When the number of poor is estimated as the proportion of people below the poverty line, it is known as ‘Head Count Ratio’.
What are the total number of poor persons residing in India?
Where do they reside and has their number or proportion declined over the years or not?
When such a comparative analysis of poor people is made in terms of ratios and percentages, we will have an idea of different levels of poverty of people and their distribution; between states and over time.
The official data on poverty is made available to the public by the Planning Commission. It is estimated on the basis of consumption expenditure data collected by the National Sample Survey Organisation (NSSO).
Above chart shows the number of poor and their proportion to the population in India for the years 1973-2000. In 1973-74, more than 321 million people were below the poverty line. In 1999-2000, this number has come down to about 260 million. In terms of proportion, in 1973-74, about 55 per cent of the total population was below the poverty line. In 1999-2000, it has fallen to 26 per cent. In 1973-74, more than 80 per cent of the poor resided in rural areas and in 1999-2000, this has come down to about 75 per cent. This means that more than three-fourth of the poor in India reside in villages. Also poverty, which was prevailing predominantly in rural areas, has shifted to urban areas.
In the 1990s, the absolute number of poor in rural areas had declined whereas the number of their urban counterparts increased marginally. The poverty ratio declined continuously for both urban and rural areas. From above Chart, you will notice that during 1973-2000, there has been a decline in the number of poor and their proportion but the nature of decline in the two parameters is not encouraging. The ratio is declining much slower than the absolute number of poor in the country. You will also notice that the gap between the absolute number of poor in rural and urban areas did not narrow down until the early 1990s whereas in the case of ratio the gap has remained the same until 1999-2000.
The state level trends in poverty are shown in below Chart. It reveals that five states — Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal and Orissa — account for about 70 per cent of India’s poor. You will also notice that during 1973-74, about half the population in most of these large states was living below the poverty line. In 1999-2000, only two states — Bihar and Orissa — were left near that same level. Though they also reduced their share of poor, compared to other states, their success is marginal. If we look at Gujarat, it reduced its people below the poverty line from 48 per cent to 15 per cent during 1973-2000. During this period, West Bengal has been just as successful; from nearly two-third, i.e. 63 per cent of the population below the poverty line the same was reduced to about 27 per cent.
Bibliography : NCERT – Indian Economic Development