StatsGuru-26-March-12

In the continuing uproar about the recently released poverty statistics, too much attention has focused on the exact definition of who counts as poor. But, as Table 1 shows, that definition is continually tweaked. When the Tendulkar approach — which moved away from focusing just on whether people were getting enough to eat, to whether they had access to other basic goods and services — was introduced, the percentage of people classified as under the poverty line jumped. That did not, of course, mean that people were suddenly made much poorer. Indeed, as Table 1 shows, that number has been steadily decreasing — but much more sharply in the past decade.

Some states have done particularly well over the past five years, as shown in Table 2. Maharashtra, Tamil Nadu and, surprisingly, Odisha are standout performers. On the other hand, Nitish Kumar’s Bihar has shown little improvement, doing much worse over the past five years than, for example, Mayawati’s Uttar Pradesh. Table 3 reveals that it bucked the national trend by registering a substantial increase in the number of residents under the poverty line.

One demonstration of the fall in abject poverty, and a reminder of the usefulness of the Tendulkar re-evaluation of the nature of poverty, is in Table 4: The proportion of income spent on food as compared with other items has fallen across the board — but most spectacularly in urban areas over the past 10 years. Remember, this is in spite of sustained food inflation.(Click here for tables)

What explains the historic decline in poverty? The UPA will point to the vast increase in social-sector expenditure in its tenure (Table 5). But much of the credit clearly belongs to GDP growth (Table 6), the spike in which corresponds closely to the period of greatest decline in poverty.