Poverty ratio 32.75% in rural areas against 8.81% in urban: NITI report

Urban areas, by all accounts, have skimmed off the fruits of development at least during 2015-16, the year of the National Family Health Survey (NFHS), on which the NITI Aayog’s multidimensional poverty report is based.

While 25.01 per cent of the population was multidimensionally poor in the country, the poverty ratio was as high as 32.75 per cent in rural areas during that year. This was against 8.81 per cent of the population in urban areas.

The pattern was the same in states and Union Territories in varying degrees -- a greater proportion of the poor in villages than in urban areas -- except for Delhi, which is predominantly a city state. 

The report surveyed 175,946 households in urban areas and 425,563 households in rural parts.

Taking a household as comprising five members, there were 874,730 people surveyed in urban areas and 2.22 million in rural areas that year.

The population of India stood at 1.31 billion in 2015, according to World Bank statistics. Of this, 67.22 per cent were in rural areas and the rest in urban parts.

Extrapolating the multidimensional poverty as given by the NITI Aayog would mean that a bit over 288 million people in rural areas and close to 38 million in urban areas were poor in 2015. 

There is no way to compare the multidimensional poverty ratio given in the report with earlier years since it was the first such report.

However, the difference between the poverty ratio in rural and urban areas was not as stark if one looks at the report of the erstwhile Planning Commission and a panel headed by C Rangarajan, who was chairman of the Prime Minister’s Economic Advisory Council.

The earlier Tendulkar method of poverty showed the proportion of the poor in the rural population declined to 25.7 per cent from 33.8 per cent, while that in the urban population came down to 21.9 per cent from 29.8 per cent between 2009-10 and 2011-12. The Tendulkar method took those spending less than Rs 33 a day in urban areas and Rs 27 a day in the rural areas as poor. This had triggered controversy.

The Rangarajan-led panel came up with another report. According to it, the poor constituted 30.9 per cent of the rural population during 2011-12 against 39.6 per cent during 2009-10.

On the other hand, the urban poverty ratio fell to 29.5 per cent from 38.2 per cent over this period. The report took a person spending less than Rs 47 a day in cities and below Rs 32 a day in villages as poor.

This poverty line approach was abandoned by the NITI Aayog, which replaced the Planning Commission on January 1, 2015.

The current report calculated the ratio on the multidimensional poverty index, which is based on three dimensions -- health, education, and standard of living -- with each having a weighting of one-third in the index. These dimensions are further based on 12 segments -- nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank accounts.

The Aayog has clarified the NHFS for 2015-16 preceded the full roll-out of flagship schemes of the Pradhan Mantri Awas Yojana, Jal Jeevan Mission, Swachh Bharat Mission, Pradhan Mantri Sahaj Bijli Har Ghar Yojana, Pradhan Mantri Ujjwala Yojana, and the Pradhan Mantri Jan Dhan Yojana.