User:Rajan Nandola/Temp/Population and poverty Final.doc

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Rajan J.Nandola

Demographic Changes in India:


India is the second most populous nation in the world after China, with an annual growth rate of two percent. India was a first country to launch an official family planning programme to reduce population growth. It is therefore the size of population was a crucial for determinant of economic development. Some economists are of view that the age structure of population is a significant factor as far as economic performance of the country is concerned. Those is population with more working population saves and invest more due to the reduced spending on dependants. Therefore it is necessary to know the rate at which population is growing and also the composition and distribution of population.

Theory of Demographic Transition:

The theory shows three different stages of economic development associated with the sequential stage of birth rate and death rate.


First Stage:

In first stage. Birth rate and death rate are high. Hence, the population remains more or less stable. Generally the first stage rebates to the backward economies. The birth rate is high because of illiteracy, early marriages, lack of knowledge about family planning and conventional belief of big size of family. On the other hand death rate is high due to poverty, lack of medical facilities, primitive sanitation and poor diet. The main occupation in this countries are engaged in agriculture with low per capital income. This results in low standard of living.

Second Stage:

This is characterized by rapid growth of population. The increase in income enables the people to improve their diet. There is an all-round development due to improvement in standard of living, education, medical facilities etc. This development will reduce death rate. But in this stage the Birth rate remains high which will lead to rapid population growth. The Birth rate remain high due agrarian nature of economy and also education is confired to narrow section of society, the people’s attitude towards the size of family do not change overnight. Therefore this stage is called as population Explosion Stage where population increases more than production. India is experiencing this stage. This is related to developing country.

Third Stage:

This stage is characterized as economic development which changes from agrarian economy to the industrial one. The birth rate starts falling due to modernization and urbanization. The education wide spread round the corner, and there is extensive used of family planning devices, womens prefer jobs outside. The consciousness of maintaining high standard of living tends to reduce the family size in an industrialized economy. Here at this stage the population decline.

Demographic profile of India:

India possesses 2.4 percent of total land area of the world but shelters about 17% of world population. The census of India releases the date of demographic profile of the country. The last census was 14th census was completed in March 2011 which was provisional and the actual was 2001.

(1)Size and growth rate of population in India:

India is the second largest populated country in the world with the total population of 10207 million in 2001 census. Every sixth person on the earth is an Indian. The growth rate India’s population falls in to four phases.

1901 - 1921Stagnant population

1921 - 1951Steady growth

1951 - 1981Rapid high growth

1981 - 2001High growth with definite

Signs of slowing down.

The trends in population in India can be seen for the year 1991-2011

Year Population (Billions) Growth Rate (%) Annual
1991 846 million 2.14
2001 1.02 1.93
2011 ( P ) 1.21 1.58
Source: Census of India

During the early part of 20th century. India experienced negative population growth rate during 1911-1921 but thereafter it experienced continuous increase in growth of population from 1901-2001 can also be classified in four phases.

The population of India has increased by more than 181 million during the decade 2001-2011

• The absolute addition is slightly lower than the population of Brazil, the fifth most populous

Country in the world.

• The population of India, at 1210.2 million, is almost equal to the combined population of

U.S.A., Indonesia, Brazil, Pakistan, Bangladesh and Japan put together (1214.3 million). 2001-2011 is the first decade (with the exception of 1911-1921) which has actually added lesser population compared to the previous decade.

• The percentage decadal growth during 2001-2011 has registered the sharpest decline since Independence - a decrease of 3.90 percentage points from 21.54 to 17.64 percent.

(2)Sex Ratio:

It is the number of females per 1000 males. This indicates the equity between males and females at a given point of time. It shows the ratio of women to men in population. The sex ratio of the USA is 1029 females per 1000 males, Japan with 1041 females but there is different scenario in South Asian countries where China has sex ratio of 944 females per 1000 males and India with 933 females. In 1991 the sex ratio was 927 which are increased to 933 in 2001and further increased to 940 in 2011. The reason behind excess males is female mortality, sex selective abortion, female infanticide etc. Among 35 states and union territories in India only Kerla has reported 1058 females per 1000 males maintaining. The lowest sex ratio is in the states and union territories like Punjab with (874), Chandigarh with (773), Delhi (821), Daman and Div (709) etc. The top 2 states is Kerla and puducheery with 1084 and 1038, on the other side lowest is Damam & Diu and Dadra & Nagar Havelli with 618 and 775 of sex ratio in 2011.

Year Sex ratio
1991 927
2001 933
2011 Provisional 940
Source: Census of India

(3)Population Density:

It is the number of persons living in one square kilometer of land area. According to 2001 census, the density of population in the country is 324. The density of population was 77 persons in 1901 which increased to 324 in 2001. The highest number of Density was reported by Delhi (9,294) followed by Chandigarh (7,903). The lowest density reported by Jammu and Kashmir (99), Rajasthan (165), Gujarat (258), Maharashtra with 314. The population density in 2011 was highest in NCT of Delhi and Chandigarh with 11297 and 9252 of density; on the other hand the state with lowest density is A.P and A & N Islands with 17 and 46 of density.

Year Population density
1991 267
2001 325
2011 Provisional 382
Source: Census of India

(4)Urbanization and Economic Growth:

(Rural – Urban Distribution)

Census 2001 defined an urban area as

(i)All places with a municipality, corporation, cantonment board or notified town area

(ii)All other places which satisfied the following criteria :

  1. Minimum population of 5000.
  2. At least 75% of the male working population engaged in non-agricultural pursuits.
  3. Density of at least 400 per sq. km.

The percentage of urban population to total population was 27.8 percent in 2001. Delhi had registered the highest percentage of urban population (93%) followed by Chandigarth (89.8%) and Pondicherry (66.6%). The lowest level of urbanaization is reported for Himachal Pradesh with less than 10%.

  1. Mortality and Life expectancy:

Mortality is one of the important achievements of humanity. Infant mortality is calculated as a ratio of the number of deaths among the 1000 children before they reach their first birthday. Child mortality rate measures the probability of dying between the first and fifth birthday.

The infant mortality rate in India was as high as 204 at the beginning of 20th century. The IMR has declined from 129 per 1000 live Birth in 1971 to 63 per 1000 in 2002 according to various SRS statistical reports. TFT is one of the important indicators for population. It is defined as the average number of children a woman will have. The TFR is 3 children per woman. The lowest TFR was reported for Nagaland with 1.5 children per woman to 4.5 in Bihar. The Kerala state is doing well with 1.9 children per women.

Year Infant Mortality Rate
1,991 80
2,001 66
2,007 55
2,008 53
2,009 50
Source: Planning commission

Life Expectancy means expectation of life at birth. It depends majorly on death rate. If death rate is high, life expectancy rate is low and if death is low life expectancy rate is high. Life expectancy rate was 41.2 during 1951-61 which has increased to 65.3 till 2001. The most depressing factor is the Infant mortality rate is high.

Year Life Expectancy at birth
2008 69.25
2009 69.89
2010 66.46
2011 66.8
Source: CIA World Fact book

(6)Birth Rate and Death Rate:

The Birth Rate and Death Rate decides the growth of population. The growth rate of population is measured with the difference between the birth and death rate i.e. Natural growth rate. The Trends in Birth rate and Death rate in India can be seen with the table. The crude birth rate for India is 24.8 in 2003 which have declined from 22.5 in 2009 on the other hand crude death rate were 8.0 in 2003 have decreased to 7.3 till 2009.

Between 1951-1991 the natural growth rate increased and thereafter it has decreased. This is also due to increase in urbanization.

Year Birth Rate Death Rate Natural Growth Rate
2,003 24.8 8.0 16.8
2,004 24.1 7.5 16.6
2,005 23.8 7.6 16.3
2,006 23.5 7.5 16.0
2,007 23.1 7.4 15.7
2,008 22.8 7.4 15.4
2,009 22.5 7.3 15.2
Source: Planning Commission

(7)Literacy rate:

Literacy is one of the important indicators for human development. According to definition of census a person is literate if he or she can read and write with understanding in any language. The current literacy rate is 65.83 percent from that male literacy rates are 64.13% and females are 53.67% respectively. The males and female population literacy rate has increased from 64.13% and 39.23% to 75.26% and 53.67% till 2001 and in 2011 it was 82.14% and 65.16%.

Year Literacy rate Males Females
1991 52.21 64.1 39.3
2001 64.83 75.3 53.7
2011 Provisional 74.04 82.1 65.5

(8)Age composition:

The age composition helps to determine the proportion of labour force in the total population. The population is divided into three different groups i.e. 0-14 age, 15-59 age and 60+. The age between 15 to 59 is working group. According to National Commission on Population. The population in age group between 15 - 59 years is currently 58% and is projected to increase to nearly 64 percent by 2016. The age group of 60 plus years is projected to increase from the current levels of 7 percent to nearly 9 percent by 2016. The population below 15 years of age (currently 35 percent) is projected to decline to 28 percent by 2016.

National Population Policy:

In 1952, India was the first country in the world to launch a national programme, emphasizing family planning to the extent necessary for reducing birth rates “to stabilize the population at a level consistent with the requirement of national economy. After 1952, sharp declines in death rates were however not accompanied by a similar drop in birth rates. The National Health Policy, 1983 stated that replacement level of total fertility rate (TFR) should be achieved by 2000.

Stabilizing population is an essential requirement for promoting sustainable development with more equitable distribution. However, it is as much a function of making reproductive health care accessible and affordable for all, as of increasing the provision and outreach of primary and secondary education, extending basic amenities including sanitation, safe drinking water and housing, besides empowering women and enhancing their employment opportunities, and providing transport and communications.

The National Population Policy 2000 (NPP 2000) affirms the commitment of government towards voluntary and informed choice and consent of citizens while availing of reproductive health care services and continuation of the target free approach in administering family planning services. The NPP 2000 provides a policy framework for advancing goals and prioritizing strategies during next decade, to meet the reproductive and child health needs of the people of India, and to achieve net replacement levels (TFR) by 2010. It is based upon the need to simultaneously address issues of child survival, maternal health, and contraception, while increasing outreach and coverage package of reproductive and child health services by government, industry and the voluntary non-government sector, working in partnership.


(1)Immediate objective: It is to address the unmet needs for contraception, health care infrastructure and health personnel, and to provide integrated service delivery for basic reproductive and child health care.

(2)Medium-term objective: It is to bring to TFR to replacement levels by 2010, through vigorous implementation of inter-sectoral operational strategies. (The total fertility rate (TFR, sometimes also called the fertility rate, period total fertility rate (PTFR) or total period fertility rate (TPFR)) of a population is the average number of children that would be born to a woman over her lifetime.). Replacement level fertility is the level of fertility at which a population exactly replaces itself from one generation to the next. In countries with high infant and child mortality rates, however, the average number of births may need to be much higher. Replacement level fertility is not associated with a unique set of age-specific birth rates.

(3)Long-term objectives: It is to achieve a stable population by 2045, at a level consistent with the requirements of sustainable economic growth, social development and environmental protection.

To pursue the objectives given above, the following National Socio-Demographic Goals to be achieved in each case by 2010 are formulated:

(1)Address the unmet needs for basic reproductive and child health services, supplies and infrastructure.

(2)Make school education up to age 14 free and compulsory and reduce drop outs at primary and secondary school levels to below 20 percent for both boys and girls.

(3)Reduce infant mortality rate to below 30 per 1000 live births. (Infant mortality rate - Probability of dying between birth and exactly one year of age expressed per 1,000 live births.)

(4)Reduce maternal mortality ratio to below 100 per 100,000 live births. (This is derived as the proportion of maternal deaths per 100,000 live births reported.)

(5)Achieve universal immunization of children against all vaccine preventable diseases.

(6)Promote delayed marriage for girls, not earlier than age 18 and preferably after 20 years of age.

(7)Achieve 80% institutional deliveries and 100% deliveries by trained persons.

(8)Achieve universal access to information/counseling, and services for fertility regulation and contraception with a wide basket of choices.

(9)Achieve 100 percent registration of births, deaths, marriage and pregnancy.

(10)Contain the spread of Acquired Immuno deficiency syndrome (AIDS), and promote greater integration between the management of reproductive tract infections (RTI) and sexually transmitted infections (STI) and the National AIDS Control Organization.

(11)Prevent and control communicable diseases.

(12)Integrate Indian Systems of Medicine ISM in the provision of reproductive and child health services and in reaching out to households.

(13)Promote vigorously, the small family norm to achieve replacement levels of TFR.

(14)Bring about convergence in implementation of related social sector programs so that family welfare becomes a people centered programme.

Year MMR
1997-98 398
1999-2001 327
2001-03 301
2004-06 254
Source: Planning commission

Evaluation of National Population Policy.


  1. Fall in Birth rate: The Birth rate has declined from 24.8 per thousand population in 2003 to 22.5 in 2009.
  1. Fall in infant mortality rate: The infant mortality rate has decreased to 50 per 1000 live birth in 2009 from 66 in 2001.
  1. Decline in Total fertility rate: The TFR rate was 3.1 in 2001 which declined to 2.6 in 2009.
  1. Decline in Child mortality Rate: The Child mortality rate declined from 26.5 in 1991 to 15.2 in 2008.


1.Dominance of the bureaucracy: The dominance of bureaucracy is concerned with only technical matters, the need is for people’s movement which can change the mindset of the society to go for small family norm.

2.Wide spread corruption: The incentives provided for this policy is mostly in cash. This has resulted in wide spread corruption. No provision has been made to administer the incentives in a way that ensures their effective use. But like other policies the implementation is weak.

3.Insufficient remedy: The programme organizers have adopted a policy of population which simply drift from one solution to another but each is not sufficiently working.

4.Undue emphasis on Terminal method: The policy is giving undue emphasis only to Terminal method rather than spacing methods IUD’s and orals have been seriously and unnecessarily neglected.

5.Expensive contraceptives: The most important obstacle is the lack of in expensive contraceptive method. The recent family planning survey shows that about 25 million couples in the reproductive age group, who does not want children but are not using contraceptives.

6.Cafeteria services: The programme offers a cafeteria services. But instead of the super-market approach offering a range of contraceptives method through adversity of delivery channels the programme has usually looked like a small village shop offering the bargain of the season: first the IUD, than vasectomy, now tubectomy and so on.

7.Lack of interpersonal communication: It is seen that mass communication can only in form it cannot reach upto people. So talking about Nirodh or Mala or Saheli or Morning After on T.V. can do work for informing but cannot make people use them. Something should be done to motivate them to use them.


Poverty can be defined as in which a section of the society is unable to fulfil even its basic necessities of life.

Poverty is like a plague which affects all parts of the world. If substantial portion of society is deprived of minimum level of living than it is called as mass poverty. The concept of poverty differs for different countries. The average persons level of living in USA and India would be different. And the reason behind this poverty is multidimensional.

1. Absolute poverty

2. Relative poverty

Absolute poverty: It is defined as a phenomenon when a section of the society is unable to get even its basic necessities of life and thereby it is unable to have a minimum level of living. Thus it is in terms of some absolute minimum standard of living. The minimum standard of living can be expressed in terms of minimum income level or minimum consumption expenditure.

Relative poverty: It refers to the phenomenon when the income for consumption expenditure of a section of the society is distinctively below the average income level of the society. It refers a situation of falling behind most other members of the community. It is related to distribution of income or distribution of consumption expenditure in the society.

Concept and Measurement of poverty in India:

To find out the extent of poverty and measure the number of poor in the country, the economists use the concept of poverty line. The poverty line indicates the income level which is just sufficient to buy the basic minimum quantity of food required.

There have been three accepted methods in use for estimating the incidence of poverty in India. These are

(a)Planning commission methodology

(b)The Expert Group methodology

(c) The modified methodology

  1. Planning Commission Methodology.

The Planning Commission which is the nodal agency for estimating the number and proportion of people living below the poverty line at national and State levels, separately for rural and urban areas, makes poverty estimates based on a large sample survey of household consumption expenditure carried out by the National Sample Survey Organization (NSSO) after an interval of approximately five years.

The Planning Commission has defined the poverty line on the basis of recommended nutritional requirements of 2435, rounded as 2400, calories per person per day for rural areas and 2,095 rounded as 2100 calories for urban areas. The calorie intake is converted to a monthly per capita consumption expenditure of Rs. 49.1 and Rs. 56.6 for rural and urban respectively on all India basis at 1973-74 prices. Based on this methodology the planning commission, estimated the percentage of population below the poverty line for the country as 48.3% for 1977-78, 34.7% for 1983-84 and 25.5% for 1987-88. These shows decline in percentage of people below the poverty line over a period of more than a decade.

While the estimation of poverty at national and State levels, separately for rural and urban areas, is done by the Planning Commission, the Ministry of Rural Development has been conducting the BPL census to identify individual households below the poverty line in rural areas while ensuring that the total number of such households corresponds to the Planning Commission estimates. The methodology of estimating poverty and the identification of BPL households have been a matter of debate. Two committees under the chairmanship of Prof. Suresh D. Tendulkar and Dr. N.C. Saxena have submitted their reports on methodology for estimation of poverty and methodology for conducting BPL census in Rural areas, respectively. Further, an expert Group under the chairmanship of Prof. S.R. Hasim has been set up to recommend methodology for identification of BPL families in urban areas.

Percentage of Population below Poverty Line at 1973-74 prices

Year PC
1977-78 48.3
1983-84 34.7
1987-88 25.5
1993-94 16.8
1999-2000 (30 day recall)
( 7 day recall)
  1. Expert Group Methodology:

In September 1989, the planning commission constituted an Expert Group (Lakdawala Committee) to review the methodology and the estimates of poverty as given above. They recommended.

(1)To continue the use of the NSS aggregate private consumption expenditure data to compute level at a monthly total expenditure of Rs. 49.1 and Rs. 56.6 for rural and urban areas respectively at all India level.

(2)The Expert group recommended continuing base of 1973-74 to estimate the poverty line.

(3)For updating poverty line to the current price in a year, the state-specific consumer price index has to generated.

(4)To use the consumer price index for agricultural labourers in the case of rural population and the average consumer price index for industrial workers and the consumer price index for urban non-manual employees in the case of urban population as deflators to estimate the population below the poverty line. The Export group submitted its report in July 1993 and estimated 51.8% of population below the poverty line for 1977-78, 44.8% for 1983-84 and 39.5% for 1987-88 as shown in the Table. These estimates reveal that the percentage of people below the poverty line in these years was much higher than the estimates of planning commission.

Year EG
1977-78 51.8
1983-84 44.8
1987-88 39.5
1993-94 36.3
1999-2000 (30 day recall)

( 7 day recall)

  1. (MEG) Modified Expert Group: This estimate of the poverty line for 1987-88 and 1993-94 by undertaking a “slight simplification” of the Expert group methodology in MEG, the planning commission used only the consumer price index for industrial workers for estimating and updating the urban poverty line. The estimates according to MEG poverty line for 1987-88 as 38.9% and for 1993-94 as 36%. This shows that people below poverty line in 1993-94 was more than double the planning commission estimates even under MEG formula.

Year MEG
1987-88 38.9
1993-94 36.0
1999-2000 (30 day recall)

( 7 day recall) 23.3
II. Expert Group 1993 (Official)
Poverty Ratio (%) Number of Poor (million)
Rural Urban Total Rural Urban Total
1993-94 37.3 32.4 36 244 76.3 320.4
2004-05 28.3 25.7 27.5 220.9 80.8 301.7
  1. Planning commission estimates 1993-94 and 1999-2000 estimates

The Commission has been estimating the poverty line and poverty ratio since 1997 on the basis of the methodology spelt out in the report of the Expert Group on 'Estimation of Number and Proportion of Poor' (known as Lakdawala Committee Report). On the basis of NSS 61st Round (July 2004 to June 2005) consumer expenditure data, the poverty ratio is estimated at 28.3 per cent in rural areas, 25.7 per cent in urban areas, and 27.5 per cent for the country as a whole in 2004-05 using uniform recall period (URP). In URP, consumer expenditure data for all the items are collected for a 30-day recall period. Based on mixed recall period (MRP) for the same period, the poverty ratios are 21.8 per cent in rural areas, 21.7 per cent in urban areas, and 21.8 per cent for the country as a whole. In MRP, consumer expenditure data for five non-food items, namely clothing, footwear, durable goods, education, and institutional medical expenses, are collected for a 365-day recall period and the consumption data for the remaining items are collected for a 30-day recall period. The poverty estimate in 2004-05 based on URP consumption (27.5) is comparable to that of 1993-­94 (36). The poverty estimates in 2004-05 based on MRP consumption (about 21.8) is roughly (but not strictly) comparable to that of 1999-2000 (26.1). Table shows the comparable poverty estimates based on the URP and MRP methods.

Year Poverty Ratio
  Rural Urban Total
  (%) (%) (%)
1973-74 56.4 49.0 54.9
1977-78 53.1 45.2 51.3
1,983 45.6 40.8 44.5
1987-88 39.1 38.2 38.9
1993-94 37.3 32.4 36.0
1999-2000 27.1 23.6 26.1
12004-05 (UniformReference Period) 28.3 25.7 27.5
22004-05 (MixedReference Period) 21.8 21.7 21.8
1- Comparable with 1993-94 estimates 2- Comparable with 1999-2000 estimates

  1. World Bank Estimate

The global poverty numbers for the developing world between 1981 and 2005 has a major update. The most commonly used definition of global poverty is the absolute poverty line set by the World Bank. Poverty is set at an income of $ 2 a day or less and extreme poverty is set at 1$ a day or less. The line was first created in 1990 when the World Bank published its World Development Report and found the most developing countries set their poverty lines at $ 1 a day. The $ 2 mark was created for developing nations with slightly better income levels than their $ 1 a day counter parts. More develop countries are permitted to set their poverty lines elsewhere (it would be silly to assume a statistically significant group of people in the U.S. made less than $ 1 a day). For Highly industrialized countries such as Britain, Japan and the U.S. the absolute poverty line is usually set higher (for e.g. the line has been set at $ 14.40 in the past). The 2005 poverty line for single individuals in the United States is set at $ 26.19 a day.

But India has had a significant success in reducing the number of the poorest of its poor - those living on less than a dollar a day. The number of people living below a dollar a day is down from 296 million in 1981 to 267 million people in 2005.

The World Bank has recently revised its measurement of world poverty to US $ 1.25 a day. If the poverty line is set at US $ 2.00 a day, this number rises to 2.09 billion. These are absolute poverty lines.

According to new estimates, the number of poor below $ 1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This is the biggest challenge facing India today.

  1. Tendulkar Committee Estimates:

The Tendulkar Committee has been set up after the March 2009 National Development Council Meeting to look into the methodology for estimating poverty, because there was wide spread criticism that the planning commission was producing unrealistically low poverty estimates. The official claims of poverty reduction were based on an incorrect method of poverty estimation and in reality; poverty has been rising under reforms on both rural and urban areas with the rural situation worsening more. The official planning commission poverty estimates using the same consumption spending data however were very low, only 28.3% rural and 25.7% urban in 2004-05. The public was not informed that the commission had quietly abandoned its own declared nutrition norms long ago in actual practice, and its low poverty, estimates were possible only by taking such unrealistically low poverty lines that the nutritional levels limit permitted by 2004-05 was only 1820 calories rural and 1795 calories urban far below its own stated norm.

Although the committee has not relied on calorie based norms, it has quantified the calories implication of new poverty line proposed by it. According to Tendulkar committee the urban poverty line is at Rs. 579 monthly per capita expenditure and for rural areas it is Rs. 447 monthly per capita expenditure.

  I. Expert Group 2009 (Tendulkar)
  Poverty Ratio (%)     Number of Poor (million)    
  Rural Urban Total Rural Urban Total
1993-94 50.1 31.8 45.3 328.6 74.5 403.7
2004-05 41.8 25.7 37.2 41.8 25.7 37.2
  1. Saxena Committee Report to Review the Methodology for Conducting BPL Census in Rural Areas

An Expert Group headed by Dr N.C. Saxena was constituted by the Ministry of Rural Development to recommend a suitable methodology for identification of BPL families in rural areas. The Expert Group submitted its report in August 2009 and recommended doing away with score-based ranking of rural households followed for the BPL census 2002. The Committee has recommended automatic exclusion of some privileged sections and automatic inclusion of certain deprived and vulnerable sections of society, and a survey for the remaining population to rank them on a scale of 10.

  1. Expert Group (S.R. Hashim Committee) on the Methodology for Identification of BPL Families in Urban Areas.

The Ministry of Housing and Urban Poverty Alleviation (HUPA) is the nodal Ministry for issue of guidelines to identify BPL families in urban areas. Till now, no uniform methodology was being followed by the States/UTs to identify the urban poor. An Expert Group under the Chairmanship of Professor S.R. Hashim has been constituted by the Planning Commission to recommend the methodology for identification of BPL families in urban areas. The Expert Group is expected to submit its report shortly.

Incidence of Poverty

From 1951 to 1974, India’s first quarter-century of independence, the percentage of its population living in poverty rose from 47 to 56 percent. During the next quarter-century, that rate fell sharply, reaching 26 percent by 1999–2000. Between 1974 and 1999-2000, the poverty rate fell by 53%, exceeding the millennium development goal of a 50% reduction over a 25-year period. In headcount terms, the number of poor people rose steadily from 171 million in 1951 to a 321 million in 1974, before falling to 260 million in 1999-2000. It is important to analyze the experience since 1974 with poverty reduction, identify trend factors, examine the quality of the poverty estimates, and place the post-1974 period outcome in the longer term perspective of poverty trends in India. Incidence of Poverty provide background on Indian poverty measurement and on trends in the period before the decline in Indian poverty and present poverty trends during the period studied, as described by official statistics; report experts, conclusions on the reasons behind the trends.

The NSS data were available annually till 1973-74. Between 1972-73 and 1993-94 live quinquennial large sample surveys were carried out in July-July (50th Round) Thereafter there conducted four sample surveys (51st to 54th Rounds). During July 1999 June 2000 (55th Round) NSSO carried out and 61st Round on 2004-05.

  1. Earlier Estimates 1960s

The estimates of poverty in India provided by Minhas, Ahluwalia, Bardhan, and Dandekar and Rath are quite old land actually do not indicate exactly the same incidence of poverty.The table shows the results,

Estimates of poverty

Year Size of population in Millions Percentage of rural population in poverty
Ahluwalia Minhas Ahluwalia Minhas
1956 – 57 181 215 54.1 65
1957 – 58 171 212 50.2 63.2
1960 – 61 141 211 38.9 59.4
1961 – 62 146 206 39.4 56.4
1963 – 64 171 221 44.5 57.8
1964 – 65 184 202 46.8 51.6
1967 – 68 235 210 56.5 50.5
1968 – 69 217 51
1970 – 71 210 47.5
1973 – 74 241 46.1

Source complied from M. Ahluwalia, the Journal of Development Studies (1977) and B.S. Minhas, planning and the poor.

The table shows that according to Ahluwalia and Minhas the poverty in 1956-57 was 181 millions and 215 millions which according to Ahluwalia increased to 235 millions and decreased to 210 millions according to Minhas in 1967-68. The percentage of rural population in poverty according to Ahluwalia and Minhas in 1956-57 54-1% and 65.0% which increased to 56.5 in 1967-68 according to Ahluwalia and decreased to 50.5 according to Minhas. According to Bardhan in 1967-68 the incidence3 of poverty in rural India was 54% and Dandekar and Rath (1968-69) was 40.0%.

  1. Estimates for 1973-74 to 1998.

These estimates are available primarily on the NSS consumption expenditure data available for this period.

(1)The Planning Commission’s Estimates (Official Methodology)

(2)The Planning Commission’s Estimates (Expert Group Methodology)

(3)The Planning Commission’s Estimates (Official Methodology)

This was based on the ‘physical survival’ concept of the poverty line i.e. based on minimum nutritional requirement of 2400 calories per person per day in rural area and 2100 calories per person in urban areas, which is converted to a monthly per capital consumption expenditure of Rs. 49.1 and Rs. 56.6 for rural and urban population. Based on this methodology, the planning commission estimated poverty for several years during period from 1977-78 to 1994-45. This had shown decline in poverty.

Year Planning Commission
1977-78 48.3
1983-84 34.7
1987-88 25.5
1993-94 16.8
  1. The Planning Commission’s Estimates – Expert Group Methodology.

In September 1989, the Planning Commission constituted an Expert Group (Lakdawala Committee) to review the methodology. It has used the NSS aggregate private consumption expenditure of monthly total expenditure of Rs. 49.1 and Rs. 56.6 for rural and urban areas and used consumer price index for agricultural labourers in case of rural population and average CPI for industrial workers and urban non-manual employees in case of urban population to estimate population below the poverty line. The Planning Commission’s estimate of poverty based on Export Group Methodology shows a higher incidence of poverty as compared to its estimates based on official methodology.

Year Expert Group
1977-78 51.8
1983-84 44.8
1987-88 39.5
1993-94 36.3

The EG estimated 51.8% population below the poverty line which declined to 36.3% in 1993-94 which is still higher than official methodology of planning commissioner.

Some other estimates.

  1. Gaurav Datt and Martin Ravallion

In their paper “Regional Disparties, Targeting and poverty in India (1989) developed the concept of poverty gap along with the poverty line. The authors have also used Rs. 89 as the poverty line. The study has used rural interstate price relatives (ratio of rural prices in states to all India prices) for 1973-74 constructed by Bhattacharya updated to 1983 using CPI. According to this study, 43.9 percent of the population was below poverty line in 1983 out of 40% in urban population and 45% of rural population. In addition to this, the paper measured poverty gap as the distance from the poverty line of average consumption expenditure of the poor in each state as a proportion of the National poverty line. The weighted co-efficient reveal that poverty gap is relatively greater in rural areas i.e. 12.70 than in urban areas, i.e. 10.94.

Poverty gap = Z-4


Z = poverty line

Y = average consumption expenditure of poor in each state.

The poverty gap reflects the depth of poverty as well as its incidence.

  1. Gaurav Datt’s study on poverty.

Gaurav Datt of the World Bank has made a study of poverty in India for the period 1951-1992 using NSS data of 2400 calorie food for rural areas and 2100 calories for urban areas which implies per capital expenditure of Rs. 49 as rural poverty line and Rs. 57 for urban poverty line at 1973-74 prices using all India (PI the study reveals that between 1951-52 and 1991-92 the national head count index of poverty declined from about 53% to 38%. But the absolute numbers of poors have increased from 199 million in 1951-55 to about 323 million in 1991-92)

Heat count ratio represents number of poor upon the poverty line. Number poor means individuals with consumption expenditure less than poverty line. It can be written as

Head count ration = M


M = number of poor

Z = poverty line

Poverty estimates based on 55th Round of the NSSO

In the 55th Round, the NSS organization used the consumer expenditure data on a 30 day and 7 day recall basis from the same households with 365 day as reference period. The schedules were filled by asking the respondents about their consumption for the past 30 days all sample household were put both 30 day and 7 day questions. The NSSO completed the 55th round, which was a large sample covering the period July 1999 to June 2000. The figures are shown

Poverty estimates based on 55th round
(Year 1999-2000) Percent
Reference Period All India Rural Urban
30 day recall 26.1 27.9 23.62
7 day Recall 23.33 24.9 21.59

The two sets of poverty estimates based on 55th Round of NSSO are not comparable with earlier estimates of poverty due to the change in Methodology of data collection.

  1. Poverty Estimates based on 61st Round of the NSSO.

There was one more method used to estimate poverty ratio in the 61st Round i.e. Mixed Recall period. In this method consumer data expenditure for 5 non-food items, namely clothing, foot wear, durable goods, education and institutional medical expenses, were collected from a 365 days recall period. Second, consumption expenditure data for all items except these 5 non-food commodities was collected for a 30 day recall period. The table shows the estimated poverty for both uniform recall period method and mixed recall period method according to 61st Round of NSSO.

Poverty alleviation programmes:

  1. Pradhan Mantri Gram Sadak Yojana (PMGSY)

The PMGSY, was launched to provide road connectivity to 1.6 lakh unconnected habitations with population of 500 persons or more (250 in case of hilly, desert and tribal areas) in rural areas by the end of the tenth plan period. It was being executed in all the States and six UT’s. Launched on December 25, 2000 as a 100 per cent Centrally Sponsored Scheme (CSS), the primary objective of PMGSY is to provide all-weather connectivity to all the eligible unconnected habitations in the rural areas. The programme is funded mainly from the accruals of diesel cess in the Central Road Fund. In addition, support of the multilateral funding agencies and the domestic financial institutions are being obtained to meet the financial requirements of the programme. Up to March 2009, a total length of about 2,14,281.45 kilometers of road works has been completed with cumulative expenditure of Rs. 46,807.21 crore.

  1. Indira Awaas Yojana (IAY)

This scheme aims at providing dwelling units, free of cost, to the poor families of the Schedule castes, Scheduled Tribes, freed bounded labourers and also the non- SC/ST persons below the poverty line in rural areas. The objective of IAY is to provide financial assistance for construction/ up gradation of houses to BPL rural households belonging to the Scheduled Castes and Scheduled Tribes, freed bonded labourers, non- SC/ST rural households, widows and physically handicapped persons living in the rural areas. The scheme is funded on a cost-sharing basis of 75:25 between the Centre and the States. However, in the case of NE States, the funding pattern has recently been revised to 90:10. During 2008-09, against the total allocation of Rs. 5,645.77 crore earmarked for release to DRDAs under IAY for construction of 21.27 lakh houses, Rs. 8,795.79 crore including Rs. 3,050 crore given under stimulus package has been released till March 31, 2009 and 21.05 lakh houses had been constructed during 2008-09.

(c) Antyodaya Anna Yojana (AAY): AAY launched in December 2000 provides food grains at a highly subsidized rate of Rs.2.00 per kg for wheat and Rs.3.00 per kg for rice to the poor families under the Targeted Public Distribution System (TPDS). The scale of issue, which was initially 25 kg per family per month, was increased to 35 kg per family per month from April 1, 2002. The scheme initially for one crore families was expanded in June 2003 by adding another 50 lakh BPL families. During 2003-04, under the AAY, against an allocation of 45.56 lakh tonnes of food grains, 41.65 tonnes were lifted by the State/UT Governments. Budget 2004-05 expanded the scheme further from August 1, 2004 by adding another 50 lakh BPL families. With this increase, 2 crore families have been covered under the AAY.

(d) Sampoorna Grameen Rozgar Yojana (SGRY)

SGRY, launched on September 25, 2001 to provide additional wage employment in the rural areas, has a cash and food grains component. The cash-component of SGRY is funded on the same sharing basis as IAY and SGSY, while food grains are provided free of cost to the States and UTs. In 2005-06, 82.18 crore person days of employment were generated with the Centre releasing Rs. 5497.43 crore as cash component and about 37.30 lakh tonnes of food grains to the States/UTs. Besides, under the special component of the SGRY, with the States/UTs meeting the cash components, Centre released 15.64 lakh tonnes of food grains to the 11 calamity affected States. In 2006-07 up to October 31, 2006, the number of person-days of employment generated under SGRY was 18.41 crore while the Centre’s contributions in terms of cash and food grains component up to December 31, 2006 were Rs. 2,762 crore and 16.67 lakh tonnes, respectively. Under the special component, about 4.44 lakh tonnes of food grains have been released to calamity-hit States in the current year up to December 2006.

(e) DPAP, DDP and IWDP

Drought Prone Areas Programme (DPAP) was launched in 1973-74 to tackle the special problems faced by areas constantly affected by severe drought conditions. While Desert Development Program (DDP) was launched in 1977-78 to mitigate the adverse effects of desertification, the Integrated Wasteland Development Program (IWDP) has been under implementation since 1989-90 for the development of wastelands/ degraded lands. The basis of implementation of all three programmes has been shifted from sectoral to watershed basis from April 1995. So far, in 2006-07 up to January 31, 2007, 3,076 new projects covering 15.38 lakh house, 2,270 new projects covering 11.35 lakh house and 463 new projects covering 21.08 lakh house have been sanctioned under DPAP, DDP and IWDP, respectively.

(f) National Rural Health Mission (NRHM): This has been launched on April 12, 2005 with the objective of providing greater access of the rural population especially the rural poor to the public health care facilities. Major components of the programme include training of health volunteers, providing more medicines and strengthening the primary and community health centre. NRHM has an initial outlay of Rs. 6, 731 crore in 2005-06 (BE).

(g) Valmiki Ambedkar Awas Yojana (VAMBAY)

VAMBAY, launched in December 2001, facilitates construction and up gradation of dwelling units for slum dwellers, and provides a healthy and enabling environment through community toilets under Nirmal Bharat Abhiyan, a component of the scheme. The Central Government provides a subsidy of 50 per cent, with the balance provided by the State Governments/Union Territories. Cumulatively, up to March 2006, Rs. 936.63 crore had been released as Central subsidy for the construction/up gradation of 4, 58,630 dwelling units and 65,331 toilets seats. For 2006-07, Central allocation of Rs. 75 crore has been made for meeting the committed liabilities for on-going projects. VAMBAY has been subsumed in Integrated Housing and Slum Development Programme (IHSDP) launched along with Jawaharlal Nehru National Urban Renewal Mission (JNNRUM) on December 3, 2005.

(h) Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

JNNURM, which is for a seven year period from 2005-06, has two main components – Basic Services to the Urban Poor (BSUP) Programme and Integrated Housing and Slum Development Programme (IHSDP). BSUP was launched to assist cities and towns in taking up housing and infrastructural facilities for the urban poor in 63 selected cities in the country. IHSDP for taking up housing and slum up gradation programmes in non- BSUP cities were launched along with BSUP in December 2005. The allocation for JNNURM in 2006-07 (BE) is Rs. 4,900 crore.

(i) Pradhan Mantri Gramodaya Yojana (PMGY)

PMGY launched in 2000-01 envisages allocation of Additional Central Assistance (ACA) to the States and UTs for selected basic services such as primary health, primary education, rural shelter, rural drinking water, nutrition and rural electrification. For 2003-04 as well as 2004-05, the annual allocation of ACA for PMGY was Rs.2, 800


(j) National Rural Employment Guarantee Scheme (NREGS)

With the NREGS Act being passed in September, 2005, the NREGS was implemented from February 2, 2006 in 200 identified districts of the country with the objective of providing 100 days of guaranteed unskilled wage employment to each rural household opting for it. The ongoing programmes of SGRY and National Food for Work Programme (NFFWP) have been subsumed under NREGS in these districts. NREGS will cover all districts of the country within five years. The NREGS, a demand-driven scheme, has its focus on works relating to water conservation, drought proofing (including afforestation/tree plantation), land development, flood-control/protection (including drainage in waterlogged areas) and rural connectivity in terms of all-weather roads. Of the Rs. 11,300 crore allocated for NREGS in 2006-07(BE), Rs. 6,714.98 crore was released up to January 31, 2007. Till January 31, 3.47 crore job cards have been issued; and of the 1.50 crore households who have demanded employment, 1.47 crore households have been provided employment. Under the scheme, up to December 2006, of the 53.65 crore person-days of employment generated, 21.13 crore were for women; and of about 5.81 lakh works taken up, 2.34 lakh were completed.

(k) Bharat Nirman

This programme, launched in 2005-06 for building infrastructure and basic amenities in rural areas, has six components, namely rural housing, irrigation potential, drinking water, rural roads, electrification, and rural telephony. It is an important initiative for reducing the gap between rural and urban areas and improving the quality of life of people in rural areas. Rural Roads have been identified as one of the six components of Bharat Nirman and a goal has been set to provide connectivity to all villages with a population of 1000 (500 in hilly or tribal areas) with all-weather roads. New connectivity is proposed to be provided to a total of 54,648 habitations under Bharat Nirman. This will involve construction of 1,46,184 km of rural roads. In addition to new connectivity, Bharat Nirman envisages upgradation /renewal of 1,94,130 km of existing rural roads. Under the rural roads component of Bharat Nirman,\ 38,575 habitations have been provided all-weather road connectivity up to December 2010 and projects for connecting 14,995 habitations are at different stages of implementation. During 2010-11, over 28,963 km of all-weather roads has been completed up to December 2010. New connectivity has been provided to nearly 3949 habitations with an expenditure of ` 9677 crore under PMGSY.

(l) Rajiv Awas Yojana (RAY)

The Government has announced the vision of a 'slum-free India' through a new scheme, the Rajiv Awas Yojana. Subsequent to this announcement, extensive consultations have been held with various Ministries, experts, state Governments, nongovernmental organizations (NGOs), financial and urban experts, and private industry to frame the guidelines. These draft guidelines have been critically appraised by an expert committee. The preparatory phase of RAY, called the Slum Free City Planning Scheme has been implemented. Under this scheme an amount of ` 60 crore has been released to States for undertaking slum surveys, mapping of slums, developing slum information systems, undertaking community mobilization, preparation of slum-free city/ State plans, etc. before seeking support under RAY. A budgetary allocation of ` 1270 crore has been made for the preparatory phase of RAY for the year 2010-11.