Search the Internet          Tips  Sites: Finance, Investment

Panel predicts decline in poverty

Mamata Singh

If the macroeconomic and sectoral projections for the Tenth Plan (2002-07) are achieved, the poverty ratio in India should fall to 19.2 per cent by 2007, according to the Planning Commission. The ratio was 36 per cent in 1993-94.

While urban poverty is expected to drop to 14.6 per cent, rural poverty is projected to fall to 21 per cent from the levels of 32 per cent and 37 per cent respectively, in 1993-94.

The poverty projections for the next Five-Year Plan worked out by the Plan panel, however, show that 90 per cent of the poor will be concentrated in eight states: Bihar, Madhya Pradesh, Orissa, Uttar Pradesh, West Bengal, Assam, Maharashtra and Rajasthan.

The all-India GDP growth target of more than 8 per cent, accompanied by high agricultural growth in Haryana, Himachal Pradesh, Goa, Gujarat, Punjab and Delhi, should make the poverty levels negligible in these states, the study has stated. Keeping in mind the migration factor from relatively poorer states to these prosperous ones, it has projected a poverty level of 2 per cent in these states by 2007.

While the poverty level in Bihar is expected to fall from 55 per cent in 1993 to 43 per cent in 2007, the rural poverty level is expected to go down from 58 per cent to 45 per cent. This will be contingent on Bihar achieving a 6.4 per cent growth in its gross state domestic product over this period.

The study concludes that every Rs 1,000 increase in annual real per capita gross state domestic product leads to a 1.6 percentage point reduction in the poverty ratio in rural areas and 2 percentage point reduction in urban poverty.

Madhya Pradesh is expected to achieve a sharper fall in poverty, with the number of people below the poverty line projected to go down from 42.5 per cent in 1993 to 30 per cent by 2007.

The poverty projections have been worked out on the basis of per capita income in the states and the number of people below the poverty line, agricultural yield and per capita plan expenditure incurred by the state. The last variable has been included on the basis of the assumption that government expenditure in India is driven, at least partly, by poverty considerations.

In the case of Orissa, the percentage of people below the poverty line is expected to go down from 48.6 per cent in 1993 to 41 per cent in 2007. In Uttar Pradesh, it will fall from 40.85 per cent to 24.68 per cent, provided the state achieves a GSDP growth of 7.6 per cent and an agricultural sector growth of 4.67 per cent.

While the plan body estimated GSDP growth rates for the three newly created states of Jharkhand, Chhattisgarh and Uttaranchal, it did not make any poverty projections, because the base levels of poverty were not available for them.

Powered by

ALSO READ:
The Rediff Budget Special
The Rediff-Business Standard Special
Money

Tell us what you think of this report