion People in the world are living on less than two dollars a day. In every year, Six million children die due to malnutrition. Every day 800 million people stay hungry in which 300 are children (UN Millennium Project). These factors of poverty also harm the development of the country but on the other hand there are also such aspects that cause poverty which needs to be discussed in details. Therefore, along with economic perspectives, social and political factors may be and often are equally responsible for poverty. The areas of inequality such as unequal status of women and minority groups of low developed countries represent this aspect of poverty. As a result, rich people continue to prosper while poor people lag behind (Usman, 2009).
The Growth–Poverty Nexus:
The Indian economy has been one of the leading performers globally in recent years. The process of reforms initiated in 1991 has impacted significantly on growth rates in the Indian economy. The long-term trend rate of growth increased from 3.5 percent during the period 1950s–1970s to 5.4 percent in the 1980s, 6 percent in the 1990s, and to above 7.3 percent in recent years. Relative poverty estimates broadly show a decrease in poverty level with growth. National poverty line estimates indicate that there has been a decrease in poverty incidence from 54.9 percent in 1973–74 to 36 percent in 1993–1994 to 27.5 percent in 2004–2005, though poverty numbers remain high. In 2004–05, the rural poverty was 28.3 percent and the urban poverty was 25.7 percent (ADB, 2011), the rural poverty was 25.70 percent and the urban poverty was 13.70 percent in 2011. Chronic hunger, hunger based on seasonal drought and vulnerability and hidden hunger due to nutritional deficiencies has kept around 269.8 million people under some form of food insecurity (RBI, 2011).
Dimensions and Incidence of Poverty:
The incidence of poverty in India is a matter of key concern for policy analysts and academic researchers both because of its scope and intensity. National poverty line estimates indicated a poverty incidence of 27.5 per- cent in 2004–2005, implying that over one quarter of the population in India lives below the poverty line. Also, in absolute numbers, India still has 301.7 million poor persons with a significant percentage of them being substantially or severely poor in terms of the norms identified as being necessary for survival. If one considers the international poverty line of $1 per day (measured at 1993 purchasing power parity exchange rates), then the percentage of poor people in India is even higher, at around 34 percent. This percentage is pushed up to an alarming level of 80 percent if one uses the $2 per day as a poverty threshold. A recent ADB study defined an Asian Poverty Line of $1.35. On this basis two-thirds of India’s population or around 740 million Indian people live in pverty. The significance of India in the context of world poverty is apparent given the fact that around half of the world’s poor live in South Asia and of the 534 milion people in South Asia who lived on less than $1 per day in 2003, over 300 million lived in India. The Suresh Tendulkar Committee estimated over 430 million (37.2 percent) below the poverty line based on a bundle of deprivations. The recently inroduced multi-dimensional deprivation index (MPI) also places about 645 million (55.4 percent) Indians below the poverty line. The latest figures of poverty estimate, for the year 2014, based on the National Sample Survey Organization's (NSSO) 68 Consumption expenditure Survey and the Planning commissions official poverty lines, puts rural poverty at around 25.70% and urban poverty at 13.70%. This amounts to 2166 lakh people in rural areas and 531 lakh in urban areas, as being poor, a total of around 2697.83 lakh people clearly indicating the nature and extent of the task ahead of us. In terms of non-income dimensions of poverty too, such as infant and maternal mortality rates, literacy levels and gender inequalities, India continues to display ‘intense poverty’ (ADB, 2011).
THEORETICAL FRAMEWORK:
Poverty Concepts and Measurements:
The poverty concepts are explained into policy throughout different definitions and measures. It is important to understand them in order to investigate what determines poverty. Poverty is multidimensional and there is no single precise definition and evaluation of it. Therefore, it is considerable to understand the different concepts and measures of poverty to explore particular economic, social, political and historical perspectives.
The first step in analyzing the problem of poverty is to be able to define it conceptually. The minimum standard of living is one criterion used to define the poverty line. This minimum standard includes both food and non-food components. One identifies a consumption basket that may be regarded as essential for an individual for sustenance. Then one finds the set of corresponding prices, which can be used to convert this basket to value terms. The minimum standard of living thus obtained may be regarded as the poverty line. An individual with consumption below this defined poverty line is regarded as poor.
In the view of anthropologists poverty is attached the values such as self-respect, security, vulnerability, independence, political rights, identity, decision making freedom, justice and social exclusion (Masika et al. 1997). On the other hand, economic definition of poverty can be more quantified. These measures of poverty include income and consumption along with other social indicators such as nutrition, literacy, infant mortality and life expectancy. Traditionally, in developed and under developed countries income and consumption have been used as measure of poverty to facilitate agencies and governments for identification of deprive people in the society (Wagle, 2006). Therefore, poverty is not only in the perspective of traditional view that is the lack of income but also exclusion of people who are living in poverty from vulnerable conditions, customs and patterns. In this respect, modern definition of poverty illustrates that poverty is multidimensional and there is no single definition to represent it.
Generally, there are two economic indicators are used in third world countries. One is poverty line approach, in terms of monetary indicator such as income and consumption. In this regard, Head Count Ratio (HCR) is used to define poverty on national level. The other method is used to measure poverty is non-monetary which is called Unsatisfied Basic Human Needs (UBN). In this aspect people are not able to have access of basic needs such as housing, basic health services and education (Hare et al. 2007).
Primary and Secondary Poverty:
In the literature on poverty a distinction is made between ‘primary’ and ‘secondary’ poverty. Primary poverty is a situation in which total earnings of a family are inadequate to obtain the minimum necessaries needed for the maintenance of mere physical efficiency. On the other hand families are said to be in secondary poverty if total earnings would be sufficient for the maintenance of physical efficiency provided the households change the pattern of allocation of expenditure. This concept indicates that living in a state of poverty is not necessarily a matter of income deficiency. Further, this concept throws light on the role of ‘demonstration effect’ as a cause of poverty and the leakages to household budgets by way of diversion of income for consumption of non-essential items even before the primary needs are met (Nunes, 2008).
Household and Individual Poverty:
Data on expenditure is usually available at household level rather than individual level. But estimates of the poor are generated from this data assuming that the allocation of expenditure within the household is even and all members of the households are treated as non-poor if the average per capita expenditure is more than that required for crossing poverty line. These estimates reflect household poverty rather than individual poverty. However, there are some evidences of intra-household inequalities the allocation of expenditure. There is a need to supplement the macro estimates of poverty by micro level studies to identify the vulnerable sections in different categories of households (Vijaya et al, 2014).
Absolute Poverty and Relative Poverty:
Purchasing Power Parity (PPP) is a common measure of poverty. Poverty lines are drawn on the basis of goods that satisfy a person for his basic needs. The units of these goods are converted into PPP. Furthermore, a head count ratio is calculated to represent the percentage of poor people in the total population (Usman, 2009). Absolute poverty is the minimum basket of resources in which one is need to survive. The relative poverty is living conditions and resources in the society in relations to others. Thus absolute poverty is hunger, deprivation, and lack of education, ill health and suffering. On the other hand, relative poverty is the unequal distribution of resources and associated with a matter of social equity. It is relate to average income of the society and social exclusion. Measurement of absolute poverty is distinctive as compared to relative poverty (Schwartzman: 1998). Generally, in poverty measures literature, there are three methods used to measure poverty. These are Headcount Index, poverty gap index and poverty severity index (Siddiqui, 2007).
STATEMENT OF PROBLEM:
Despite the favorable growth experienced by the Indian economy in the last decade or so, one of the most pressing and persistent problems, staring its people in the face, is that of the level and nature of the poverty of its millions still. The latest figures of poverty estimate, for the year 2011-12, based on the Report of the Expert Group to Review the Methodology for Measurement and the Planning commissions official poverty lines, puts rural poverty at around 30.9% and urban poverty at 26.4%. This amounts to 2605.2 lakh people in rural areas and 1024.7 lakh in urban areas, as being poor. A total of around 3629.9 lakh people are clearly indicating the nature and extent of the task ahead of us.
Over the years, the State, with the help of dedicated subject experts have made continuous efforts to tackle this problem of our society. Investigations with, not only various policy measures, but also the type of overall economic environment more than one way managed to reduce poverty levels overtime consistently, if not at a steady rate. However, despite the fall in incidence of poverty over time, the problem continues. The present study made an honest attempt to reexamine the rural poverty in India with reference to high per capita income state and low per capita income states.
The review of the existing studies on measuring poverty outlines that there still exists slight literature on measuring trends on rural poverty. Most of the studies define poverty on the basis rural and urban areas of Sate. Hence, a substantial scope exists for measuring rural poverty using high per capita income states and low per capita income states of rural populations. The present study tries to fill the existing gap in the literature, considering two different dimensions: time, and high versus low per capita income states.
OBJECTIVES:
The overall objective of the research paper is to analyze the growth/decay of rural poverty during the study period, the specific objective of the study are:
1. To measure the extent of poverty decline in rural area of high per capita and low per capita income states during the study period and
2. To examine the differences between high per capita and low per capita income states regarding poverty levels in rural area.
HYPOTHESIS:
H0: The rural poverty do not differ significantly between the of high per capita and low per capita income states.
METHODOLOGY:
The study is mainly based on secondary data obtained from the report of Reserve Bank of India. The main source of the data is statistics on Indian Economy, Table – 169. The relevant data have been collected from various issues of Reserve Bank of India data base, the URL is http://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications.
The time period we consider for our study is span of 38 years from 1973-74 to 2011-12. The study covered all NSS rounds on poverty from 1973-74 to 2011-12 which are 7 reports.
The study considers all states and union territories of India as population and seven high per capita income states and seven low per capita income states are selected as sample states for the study. Sample states are selected based on Gross State Domestic Product of the financial year 2014-15. The details of sample states presented in below table.
|
Sl. No |
High Per Capita Income States |
Sl. No |
Low Per Capita Income States |
|
1 |
Andhra Pradesh |
1 |
Bihar |
|
2 |
Delhi |
2 |
Orissa |
|
3 |
Gujarat |
3 |
Uttar Pradesh |
|
4 |
Karnataka |
4 |
Nagaland |
|
5 |
Kerala |
5 |
Tripura |
|
6 |
Maharashtra |
6 |
Manipur |
|
7 |
Tamil Nadu |
7 |
Madhya Pradesh |
For assessing poverty of sample states the variables are taken in to consideration are (1) Number of Rural population below poverty, (2) Percentage of Rural population below poverty line and (3) Rural poverty line in rupees. Growth rates, CV analysis, f-test and T-test are employed along with descriptive statistics for data analysis.
RESULTS AND DISCUSSIONS:
The present paper is an endeavor to analyze the incidence of rural poverty across the states at macro level with secondary data and examines the level of poverty in selected sample states.
Rural Population below Poverty:
Changes in the poverty of high per capita income states in India from 1973-74 to 2011-12 presented in (Table - 1). The track record of High per capita income states of India was decreasing the rural population and poverty has varied considerably. Among the seven states four states Kerala, Tamil Nadu, Andhra Pradesh and Delhi were experienced a substantial reduction in the percentage of rural Population below poverty line over the entire 38 year period from 1973-74 to2011-12. Percentage change in rural population below poverty was declined by 86.1 per cent in Kerala, 65.7 in Tamil Nadu, 65.3 per cent in Andhra Pradesh, 52.8 per cent in Delhi, 28.6 per cent in Maharashtra, 27.7 per cent in Karnataka and 20.4 per cent in Gujarat. Among the high per capita income states Kerala was occupied first place with low incidence of poverty followed by Tamil Nadu, while Gujarat was in last place with high Incidence of poverty.
Changes in the rural population below poverty line of low per capita income states in India from 1973-74 to 2011-12 presented in (Table - 2). The worst poverty scenarios observed in Manipur, Uttar Pradesh and Nagaland with increasing rural population below poverty line. Percentage change in rural population below the poverty line was declined by 4.97 per cent in Bihar, 11.32 per cent in Orissa, 17.41 per cent in Madhya Pradesh and 36.68 per cent in Tripura. Manipur, Uttar Pradesh and Nagaland states have suffered with positive sign in percentage change of 21.93 per cent, 6.52 per cent and 4.15 respectively in rural population below poverty line. The rural population below poverty line was declined by marginal in low per capita income states in India from 1973-74 to 2011-12. However, despite the substantial decrease in Tripura and Madhya Pradesh, still the remaining five states were experienced higher incidence of poverty.
State wise summary statistics of rural population below poverty line during 1973-74 to 2011-12 are presented in (Table – 3). As observed from the table for high per capita income states, Delhi was in better position with low average of 0.46 followed by Kerala with an average 49.49, while Maharashtra was in worst position with high average of 174.93 followed by Tamil Nadu having an average of 110.06. An average for overall period for Delhi was very low and for Maharashtra was very high. During 1973-74 to 2011-12 trends in poor population was most stable in Maharashtra with low level of coefficient of variation 16.7 next Karnataka with coefficient of variation 23.1 while unstable in Kerala with coefficient of variation 75.0. The variation for high per capita income states ranged between 16.7 in
Maharashtra and 75.0 in Kerala. To analyze Growth and decay in number of rural population below poverty line during 1973-74 to 2011-12 in high per capita income states compound growth rate is taken for consideration. The maximum decline was witnessed by Kerala i.e., 24.5 per cent followed by Tamil Nadu having 14.17 per cent decline in poor population. There was no considerable decline in poor population of Gujarat, Karnataka and Maharashtra. The trend decline in poor population ranged between 24.56per cent in Kerala and 3.2 per cent in Gujarat.
Table -1 Number of Rural Population below Poverty Line during – 1973-74 to 2011-12 High Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
% Change |
|
Andhra Pradesh |
178.21 |
114.34 |
74.49 |
58.13 |
64.70 |
127.9 |
61.8 |
-65.3 |
|
Delhi |
1.06 |
0.44 |
0.19 |
0.07 |
0.63 |
0.3 |
0.5 |
-52.8 |
|
Gujarat |
94.61 |
72.88 |
62.16 |
39.80 |
63.49 |
91.6 |
75.35 |
-20.4 |
|
Karnataka |
128.40 |
100.50 |
95.99 |
59.91 |
75.05 |
97.4 |
92.8 |
-27.7 |
|
Kerala |
111.36 |
81.62 |
55.95 |
20.97 |
32.43 |
21.6 |
15.48 |
-86.1 |
|
Maharashtra |
210.84 |
193.75 |
193.33 |
125.12 |
171.13 |
179.8 |
150.56 |
-28.6 |
|
Tamil Nadu |
172.60 |
181.61 |
121.70 |
80.51 |
76.50 |
78.3 |
59.23 |
-65.7 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
Table - 2 Number Rural Population below Poverty Line during – 1973-74 to 2011-12 Low Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
% Change |
|
Bihar |
336.52 |
417.70 |
450.86 |
376.51 |
336.72 |
498.7 |
320.4 |
-4.79 |
|
Orissa |
142.24 |
164.65 |
140.96 |
143.69 |
151.75 |
135.5 |
126.14 |
-11.32 |
|
Uttar Pradesh |
449.99 |
448.03 |
496.17 |
412.01 |
473.00 |
600.6 |
479.35 |
6.52 |
|
Nagaland |
2.65 |
3.19 |
4.85 |
5.21 |
3.87 |
2.8 |
2.76 |
4.15 |
|
Tripura |
7.88 |
8.35 |
11.41 |
12.53 |
6.18 |
5.4 |
4.99 |
-36.68 |
|
Manipur |
6.11 |
4.76 |
6.33 |
6.53 |
3.76 |
8.8 |
7.45 |
21.93 |
|
Madhya Pradesh |
231.21 |
215.48 |
216.19 |
217.32 |
175.65 |
216.9 |
190.95 |
-17.41 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
From the above table low per capita income states, Nagaland was in better position with low average of 3.62 followed by Manipur with an average 6.25, while
Uttar Pradesh was in worst position with high average of 479.88 followed by Bihar having an average of 391.06. An average for overall period for Nagaland was very low and for Uttar Pradesh was very high. During 1973-74 to 2011-12 poor population was most stable in Orissa with low level coefficient of variation 8.48 followed by Madhya Pradesh with coefficient of variation 9.07, while poverty trends were unstable in Tripura with high level coefficient of variation 36.09. The variation for low per capita income states ranged between 8.48 in Orissa and 36.09 inTripura. To examine the trends in rural population below poverty line during 1973-74 to 2011-12 in low per capita income states compound growth rate is calculated. The maximum decline was witnessed by Nagaland i.e., 0.58 per cent followed by Bihar having 0.70 per cent decline in poor population. There was no considerable decline in poor population of Uttar Pradesh and Orissa. The trend decline in poor population ranged between 6.32 per cent in Tripura and 0.58 per cent in Nagaland.
Percentage of Rural Population below Poverty Line:
Changes in the incidence of poverty in high per capita income states in India from 1973-74 to 2011-12 presented in (Table -4). The incidence of rural poverty in high per capita income states of India was decreasing and varied considerably during the study period. Among the seven states, three states Andhra Pradesh, Kerala and Tamil Nadu were experienced a significant decline in the poverty over the entire period from 1973-74 to 2011-12. Poverty was declined by 92.62 per cent in Andhra Pradesh, 84.56 per cent age in Kerala, 72.44 per cent age in Tamil Nadu, 58.03per cent age in Maharashtra, 55.50 per cent age in Karnataka, 53.53 per cent age in Gujarat, 47.14 per cent age in Delhi. Among the high per capita income states Andhra Pradesh was occupied first place with low incidence of poverty followed by Kerala whereas Delhi was in last place with high Incidence of poverty.
Table -3 Summary Statistics - Number of Rural Population below Poverty Line-1973-74 to 2011-12
|
States |
Mean |
Standard Deviation |
Coefficient of Variation |
Compound Growth/decay |
|
High per capita income states |
||||
|
Andhra Pradesh |
97.08 |
45.00 |
46.4 |
-14.04 |
|
Delhi |
0.46 |
0.33 |
71.7 |
-10.18 |
|
Gujarat |
71.41 |
18.76 |
26.3 |
-3.20 |
|
Karnataka |
92.86 |
21.43 |
23.1 |
-4.53 |
|
Kerala |
48.49 |
36.36 |
75.0 |
-24.56 |
|
Maharashtra |
174.93 |
29.14 |
16.7 |
-4.70 |
|
Tamil Nadu |
110.06 |
49.60 |
45.1 |
-14.17 |
|
Low per capita income states |
||||
|
Bihar |
391.06 |
67.09 |
17.16 |
-0.70 |
|
Orissa |
143.56 |
12.17 |
8.48 |
-1.70 |
|
Uttar Pradesh |
479.88 |
59.72 |
12.45 |
0.91 |
|
Nagaland |
3.62 |
1.05 |
29.07 |
0.58 |
|
Tripura |
8.11 |
2.93 |
36.09 |
-6.32 |
|
Manipur |
6.25 |
1.66 |
26.51 |
2.87 |
|
Madhya Pradesh |
209.10 |
18.96 |
9.07 |
-2.70 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||
Table - 4 Percentage of Rural Population below Poverty Line during – 1973-74 to 2011-12 High Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
% Change |
|
Andhra Pradesh |
148.41 |
26.53 |
15.92 |
11.05 |
11.20 |
22.80 |
10.96 |
-92.62 |
|
Delhi |
24.44 |
7.66 |
1.90 |
0.40 |
6.90 |
7.70 |
12.92 |
-47.14 |
|
Gujarat |
46.35 |
29.80 |
22.18 |
13.17 |
19.10 |
26.70 |
21.54 |
-53.53 |
|
Karnataka |
55.14 |
36.33 |
29.88 |
17.38 |
20.80 |
26.10 |
24.54 |
-55.50 |
|
Kerala |
59.19 |
39.03 |
25.76 |
9.38 |
13.20 |
12.00 |
9.14 |
-84.56 |
|
Maharashtra |
57.71 |
45.23 |
37.93 |
23.72 |
29.60 |
29.50 |
24.22 |
-58.03 |
|
Tamil Nadu |
57.43 |
53.99 |
32.48 |
20.55 |
22.80 |
21.20 |
15.83 |
-72.44 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
Parentage of Changes in the poverty line of low per capita income states in India from 1973-74 to 2011-12 presented in (Table -5). The record of low per capita income states of India was decreasing the poverty has varied considerably. Among the seven states Tripura and Nagaland were observed significant decline in poverty. The incidence of poverty line was declined by 68.62 per cent in Tripura, 62.16 per cent in Nagaland, 46.95 per cent in Orissa, 46.22 per cent, in Madhya Pradesh 42.96 per cent in Uttar Pradesh, 45.93 per cent in Bihar and 26.33 per cent in Manipur. The poverty was declined by substantial in low per capita income states in India from 1973-74 to 2011-12. Tripura was occupied first place with low incidence of poverty followed by Nagaland whereas Manipur was in last place with high Incidence of poverty
From the low per capita income states it can be observed in the above table, Tripura was in better position with low average of 34.14 followed by Nagaland with an average 34.55, while Bihar was in worst position with high average of 51.61 followed by Orissa having an average of 50.60. An average for overall period for Tripura was very low and for Bihar was very high regarding poverty. During 1973-74 to 2011-12 poor population was most stable in Madhya Pradesh with low level of coefficient of variation 22.09 next Bihar with coefficient of variation 22.39 while unstable in Tripura with high level of coefficient of variation 41.84. The variation for high per capita income states ranged between 22.09 in Madhya Pradesh and 41.84 in Tripura. To analyze Growth and decay in incidence of rural poverty line during 1973-74 to 2011-12 in low per capita income states compound growth rate is taken for consideration. The maximum decline was observed by Tripura i.e., 15.26 per cent followed Nagaland having 12.96 per cent decline in poverty. There was no considerable decline in incidence of Manipur and Madhya Pradesh. The trend decline in poverty ranged between 15.26 per cent in Tripura and 4.27 per cent in Manipur.
Table - 5 Percentage of Rural Population below Poverty Line during – 1973-74 to 2011-12 Low Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
% Change |
|
Bihar |
62.99 |
64.37 |
58.20 |
44.30 |
42.10 |
55.30 |
34.06 |
-45.93 |
|
Orissa |
67.28 |
67.53 |
49.72 |
48.01 |
46.80 |
39.20 |
35.69 |
-46.95 |
|
Uttar Pradesh |
56.53 |
46.45 |
42.28 |
31.22 |
33.40 |
39.40 |
30.40 |
-46.22 |
|
Nagaland |
52.67 |
42.60 |
45.01 |
40.04 |
22.30 |
19.30 |
19.93 |
-62.16 |
|
Tripura |
52.67 |
42.60 |
45.01 |
40.04 |
22.30 |
19.80 |
16.53 |
-68.62 |
|
Manipur |
52.67 |
42.60 |
45.01 |
40.04 |
22.30 |
47.40 |
38.80 |
-26.33 |
|
Madhya Pradesh |
62.66 |
48.90 |
40.64 |
37.06 |
36.90 |
42.00 |
35.74 |
-42.96 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
Table -6 Summary Statistics - Percentage of Rural Population below Poverty Line-1973-74 to 2011-12
|
States |
Mean |
Standard Deviation |
Coefficient of Variation |
Compound Growth rate / decay |
|
High per capita income states |
||||
|
Andhra Pradesh |
35.27 |
50.27 |
142.55 |
-31.08 |
|
Delhi |
8.85 |
8.02 |
90.66 |
-8.70 |
|
Gujarat |
25.55 |
10.60 |
41.49 |
-10.37 |
|
Karnataka |
30.02 |
12.66 |
42.15 |
-10.92 |
|
Kerala |
23.96 |
18.98 |
79.24 |
-23.42 |
|
Maharashtra |
166.92 |
345.52 |
207.00 |
-11.67 |
|
Tamil Nadu |
32.04 |
16.95 |
52.91 |
-16.81 |
|
Low per capita income states |
||||
|
Bihar |
51.62 |
11.56 |
22.39 |
-8.41 |
|
Orissa |
50.60 |
12.51 |
24.72 |
-8.66 |
|
Uttar Pradesh |
39.95 |
9.43 |
23.59 |
-8.48 |
|
Nagaland |
34.55 |
13.72 |
39.70 |
-12.96 |
|
Tripura |
34.14 |
14.28 |
41.84 |
-15.26 |
|
Manipur |
41.26 |
9.58 |
23.22 |
-4.27 |
|
Madhya Pradesh |
43.41 |
9.59 |
22.09 |
-7.71 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||
Rural Poverty Line:
Changes in the poverty line of high per capita income states in India from 1973-74 to 2011-12 presented in (Table -7). The track record of High per capita income states of India was increasing the poverty line and has varied considerably during the study period. Among the seven states five states Gujarat, Karnataka, Kerala, Maharashtra and Tamil Nadu were experienced a substantial increase in the percentage of poverty line over the entire 38 year period from 1973-74 to2011-12. Percentage change in poverty line was increased by 1878.77 per cent in Gujarat, 1869.81 in Kerala, 1851.65 per cent in Tamil Nadu, 1815.99 per cent in Maharashtra, 1809.40 per cent in Karnataka. Among the high per capita income states Delhi was occupied first place with high per capita consumption expenditure followed by Andhra Pradesh, while Karnataka was in last place with low per capita consumption expenditure.
Changes in the poverty line of low per capita income states in India from 1973-74 to 2011-12 presented in (Table -8). The increasing scenarios observed in poverty line of low per capita income states. Uttar Pradesh, Nagaland and Madhya Pradesh were in top three positions with increasing per capita consumption expenditure. Percentage change in poverty line was increased by 866.22 per cent in Tripura, 1248.82 per cent in Bihar, 1253.67 per cent in Manipur and 1382.82 per cent in Orissa. The poverty line was increased by vital in low per capita income states in India from 1973-74 to 2011-12. However, there in substantial increasing trend was observed in per capita monthly expenditure of low in per capita income states also.
State wise summary statistics of poverty line during 1973-74 to 2011-12 are presented in (Table – 9). As observed from the table for high per capita income states, Delhi was in top position with an average poverty line of 451.31followed by Kerala with an average 442.9, while Andhra Pradesh was in lost position with low average poverty line of 451.31 followed by Karnataka having an average of 368.00. An average for overall period for Andhra pradesh was very low and for Delhi was very high. During 1973-74 to 2011-12 increasing trend in poverty line was most stable in Tamil Nadu with coefficient of variation 80.65 next Andhra Pradesh with coefficient of variation 81.48
while unstable in Delhi with coefficient of variation 87.50. The variation for high per capita income states ranged between 80.65 in Tamil Nadu and 87.50 in Delhi.To analyze Growth and decay of poverty line during 1973-74 to 2011-12 in high per capita income states compound growth rate is taken for consideration. The maximum increase was witnessed by Delhi i.e., 56.43 per cent followed by Andhra pradesh having 54.08 per cent in monthly per capita consumption expenditure. There was considerable growth observed poverty line amount all seven states on high per capita income group. The trend increased in per capita consumption expenditure ranged between 56.43 per cent in Delhi and 52.40 per cent in Karnataka.
Table -7 Rural Poverty Line in Rupees during 1973-74 to 2011-12 High Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
%Change |
|
Andhra Pradesh |
41.71 |
72.66 |
163.02 |
262.94 |
433.43 |
693.80 |
860.00 |
1961.86 |
|
Delhi |
49.95 |
88.57 |
223.79 |
362.68 |
541.39 |
747.80 |
1145.00 |
2192.29 |
|
Gujarat |
47.10 |
83.29 |
202.11 |
318.94 |
501.58 |
725.90 |
932.00 |
1878.77 |
|
Karnataka |
47.24 |
83.31 |
186.63 |
309.59 |
417.84 |
629.40 |
902.00 |
1809.40 |
|
Kerala |
51.68 |
99.35 |
243.84 |
374.79 |
537.31 |
775.30 |
1018.00 |
1869.81 |
|
Maharashtra |
50.47 |
88.24 |
194.94 |
318.63 |
484.89 |
743.70 |
967.00 |
1815.99 |
|
Tamil Nadu |
45.09 |
96.15 |
196.53 |
307.64 |
441.69 |
639.00 |
880.00 |
1851.65 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
Table -8 Rural Poverty Line in Rupees during 1973-74 to 2011-12 Low Per Capita Income States
|
States |
1973-74 |
1983-84 |
1993-94 |
1999-2000 |
2004-05 |
2009-10 |
2011-12 |
% Change |
|
Bihar |
57.68 |
97.48 |
212.16 |
333.07 |
354.36 |
665.60 |
778.00 |
1248.82 |
|
Orissa |
46.87 |
106.28 |
194.03 |
323.92 |
325.79 |
567.10 |
695.00 |
1382.82 |
|
Uttar Pradesh |
48.92 |
83.85 |
213.01 |
336.88 |
365.84 |
663.70 |
768.00 |
1469.91 |
|
Nagaland |
82.59 |
98.32 |
232.05 |
365.43 |
387.64 |
1016.80 |
1270.00 |
1437.72 |
|
Tripura |
82.59 |
98.32 |
232.05 |
365.43 |
387.64 |
663.40 |
798.00 |
866.22 |
|
Manipur |
82.59 |
98.32 |
232.05 |
365.43 |
387.64 |
871.00 |
1118.00 |
1253.67 |
|
Madhya Pradesh |
50.20 |
83.59 |
193.10 |
311.34 |
327.78 |
631.90 |
771.00 |
1435.86 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||||||
Low per capita income states were observed from the above table, Nagaland was in top position with low average amount of 493.26 followed by Manipur with an average 450.72, while Orissa was in last position with low average of 322.71 followed by Madhya Pradesh having an average of 338.42. An average for overall period for Orissa was very low and for Nagaland was very high. During 1973-74 to 2011-12 poor population was most stable in Tripura with low level coefficient of variation72.54 next Orissa with coefficient of variation 73.53 while unstable in Nagaland with coefficient of variation 94.29. The variation for high per capita income states ranged between 72.54 in Tripura and 94.29 in Nagaland. To analyze Growth in poverty line during 1973-74 to 2011-12 in low per capita income states compound growth rate is taken for consideration. The maximum increase was witnessed by Uttar Pradesh i.e., 48.20 per cent followed by Nagaland having 47.76 per cent increase in per capita consumption expenditure. There was considerable increase in poverty line all seven states more than 40 per cent. The trend increase in consumption expenditure ranged from 48.20 per cent in Uttar Pradesh to 38.27 per cent in Tripura.
Hypothesis Testing
To test the statistical significance of differences of rural poverty between high per capita income states and low per capita income states, we applied F- test and t-test with response variables as growth of rural population below poverty line, growth of percentage of rural population below poverty line and growth of rural poverty line in rupees. (Table -10) provides the results pertaining to these tests.
Panel-A of Table presents the results of f-test with the null hypothesis that the estimated poverty between high per capita income states and low per capita income states is not different. The null hypothesis of no difference in poverty and its distinct parameters are rejected in all the instances as calculated F-statistics are significant statistically at 1%. Thus it shows that there were significant mean differences between high per capita income states and low per capita income states regarding poverty. Panel-B of Table presents the results of t-test with the null hypothesis that the estimated mean poverty between high per capita income states and low per capita income states is not different. The null hypothesis of no difference in mean poverty and its distinct parameters are rejected in all the instances as calculated t-statistics are significant statistically with p-value are <0.01. Thus it shows that there were significant mean difference between high per capita income states and low per capita income states regarding poverty.
Table - 9 Summary Statistics Rural Poverty Line in Rupees -1973-74 to 2011-12
|
States |
Mean |
Standard Deviation |
Coefficient of Variation |
Compound Growth rate /decay |
|
High per capita income states |
||||
|
Andhra Pradesh |
361.08 |
315.94 |
87.50 |
54.08 |
|
Delhi |
451.31 |
393.60 |
87.21 |
56.43 |
|
Gujarat |
401.56 |
334.19 |
83.22 |
53.18 |
|
Karnataka |
368.00 |
309.90 |
84.21 |
52.40 |
|
Kerala |
442.90 |
357.18 |
80.65 |
53.08 |
|
Maharashtra |
406.84 |
345.09 |
84.82 |
52.48 |
|
Tamil Nadu |
372.30 |
303.34 |
81.48 |
52.88 |
|
Low per capita income states |
||||
|
Bihar |
356.91 |
274.16 |
76.81 |
45.02 |
|
Orissa |
322.71 |
237.29 |
73.53 |
46.99 |
|
Uttar Pradesh |
354.31 |
274.98 |
77.61 |
48.20 |
|
Nagaland |
493.26 |
465.08 |
94.29 |
47.76 |
|
Tripura |
375.35 |
272.29 |
72.54 |
38.27 |
|
Manipur |
450.72 |
395.95 |
87.85 |
45.09 |
|
Madhya Pradesh |
338.42 |
271.79 |
80.31 |
47.73 |
|
Source: statistics on Indian Economy. Reserve Bank of India. Table - 169 |
||||
Table -10 Hypothesis Testing- Poverty Differences between High Per Capita Income States and Low Per Capita Income States
|
Measures |
Growth of Rural population below poverty line |
Growth of percentage of Rural population below poverty line |
Growth of Rural poverty line in rupees |
|
Panel A: ANOVA Test H0 : poverty between High per capita income states and Low per capita income states is not different |
|||
|
F-statistics |
10.034* |
3.892*** |
31.378* |
|
p-value |
0.008 |
0.072 |
0.000 |
|
Inference |
Rejected H0 |
Rejected H0 |
Rejected H0 |
|
Panel B: t-Test H0 : Meanof poverty between High per capita income states and Low per capita income states is not different |
|||
|
t-statistics |
3.168* |
1.973*** |
5.602* |
|
p-value |
0.008 |
0.072 |
0.000 |
|
Inference |
Rejected H0 |
Rejected H0 |
Rejected H0 |
|
Note: * significant at 1% level.*** significant at 10% level. |
|||
CONCLUSIONS:
The trend in rural absolute poverty has been declining over a time period, but not same in high per capita income and low per capita income states and there is significant mean deference. The incidence of rural poverty in high per capita income states and low per capita income states of India was decreasing and varied considerably during the study period. Rural poverty growth rates have fallen quickly for all high per capita income states more than 10 per cent of compound annual growth, while in all low per capita income states less than 10 per cent of compound annual growth. There is significant mean difference witnessed between high per capita income and low per capita income states in declining poverty.
REFERENCES:
1. ADB, (2011), Understanding Poverty in India, research report, Asian Development Bank, Manila.
2. Deepty, B. (2010), Impact of Microfinance on Poverty, Employment and Women Empowerment in Rural punjab, unpublished doctoral thesis, Punjabi University Regional Centre, Bathinda.
3. Gujarati N. D. (2004), Basic Econometrics, The McGraw-Hill Companies, Inc. New Delhi.
4. Gupta, S.P (2007): Statistical Methods, Sultan Chand & Sons, New Delhi.
5. Hare, G., & Rivas, S. (2007), “Changing poverty distribution in Bolivia: the role of rural–urban migration and urban services”, Geo Journal, 68(4), 307-326.
6. Kothari, C. R. (2004), Research methodology: Methods and techniques. New Age International, New Delhi.
7. Masika, R., De Haan, A., & Baden, S. (1997), Urbanisation and urban poverty: A gender analysis. Report No 54, BRIDGE (development - gender) Institute of Development Studies, Brighton.
8. NSSO, (2014), Report of the Expert Group to Review the Methodology for Measurement and the Planning commission’s official poverty lines, Ministry of Statistics and Programme Implementation, Government of India, New Delhi.
9. Nunes, C. P. (2008), the Economic Thought on Poverty Measurement: From the Nineteenth-Century to the Rediscovering Era.
10. RBI, (2011), Hand book of Statistics on the Indian Economy, Number and Percentage of Population below Poverty Line, Table -162, Reserve Bank of India, Mumbai, India.
11. Schwartzman Simon (1998), President, Brazilian Institute for Geography and Statistics: The Statistical Measurement of Poverty, available at http://www.schwartzman.org.br/simon/pdf/rio.pdf
12. Sen, A. (1997), Development as Freedom, Oxford University Press, New York.
13. Siddiqui, A. (2007). India and south Asia: Economic developments in the age of globalization, (Ed.). ME Sharpe, New york.
14. Singh, Y. K. (2006), Fundamental of research methodology and statistics. New Age International. New Delhi.
15. Usman, M. (2009), Socio-Economic Determinants of Poverty a case of Pakistan, unpublished thesis, Development and International Relations, Aalborg University, Denmark.
16. Valentine, (1968), “Review of Culture and Poverty: Critique and Counter-Proposals”, Current Anthropology, 10(2/3), 181–201.
17. Vijaya, R. M., Lahoti, R., & Swaminathan, H. (2014), “Moving from the household to the individual: Multidimensional poverty analysis”, World Development, 59, 70-81.
18. Wagle, U. R. (2007), “Poverty in Kathmandu: What do subjective and objective economic welfare concepts suggest?”, The Journal of Economic Inequality, 5(1), 73-95.
APPENDIX:
Statistical Tools Description
Percentage change:
It merely gives the percentage change over the previous year i.e.,
|
|
||
|
Where |
|
|
|
g |
= |
Percentage change |
|
kt |
= |
value of k in the year ‘t’ |
|
kt-1 |
= |
value of k in the year ‘t-1’ |
|
t |
= |
present year |
|
t-1 |
= |
base year |
Compound
Annual Growth Rate
It
works out change for a given period on the basis of the base year to end year
values i.e.,
|
|
||
|
Where |
|
|
|
g |
= |
compound growth rate |
|
K1 |
= |
value of k in the end year |
|
K0 |
= |
value of k in the base year |
|
t |
= |
Time Period+ |
(Gujarati., 2004)
Mean:
Arithmetic average is also called as mean. It is the most common type and widely used measure of central tendency or an average. Mean is defined as the quantity (figure) obtained by the number of observations. Formula of Mean:
Where,
X= value of the variable
n = total number of items
Σ = sum of the observations of the variable
(Kothari, 2004)
Standard deviation:
Standard Deviation of a set of scores is defined as the square root of the average of the squares of the deviation of each from the mean. Symbolically we can say that (Singh, 2006).
Coefficient of variation:
The
coefficient of variation, CV, indicates the relative magnitude of the standard
deviation as compared with the mean of the distribution of measurements, as a
percentage. Thus, the formulas are:
The coefficient of variation is useful when we wish to compare the variability of two data sets relative to the general level of values (and thus relative to the mean) in each set set (Daniel L. Fulks and Michael K. Staton, 2003).
The F – Test or the Variance Ratio Test:
The F– test is named in honor of the great statistician R.A. Fisher. The objective of the F- test is to find out whether the two independent estimates of population variance differ significantly, or whether the two samples may be regarded as drawn from the normal populations having the same variance. For carrying out the test of significance, the F test is calculated as follows:
It should be noted that S12 is always the larger estimate of variance, i.e., S12 > S22
|
|
Larger estimate of variance |
|
F = |
-------------------------------- |
|
|
Smaller estimate of variance |
V1 = n1 – 1 and V2 = n2 – 1
V1 = Degrees of freedom for sample having larger variance.
V2 = Degree of freedom for sample having smaller variance.
The calculated value of F is compared with the table value for degree of freedom of V1 and V2 at 5% or 1% level of significance. If the calculated value of F is greater than the table value, then the F ratio is considered significant and the null hypothesis is rejected. On the other hand, if the calculated value of F is less than the table value the null hypothesis is accepted and it is inferred that both the samples have come from the population having the same variance (Gupta, 2007).
The t-test:
The t-test is applied to test the significance of various results obtained from the analysis of surveyed data in the following ways:
1 Testing difference between means of two independent samples
2 Testing difference between means of two dependent samples.
Testing Difference between Means of Two Independent Samples
The test is applied to measure the mean difference between the groups (Deepty, 2010). The null hypothesis (H0) is that both the samples come from the same normal population and there is no significant difference in their mean values. The alternate hypothesis (H1) is that there is significant difference in the mean incomes of two samples. To carry out the test, t-value is calculated as follows:
Where:
= Mean value of the first sample
= Mean value of the second sample
n1 = Size of first sample
n2 = Size of second sample
S = Combined standard deviation of two samples
The degree of freedom is equal to n1+n2−2.
Results: In order to test the set hypothesis, the calculated value of ‘t’ is compared with the Table value for degree of freedom at certain level of significance.
If ‘t' > t0.05 (0.01) for n1+n2−2 then H0 is rejected and H1 accepted.
If ‘t' < t0.05 (0.01) for n1+n2−2 then H0 is accepted and H1 rejected.
Received on 18.04.2016
Modified on 22.09.2016
Accepted on 21.10.2016
© A&V Publications
all right reserved
Research J. Humanities and Social Sciences. 8(1): January
- March, 2017, 1-12.
DOI: 10.5958/2321-5828.2017.00001.8