Poverty and inequality

Poverty and inequality

• Suggesting that India, which is home to the largest number of poor during 2012, may have been overestimating the number of its poor, the World Bank report has explained how a shift in the way consumption expenditure is recorded changes the country’s poverty rate from 21.2 percent to 12.4 percent for 2011-12 #$
• Based on the 14 different exclusion parameters adopted during SECC survey, it has been found that the total number of excluded households in the rural areas is 7.05 crore (39.4 percent)**

• Based on the 5 different automatic inclusion parameters, it has been found that 16.5 lakh households in rural areas are extremely poor, which is merely 0.92 percent of total rural households**

• It has been found that in the rural areas there are nearly 8.69 crore households i.e.  48.5 percent of total rural households, which are deprived in any one of the 7 deprivation criteria adopted by the SECC**
• In rural India, the average MPCE was Rs.1122 for ST, Rs. 1252 for SC and Rs. 1439 for OBC. In urban India it was Rs. 2193 for ST, Rs. 2028 for SC, and Rs. 2275 for OBC. The average MPCE of ‘Others’ (i.e. non-SC, non-ST and non-OBC) at national level (Rs. 1719 in rural and Rs. 3242 in urban India) was more than the all-groups average (Rs. 1430 in rural and Rs. 2630 in urban India) in both sectors @$
• In India, at the household level, the Gini coefficient is 0.668 for asset holdings and 0.680 for net worth. As in other countries, the wealth distribution is more concentrated than the distribution of incomeand especially more concentrated than that of expenditures *$ 
• The concentration of billionaire wealth appears to be unusually large in India. According to Forbes magazine (2014), total billionaire wealth amounts to 12 percent of gross domestic product (GDP) in 2012. As such, India is an outlier in the ratio of billionaire wealth to GDP among economies at a similar development level *$
• Based on the analysis presented in the Report by Rangarajan Committee, monthly per capita consumption expenditure of Rs. 972 in rural areas and Rs. 1407 in urban areas is treated as the poverty lines at the all India level. This implies a monthly consumption expenditure of Rs. 4860 in rural areas or Rs. 7035 in urban areas for a family of five at 2011-12 prices $
• Based on the methodology outlined in the Report by Rangarajan Committee, the poverty ratio at all India level for 2011-12 comes to 29.5%. Working backwards this methodology gives the estimate for 2009-2010 at 38.2%. This is in contrast to 21.9% as estimated by Tendulkar methodology for 2011-12 and 29.8% for 2009-10 $
• India is home to 343.5 million destitute people – 28.5% of its population is destitute*
• The Empowerment Line prepared by McKinsey Global Institute (MGI) reveals that 56 percent of India’s population lacks the means for a minimum acceptable standard of living. Based on Empowerment Line, some 680 million Indians are deprived—more than 2.5 times the population of 270 million below the official poverty line. India’s Empowerment Line stands at Rs. 1,336 per capita per month, or almost Rs. 6,700 for a family of five per month @@
• A total of 33,510 slums were estimated to be present in the urban areas of India. About 41% of these were notified and 59% non-notified. Maharashtra, with an estimated 7723 slums, accounted for about 23% of all slums in urban India, followed by Andhra Pradesh, accounting for 13.5%, and West Bengal, which had a share of about 12%. An estimated 8.8 million households lived in urban slums $$

• In an estimated 32% of all slums, the approach road to the slum usually remained waterlogged due to rainfall. At the all-India level, 31% of slums had no latrine facility. About 31% of all slums in India had no drainage facility $$  
• The percentage of persons below the Poverty Line in 2011-12 has been estimated as 25.7% in rural areas, 13.7% in urban areas and 21.9% for the country as a whole. State-wise, poverty ratio was highest in Chhattisgarh (39.93%) followed by Jharkhand (36.96%), Manipur (36.89%), Arunachal Pradesh (34.67%) and Bihar (33.74%) @

• During 2011-12, the bottom 5% of the population had an average monthly per capita expenditure of Rs. 521.44 in rural areas and Rs. 700.50 in urban areas. The top 5% of the population had an average monthly per capita expenditure of Rs. 4481.18 in rural areas and Rs. 10281.84 in urban areas π

• India accounts for one-third (up from 22 percent in 1981) of the world poor ¥

• The Gini ratio (a measure of consumption inequality) for rural areas declined from 0.30 in 2004-05 to 0.29 in 2009-10 and for urban areas it increased from 0.37 to 0.38 during the same period

• India and China, home to huge numbers of the world’s poor, are increasingly sheltering some of the world’s richest people. In 2002, India was home to four billionaires ($US); presently the number is 55. In 2002, China claimed only one billionaire. In Forbes’ 2012 survey China recorded 115–more than Germany, France and Japan combined $

• According to Prof. Arjun Sengupta who chaired the National Commission for Enterprises in the Unorganized Sector, 77% of the population of India lives below the poverty line. Dr. NC Saxena, a retired civil servant acting as a Commissioner appointed by the Supreme Court, feels that half the country’s population of 1.15 billion is below the poverty line, which he apparently defines as a monthly per capita income of Rs 700 in rural areas and Rs 1,000 in urban areas. While a Planning Commission estimate puts the number of below poverty line (BPL) families at 62.5 million, state governments estimate that this number is closer to 107 million. Some experts feel that availing the public with more number of BPL ration cards help the state-level politicians to win elections through populist means. The World Bank’s figure for the percentage of population below the poverty line in India is 42 per cent, based on 2005 data %$

• Infant mortality rate (IMR) which was 58 per thousand in the year 2005 has fallen to 44 in the year 2011. The number of rural households provided toilet facilities annually have increased from 6.21 lakh in 2002-3 to 88 lakh in 2011-12. IMR in 2011 is the lowest in Kerala (12) and highest in Madhya Pradesh (59) against the national average of 44 σ

• In India, underweight prevalence rate among children aged 0-59 months declined from 64 percent in 1993 to 61 percent in 2006 among the poorest 20 percent while the same declined from 37 percent in 1993 to 25 percent in 2006 among the richest 20 percent. Therefore, a greater reduction in underweight prevalence occurred in the richest 20 percent of households than in the poorest 20 percent µ
#$ Ending Extreme Poverty, Sharing Prosperity: Progress and Policies, World Bank (released in October 2015), please click here to access
** Socio Economic and Caste Census 2011, please click here 
@$ NSS 68th Round report entitled: Household Consumer Expenditure across Socio-Economic Groups 2011-12 (please click here to access)  
*$ Addressing Inequality in South Asia by Martín Rama, Tara Béteille, Yue Li, Pradeep K. Mitra, and John Lincoln Newman (January 2015), World Bank(please click here to access)
$ Report of the Expert Group to Review the Methodology for Measurement of Poverty (also called the Rangarajan Committee report on poverty), submitted to the Government of India in June 2014 (Please click here to download)
* Global Multidimensional Poverty Index (MPI) 2014 (please click here to download document 1, document 2 and document 3)
@@ From poverty to empowerment: India’s imperative for jobs, growth, and effective basic services (2014), produced by McKinsey Global Institute (MGI) (please click here to download the report)
$$ Key Indicators of Urban Slums in India, NSS 69th round survey, July 2012 to December 2012 (click here to read more)
@ Press Note on Poverty Estimates, 2011-12, Planning Commission, July, 2013,
π 68th round of National Sample Survey 2011-12,
¥ "The State of the Poor: Where are the Poor and Where are the Poorest?" (2013) by Pedro Olinto and Hiroki Uematsu, World Bank

+ Report of the Expert Group to Recommend the Detailed Methodology for Identification of Families Living below Poverty Line in the Urban Areas, Planning Commission 2012, Perspective Planning Division,

$ Born Equal: How reducing inequality could give our children a better future (2012), Save the Children,

%$ Poverty of thought, The Business Standard, 2 July, 2009,
and other sources

σ Economic  Survey 2012-13,

µ 2013 Hunger Report-Within Reach Global Development Goals (2012), published by Bread for the World Institute, http://www.hungerreport.org/data-tables/

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