Poverty and Inequality | Uttarakhand State PSC (UKPSC): Preparation - UKPSC (Uttarakhand) PDF Download

 Page 1


Poverty and Inequality
Poverty and inequality are two important measures of economic developmet
of a state. They give significantly real picture of economic statue of its
people. In this chapter we will be discussing these two topics based on NSSO
survey and HDR- 2017 data.
Monthly per capita expenditure
In 2017, the average monthly per capita expenditure (MPCE) of the state was
Rs. 2928, rural areas having lower MPCE vis a vis the urban areas (Rs 2673
and Rs. 3417, respectively) and the hilly regions also reporting lower MPCE
as compared to the plains regions (Rs 2849 and Rs. 3000 respectively). In
terms of social groups it was found that the Scheduled tribes (Rs 3109) and
General castes (Rs 3231) had comparatively higher MPCE.
Table 26.1: Spatial and Social Group Distribution of Monthly per Capita
Expenditure Households (in Rs.)
  MPCE
AREA
RURAL 2673
URBAN 3419
TOTAL 2928
HILL/PLAIN
HILL 2849
PLAIN 3000
SOCIAL CATEGORY
SHEDULE CASTE 2306
SCHEDULE TRIBE 3109
OBC 2759
GENERAL 3231
Source: HDR Survey, 2017
Food and Non-Food Expenditures
Page 2


Poverty and Inequality
Poverty and inequality are two important measures of economic developmet
of a state. They give significantly real picture of economic statue of its
people. In this chapter we will be discussing these two topics based on NSSO
survey and HDR- 2017 data.
Monthly per capita expenditure
In 2017, the average monthly per capita expenditure (MPCE) of the state was
Rs. 2928, rural areas having lower MPCE vis a vis the urban areas (Rs 2673
and Rs. 3417, respectively) and the hilly regions also reporting lower MPCE
as compared to the plains regions (Rs 2849 and Rs. 3000 respectively). In
terms of social groups it was found that the Scheduled tribes (Rs 3109) and
General castes (Rs 3231) had comparatively higher MPCE.
Table 26.1: Spatial and Social Group Distribution of Monthly per Capita
Expenditure Households (in Rs.)
  MPCE
AREA
RURAL 2673
URBAN 3419
TOTAL 2928
HILL/PLAIN
HILL 2849
PLAIN 3000
SOCIAL CATEGORY
SHEDULE CASTE 2306
SCHEDULE TRIBE 3109
OBC 2759
GENERAL 3231
Source: HDR Survey, 2017
Food and Non-Food Expenditures
The data on share of food and non-food items in household expenditures
reveals that the proportions spent on both by the households are almost the
same (food 49 percent and non-food 41 percent). As expected, the share of
food expenditures is found to decline as we move up the income quintiles
showcasing that while poor households spend their incomes largely on food,
richer households spend on non-food items. The share of food expenditure in
rural areas was found to be 50 percent of household incomes while it was 46
percent in urban areas. In particular, the rural-urban gap in food expenditures
was found to be widening at higher levels of income (MPCE deciles). The
households residing in hill districts (52 percent) spent more on food items as
compared to the plains districts (46 percent). However, the gap between the
hills and the plains districts is seen to be declining with increases in incomes.
This reveals that people are spending more on non-food items as their income
levels rise with the spending on non-food items relatively higher in the plains
districts.
Table 26.2: Share of Food Expenditure
DECILE SHARE OF FOOD EXPENDITURE
10 67.9
20 65.6
30 64.5
40 63.8
50 59.8
60 56.1
70 54.8
80 50.6
90 43.9
100 37.6
Source: Uttarakhand govt. statistics
Poverty Ratios- The poverty ratios presented here are based on the Expert
Group Tendulkar Methodology (2014). Uttarakhand reported a poverty rate
Page 3


Poverty and Inequality
Poverty and inequality are two important measures of economic developmet
of a state. They give significantly real picture of economic statue of its
people. In this chapter we will be discussing these two topics based on NSSO
survey and HDR- 2017 data.
Monthly per capita expenditure
In 2017, the average monthly per capita expenditure (MPCE) of the state was
Rs. 2928, rural areas having lower MPCE vis a vis the urban areas (Rs 2673
and Rs. 3417, respectively) and the hilly regions also reporting lower MPCE
as compared to the plains regions (Rs 2849 and Rs. 3000 respectively). In
terms of social groups it was found that the Scheduled tribes (Rs 3109) and
General castes (Rs 3231) had comparatively higher MPCE.
Table 26.1: Spatial and Social Group Distribution of Monthly per Capita
Expenditure Households (in Rs.)
  MPCE
AREA
RURAL 2673
URBAN 3419
TOTAL 2928
HILL/PLAIN
HILL 2849
PLAIN 3000
SOCIAL CATEGORY
SHEDULE CASTE 2306
SCHEDULE TRIBE 3109
OBC 2759
GENERAL 3231
Source: HDR Survey, 2017
Food and Non-Food Expenditures
The data on share of food and non-food items in household expenditures
reveals that the proportions spent on both by the households are almost the
same (food 49 percent and non-food 41 percent). As expected, the share of
food expenditures is found to decline as we move up the income quintiles
showcasing that while poor households spend their incomes largely on food,
richer households spend on non-food items. The share of food expenditure in
rural areas was found to be 50 percent of household incomes while it was 46
percent in urban areas. In particular, the rural-urban gap in food expenditures
was found to be widening at higher levels of income (MPCE deciles). The
households residing in hill districts (52 percent) spent more on food items as
compared to the plains districts (46 percent). However, the gap between the
hills and the plains districts is seen to be declining with increases in incomes.
This reveals that people are spending more on non-food items as their income
levels rise with the spending on non-food items relatively higher in the plains
districts.
Table 26.2: Share of Food Expenditure
DECILE SHARE OF FOOD EXPENDITURE
10 67.9
20 65.6
30 64.5
40 63.8
50 59.8
60 56.1
70 54.8
80 50.6
90 43.9
100 37.6
Source: Uttarakhand govt. statistics
Poverty Ratios- The poverty ratios presented here are based on the Expert
Group Tendulkar Methodology (2014). Uttarakhand reported a poverty rate
of 15.6 percent with rural poverty at 17.9 percent and urban poverty at 11.1
per cent in 2017. These poverty rates are in tandem with those reported by
GIDS Lucknow (2011-12).
A comparison of earlier NSS based estimates of the poverty rate in
Uttarakhand reveals poverty saw a radical decline over the period 2004-05 to
2011-12 from 32.7 percent to 11.3 percent in the state. The GIDS Lucknow
revised poverty estimates for 2011-12 after including the state sample was at
16.9 per cent, higher than the NSS estimates for that period. As per HDR
survey, 2017 poverty figure of 15.6 per cent reveals that close to a sixth of
the state’s population is still below the poverty line. Amongst the social
groups, one-fifth of the scheduled caste population and one-sixth of the Other
Backward Classes were below the poverty line in 2017. The scheduled tribes
reported the lowest poverty rate at 12.1 percent. Poverty in the hilly regions
(17.9 percent) was much higher than that in the plains (13.6 percent). Within
the hills and the plains regions, poverty ratios were higher for rural areas vis-
à-vis the urban areas.
Table 26.3: Percentage of Population below Poverty Line
YEAR RURAL URBAN TOTAL
2004-05 35.1 26.2 32.7
2011-12 11.6 10.5 11.3
2011-12 18.7 11.4 16.9
2017-18 17.9 11.1 15.6
The three hill districts of Champawat (35.2 percent), Almora (30.7 percent)
and Chamoli (27.5 percent) report the highest proportions of population
below the poverty line. The plains of Dehradun report the lowest poverty rate
at 7.1 percent. In the plains of Udham Singh Nagar (18.7 percent) and
Haridwar (15.3 percent), the poverty rates are also relatively high. A clear
and expected rural-urban divide is seen in the poverty rates with rural areas
having higher proportions of their population below the poverty line across
all the districts. Champawat also reports the highest rural and urban poverty
in 2017 (36.4 percent and 27.6 percent) followed by Udham Singh Nagar
with 19.9 percent in rural and 16.6 percent urban respectively. In the plains
Page 4


Poverty and Inequality
Poverty and inequality are two important measures of economic developmet
of a state. They give significantly real picture of economic statue of its
people. In this chapter we will be discussing these two topics based on NSSO
survey and HDR- 2017 data.
Monthly per capita expenditure
In 2017, the average monthly per capita expenditure (MPCE) of the state was
Rs. 2928, rural areas having lower MPCE vis a vis the urban areas (Rs 2673
and Rs. 3417, respectively) and the hilly regions also reporting lower MPCE
as compared to the plains regions (Rs 2849 and Rs. 3000 respectively). In
terms of social groups it was found that the Scheduled tribes (Rs 3109) and
General castes (Rs 3231) had comparatively higher MPCE.
Table 26.1: Spatial and Social Group Distribution of Monthly per Capita
Expenditure Households (in Rs.)
  MPCE
AREA
RURAL 2673
URBAN 3419
TOTAL 2928
HILL/PLAIN
HILL 2849
PLAIN 3000
SOCIAL CATEGORY
SHEDULE CASTE 2306
SCHEDULE TRIBE 3109
OBC 2759
GENERAL 3231
Source: HDR Survey, 2017
Food and Non-Food Expenditures
The data on share of food and non-food items in household expenditures
reveals that the proportions spent on both by the households are almost the
same (food 49 percent and non-food 41 percent). As expected, the share of
food expenditures is found to decline as we move up the income quintiles
showcasing that while poor households spend their incomes largely on food,
richer households spend on non-food items. The share of food expenditure in
rural areas was found to be 50 percent of household incomes while it was 46
percent in urban areas. In particular, the rural-urban gap in food expenditures
was found to be widening at higher levels of income (MPCE deciles). The
households residing in hill districts (52 percent) spent more on food items as
compared to the plains districts (46 percent). However, the gap between the
hills and the plains districts is seen to be declining with increases in incomes.
This reveals that people are spending more on non-food items as their income
levels rise with the spending on non-food items relatively higher in the plains
districts.
Table 26.2: Share of Food Expenditure
DECILE SHARE OF FOOD EXPENDITURE
10 67.9
20 65.6
30 64.5
40 63.8
50 59.8
60 56.1
70 54.8
80 50.6
90 43.9
100 37.6
Source: Uttarakhand govt. statistics
Poverty Ratios- The poverty ratios presented here are based on the Expert
Group Tendulkar Methodology (2014). Uttarakhand reported a poverty rate
of 15.6 percent with rural poverty at 17.9 percent and urban poverty at 11.1
per cent in 2017. These poverty rates are in tandem with those reported by
GIDS Lucknow (2011-12).
A comparison of earlier NSS based estimates of the poverty rate in
Uttarakhand reveals poverty saw a radical decline over the period 2004-05 to
2011-12 from 32.7 percent to 11.3 percent in the state. The GIDS Lucknow
revised poverty estimates for 2011-12 after including the state sample was at
16.9 per cent, higher than the NSS estimates for that period. As per HDR
survey, 2017 poverty figure of 15.6 per cent reveals that close to a sixth of
the state’s population is still below the poverty line. Amongst the social
groups, one-fifth of the scheduled caste population and one-sixth of the Other
Backward Classes were below the poverty line in 2017. The scheduled tribes
reported the lowest poverty rate at 12.1 percent. Poverty in the hilly regions
(17.9 percent) was much higher than that in the plains (13.6 percent). Within
the hills and the plains regions, poverty ratios were higher for rural areas vis-
à-vis the urban areas.
Table 26.3: Percentage of Population below Poverty Line
YEAR RURAL URBAN TOTAL
2004-05 35.1 26.2 32.7
2011-12 11.6 10.5 11.3
2011-12 18.7 11.4 16.9
2017-18 17.9 11.1 15.6
The three hill districts of Champawat (35.2 percent), Almora (30.7 percent)
and Chamoli (27.5 percent) report the highest proportions of population
below the poverty line. The plains of Dehradun report the lowest poverty rate
at 7.1 percent. In the plains of Udham Singh Nagar (18.7 percent) and
Haridwar (15.3 percent), the poverty rates are also relatively high. A clear
and expected rural-urban divide is seen in the poverty rates with rural areas
having higher proportions of their population below the poverty line across
all the districts. Champawat also reports the highest rural and urban poverty
in 2017 (36.4 percent and 27.6 percent) followed by Udham Singh Nagar
with 19.9 percent in rural and 16.6 percent urban respectively. In the plains
district of Dehradun, where the poverty rates are the lowest, rural poverty
(12.4 percent) is much higher than urban poverty (3.3 percent). These are
useful pointers for the formulation and targeting policy purposes.
Table 26.4: Spatial Distribution of Poverty
 DISTRICT RURAL URBAN TOTAL
DISTRICTS
HILL 19.6 11.3 17.9
PLAIN 15.7 11.1 13.6
SOCIAL GROUPS
SC 23.7 18.6 21.9
ST 12.8 9.3 12.1
OBC 18.0 13.9 16.4
GENERAL 16.1 5.9 12.9
Despite the data showing a bias in poverty being higher in the hills than in the
plains, it is argued that the commonly used statistical indicators of poverty do
not always accurately capture and reflect the poverty scenario in hilly areas.
The conditions, terrain and climate in the hills make it absolutely necessary
for people to have a higher minimum energy and caloric intake for their
survival in the hills. They also need to have minimum clothing including
warm clothing and permanent shelter, to protect themselves from the
tenacities of the hilly weather and climate. In addition, consumption levels in
the mountain areas are not always met by local income generation but by
remittances to a significant extent, making their sustainability rather
precarious. Poverty ratios based on common consumption norms for
calculating the ‘poverty line’ would very likely indicate that many people
who are actually not able to meet their basic survival needs according to the
local conditions are non- poor. Thus, it is possible that the incidence of
poverty is found to be lower in the hilly areas, sometimes lower than even the
relatively better-off regions in the plains.
Table 26.5: District Wise Poverty Rates
DISTRICT POVERTY
DEHRADUN 7.1
Page 5


Poverty and Inequality
Poverty and inequality are two important measures of economic developmet
of a state. They give significantly real picture of economic statue of its
people. In this chapter we will be discussing these two topics based on NSSO
survey and HDR- 2017 data.
Monthly per capita expenditure
In 2017, the average monthly per capita expenditure (MPCE) of the state was
Rs. 2928, rural areas having lower MPCE vis a vis the urban areas (Rs 2673
and Rs. 3417, respectively) and the hilly regions also reporting lower MPCE
as compared to the plains regions (Rs 2849 and Rs. 3000 respectively). In
terms of social groups it was found that the Scheduled tribes (Rs 3109) and
General castes (Rs 3231) had comparatively higher MPCE.
Table 26.1: Spatial and Social Group Distribution of Monthly per Capita
Expenditure Households (in Rs.)
  MPCE
AREA
RURAL 2673
URBAN 3419
TOTAL 2928
HILL/PLAIN
HILL 2849
PLAIN 3000
SOCIAL CATEGORY
SHEDULE CASTE 2306
SCHEDULE TRIBE 3109
OBC 2759
GENERAL 3231
Source: HDR Survey, 2017
Food and Non-Food Expenditures
The data on share of food and non-food items in household expenditures
reveals that the proportions spent on both by the households are almost the
same (food 49 percent and non-food 41 percent). As expected, the share of
food expenditures is found to decline as we move up the income quintiles
showcasing that while poor households spend their incomes largely on food,
richer households spend on non-food items. The share of food expenditure in
rural areas was found to be 50 percent of household incomes while it was 46
percent in urban areas. In particular, the rural-urban gap in food expenditures
was found to be widening at higher levels of income (MPCE deciles). The
households residing in hill districts (52 percent) spent more on food items as
compared to the plains districts (46 percent). However, the gap between the
hills and the plains districts is seen to be declining with increases in incomes.
This reveals that people are spending more on non-food items as their income
levels rise with the spending on non-food items relatively higher in the plains
districts.
Table 26.2: Share of Food Expenditure
DECILE SHARE OF FOOD EXPENDITURE
10 67.9
20 65.6
30 64.5
40 63.8
50 59.8
60 56.1
70 54.8
80 50.6
90 43.9
100 37.6
Source: Uttarakhand govt. statistics
Poverty Ratios- The poverty ratios presented here are based on the Expert
Group Tendulkar Methodology (2014). Uttarakhand reported a poverty rate
of 15.6 percent with rural poverty at 17.9 percent and urban poverty at 11.1
per cent in 2017. These poverty rates are in tandem with those reported by
GIDS Lucknow (2011-12).
A comparison of earlier NSS based estimates of the poverty rate in
Uttarakhand reveals poverty saw a radical decline over the period 2004-05 to
2011-12 from 32.7 percent to 11.3 percent in the state. The GIDS Lucknow
revised poverty estimates for 2011-12 after including the state sample was at
16.9 per cent, higher than the NSS estimates for that period. As per HDR
survey, 2017 poverty figure of 15.6 per cent reveals that close to a sixth of
the state’s population is still below the poverty line. Amongst the social
groups, one-fifth of the scheduled caste population and one-sixth of the Other
Backward Classes were below the poverty line in 2017. The scheduled tribes
reported the lowest poverty rate at 12.1 percent. Poverty in the hilly regions
(17.9 percent) was much higher than that in the plains (13.6 percent). Within
the hills and the plains regions, poverty ratios were higher for rural areas vis-
à-vis the urban areas.
Table 26.3: Percentage of Population below Poverty Line
YEAR RURAL URBAN TOTAL
2004-05 35.1 26.2 32.7
2011-12 11.6 10.5 11.3
2011-12 18.7 11.4 16.9
2017-18 17.9 11.1 15.6
The three hill districts of Champawat (35.2 percent), Almora (30.7 percent)
and Chamoli (27.5 percent) report the highest proportions of population
below the poverty line. The plains of Dehradun report the lowest poverty rate
at 7.1 percent. In the plains of Udham Singh Nagar (18.7 percent) and
Haridwar (15.3 percent), the poverty rates are also relatively high. A clear
and expected rural-urban divide is seen in the poverty rates with rural areas
having higher proportions of their population below the poverty line across
all the districts. Champawat also reports the highest rural and urban poverty
in 2017 (36.4 percent and 27.6 percent) followed by Udham Singh Nagar
with 19.9 percent in rural and 16.6 percent urban respectively. In the plains
district of Dehradun, where the poverty rates are the lowest, rural poverty
(12.4 percent) is much higher than urban poverty (3.3 percent). These are
useful pointers for the formulation and targeting policy purposes.
Table 26.4: Spatial Distribution of Poverty
 DISTRICT RURAL URBAN TOTAL
DISTRICTS
HILL 19.6 11.3 17.9
PLAIN 15.7 11.1 13.6
SOCIAL GROUPS
SC 23.7 18.6 21.9
ST 12.8 9.3 12.1
OBC 18.0 13.9 16.4
GENERAL 16.1 5.9 12.9
Despite the data showing a bias in poverty being higher in the hills than in the
plains, it is argued that the commonly used statistical indicators of poverty do
not always accurately capture and reflect the poverty scenario in hilly areas.
The conditions, terrain and climate in the hills make it absolutely necessary
for people to have a higher minimum energy and caloric intake for their
survival in the hills. They also need to have minimum clothing including
warm clothing and permanent shelter, to protect themselves from the
tenacities of the hilly weather and climate. In addition, consumption levels in
the mountain areas are not always met by local income generation but by
remittances to a significant extent, making their sustainability rather
precarious. Poverty ratios based on common consumption norms for
calculating the ‘poverty line’ would very likely indicate that many people
who are actually not able to meet their basic survival needs according to the
local conditions are non- poor. Thus, it is possible that the incidence of
poverty is found to be lower in the hilly areas, sometimes lower than even the
relatively better-off regions in the plains.
Table 26.5: District Wise Poverty Rates
DISTRICT POVERTY
DEHRADUN 7.1
UTTARKASHI 9.9
BAGESHWAR 11.8
TEHRI GARHWAL 13
PITHORAGARH 13
NAINITAL 13.7
PAURI GARHWAL 14.8
HARIDWAR 15.3
UTTARAKHAND 15.6
RUDRAPRAYAG 18.3
U S NAGAR 18.7
CHAMOLI 27.5
ALMORA 30.7
CHAMPAWAT 35.2
Source: HDR Survey, 2017
Inequality Measures – the MPCE
The most common measure of inequality is the MPCE, as it typically reflects
the inequalities in living standards and well-being. It is observed that the top
20 percent of people in the state have around 52 percent share in the MPCE
while the share of the poorest 20 percent is only around 6 percent. This shows
widening inequality. The extent of inequality would be much higher if we
look at the relative shares of the richest 20 percent and the poorest 20 percent
of the population. It emerges that, on an average, the poorest quintile of the
population has a consumption level that is approximately one-tenth that of the
richest quintile. The disparity is high in urban (the top 20 percent accounts
about 58.4 percent while the share of the bottom 20 percent is only 2.4
percent) and rural (top 20 percent consumes about 47.2 percent and bottom
20 percent consumes 8.3 percent). District-wise the disparity between the
bottom and top 20 percent is more in Bageshwar, Chamoli, Uttarkashi, and
Dehradun than the state average.