trends and dimensions

September - October 2011 Orissa Review

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Introduction:

Orissa has been one of the poorest statesamong the 15 major states in India. It shows thehighest incidence of poverty at 46.6 per cent in2004-05 among the major states in the country.The incidence of poverty has hardly changed inthe State. The overall percentage of poor hasdropped by merely 2 percentage points from48.6 per cent in 1993-94 to 46.6 per cent in2004-05. Percentage of rural poor has dropped2.9 percentage points from 49.7 per cent in 1993-94 to 46.8 per cent in 2004-05. Thus, povertyhas remained virtually invariant over a 11-yearperiod despite the fact that per capita income ofthe state has increased by 48 per cent during this

Trends and Dimensions ofRural Poverty in Orissa

Dr. R K PandaAsima Sahu

Orissa shows the highest incidence of poverty at 46.6 per cent in 2004-05 among themajor states in the country. The overall percentage of poor has dropped by merely 2percentage points from 48.6 per cent in 1993-94 to 46.6 per cent in 2004-05. Percentageof rural poor has dropped 2.9 percentage points from 49.7 per cent in 1993-94 to 46.8 percent in 2004-05.This paper deals with the trends and dimensions of rural poverty in Orissa.It shows that the trends of rural poverty are highly fluctuating over the entire period ofanalysis from 1957 to 2005 in Orissa. The incidence of rural poor is 47% and the incidenceof calorie poor is 79% in 2004-05. The vulnerable sub-groups are southern region (73%)and followed by northern region(59%), the scheduled tribes (76%) and scheduled castes(50%) across social groups, the agricultural labourers (65%) and other labourers (52%)across household type in rural areas in 2004-05.

period. The elasticity of poverty with respect toper capita income is as low as 0.084 whichindicates very little percolation of growth to thepoor in the state. This unfortunate developmentis surprising since realization of faster povertyreduction has been a main argument for highergrowth itself. In fact, incidence of poverty isrecorded a downward trend since mid-1970s atthe all-India level. It looks like the developmentexperience of Orissa is an exception among themajor states of India.

Poverty in Orissa:

Development in Orissa began in the1940s and escalated during the post

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independence era in the 1950s, with theintroduction of planned development. The statehas been operating on the assumption that thedevelopment of Orissa’s immense reserve ofnatural resources would lead to all rounddevelopment of the state and thereby also alterthe conditions of the poor. However, Orissa stillhas a very large number of poor population. Theproportion of poor in Orissa has always remainedhigher than the national average. There was notmuch decline in the state poverty in 1970s. Thedecline gained momentum in the 1980s and itseems to be negligible in the 1990s. It declinedby less than 0.3 percentage points per annum forrural Orissa. According to various PlanningCommission Reports, in Orissa 180 lakh peoplewere living below the poverty line in 1983, whichdeclined to 161 lakh in 1993-94 and it reachedat 179 lakh in 2004-05. A large reduction tookplace particularly between the period 1983 to1987. Thus, the number of poor in Orissa hasrisen after 1993-94. Table-1 shows thepercentage of poor and rural poor living in Orissafrom 1973 to 2005.

Table-1: Percentage of poor in Orissa from1973-2005

Year Total Rural

1973-74 66.2 67.3

1977-78 70.1 72.4

1983 65.3 67.5

1987-88 55.6 57.6

1993-94 48.6 49.7

2004-05 46.6 46.8

Source: Government of Orissa, EconomicSurvey, 2009-10

Table-1 shows the percentage of poor living belowthe poverty line in Orissa in total and in rural Orissafrom 1973-74 to 2004-05. Data reveals that in1973-74, 66.2 percentage of people were livingbelow the poverty line in the state, whichincreased to 70.1 per cent in 1977-78, declinedto 65.3 per cent in 1983, to 55.6 per cent in1987-88, to 48.6 per cent in 1993-94 and againdeclined to 46.6 per cent in 2004-05. Poverty inOrissa started declining after 1978; decline wasmore pronounced between 1977-78 and 1987-88 (i.e. 14.5 percentage points). Similarly, in ruralOrissa, 67.2 per cent of people were living belowthe poverty line, which increased to 72.4 per centin 1977-78, again reduced to 67.5 per cent in1983, to 57.6 per cent in 1987-88, and to 49.7per cent in 1993-94 and finally reduced to 46.8per cent in 2004-05. Between 1993-2005,poverty has declined only 2 percentage points andrural poverty has declined 2.9 percentage points.Though, poverty is reducing over the period inOrissa, the rate of reduction is not significant andthe percentage of poor is too high.

Rural poverty in Orissa is still very highafter six decades of Independence of the country.An earlier study by Mahendra Dev (1992) hadrevealed that in between 1961- 62 to 1986-87,around 65 percent of rural population in Orissawere living below poverty line instead of thequoted figure of 48.3 percent as estimated by thePlanning Commission. Dubey, A. (2002) made astudy on Calorie Consumption and NutritionalDeficiency in India: A Disaggregated Analysis from1993-94 and 1999-00. According to NSS data,there seems to be substantial differences betweenthe income/consumption measures and caloriepoverty measures. The average normative calorierequirements (which form the basis for the Indianpoverty norm), have undergone changes since itwas derived. The norm appears to have declined


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over the 1980s and 1990s. According the caloriepoverty measure, poverty in Orissa as a wholedeclined between 1993 and 1999. The trend forcoastal Orissa is similar for the two measures(decline by about 15 percentage points). But forboth the southern and northern region, the caloriemeasure shows important differences, with (a) adecline in the 2nd half of the 1990s, and (b) muchsmaller differences between coastal and otherparts of Orissa. Therefore, this paper made anattempt to study trends and various dimensionsof rural poverty in Orissa. It has divided into twoparts. First part deals with the trends of ruralpoverty from 1957 to 2005 and the second partdeals with the various dimensions of poverty inrural Orissa.

Trends of Poverty in Rural Orissa:

After the discussion of poverty scenarioin Orissa, the present paper is to study the trendsand various dimensions of rural poverty in Orissa.There are three measures of poverty i.e. (i) headcount ratio which measures the incidence ofpoverty, (ii) poverty gap which measures depthof poverty and (iii) squared poverty gap whichmeasures severity/intensity of poverty. These threemeasures over the period from 1957-58 to 2004-05 in rural Orissa based on the NSSO surveyreports are shown in the Table-2 and Figure-1.

Table-2: Trends of Poverty in Rural Orissa (1957-58 to 2004-05)

Sl. NSSO Survey Head Count Poverty Squared PovertyNo. Period Ratio Gap Index Gap Index

1 1957-58 73.18 23.18 11.122 1958-59 71.88 18.96 8.473 1959-60 69.65 19.49 7.724 1960-61 72.61 20.12 8.285 1961-62 79.84 13.90 5.916 1963-64 59.35 17.95 7.467 1964-65 69.18 18.52 7.548 1965-66 73.74 18.28 7.809 1966-67 72.31 19.00 7.9610 1967-68 74.70 19.98 8.4411 1968-69 74.43 24.30 11.0712 1969-70 79.03 22.90 10.6313 1970-71 74.12 22.17 10.1614 1972-73 74.20 23.69 10.9515 1973-74 77.05 17.66 7.1016 1977-78 72.38 20.44 8.9517 1983 68.43 16.96 7.12


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18 1986 67.53 11.95 4.4619 1987-88 58.62 11.69 3.8420 1989-90 57.64 8.45 2.4021 1990-91 51.79 5.37 1.5322 1992-93 46.39 8.19 2.5323 1993-94 49.81 11.93 3.9624 1999-00 48.13 10.77 3.4525 2004-05 46.9 12.1 4.24

Mean 66.51 16.72 6.92S.D 10.72 5.33 2.90

Source: i) The World Bank (1997), India: Achievements and Challenges in Reducing Poverty,Washington DC. And published results of NSS, New Delhi, ii) NSS Reports of different rounds

Table-2 represents the long- term fluctuation inthe three indicators like poverty incidence, povertygap index and squared poverty gap index for ruralOrissa during the period 1957-58 to 2004-05.Data reveals that the poverty ratio figures arehighly fluctuating over the entire period of analysisfrom 1957 to 2005 in rural Orissa. On the otherhand, poverty gap index and squared poverty gapindex reflect almost the same picture with different

rates of decline. The incidence was highest in1961-62 (79.84 per cent) and lowest in 1992-93 (46.39 per cent). The poverty gap was highestin 1968-69 (24.31 per cent) and lowest in 1990-91 (5.38 per cent) and squared poverty gap washighest in 1957-58 (11.13 per cent) and lowestin (1990-91). From 1957-58 to 1973-74 theincidence of poverty was very much fluctuating inOrissa. But since 1973-74 it started reducingsignificantly.

Figure-1: Poverty Trends in Rural Orissa

Source: Table-2


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The Figure-1 shows the long- term trendsin poverty indicators like poverty incidence, gapindex and squared poverty gap index for ruralOrissa from 1957-58 to 2004-05. All the threetrends of poverty are highly fluctuating over theentire period of analysis.

Dimensions of Poverty:

Poverty is a multi-dimensional concept.Here the study discussed incidence of poor andcalorie poor across regions, by different socialgroups and by different type of households in ruralOrissa. The estimation based on poor categoryrefers to Monthly Per Capita Expenditure (MPCE)below the poverty line provided by the PlanningCommission and calorie poor category refers tothose below 2400 per capita in rural areas.

Incidence of Poor and Calorie Poor by Region:

The NSSO data divides the entire Orissainto three agro-climatic regions i.e, Coastal,Northern and Southern. For that reason theanalysis is based on those regions. According toNSS data, the incidence of poor has experienceda large fall from 45 per cent in 1993- 94 to 27per cent in 2004-05 in Coastal region. Southernregion has experienced an increase in poverty by4 percentage points from 68.8 per cent in 1993-94 to 72.7 per cent in 2004-05 and the Northernregion has witnessed the biggest rise in incidenceof rural poverty by 13 percentage points from46 per cent in 1993-94 to 59 per cent in 2004-05.

Table-3: Incidence of Poor and Calorie Poorby region in Rural Orissa in 2004-05

NSS Region HCR Share

Poor Calorie Poor Calorie(%) Poor(%) (%) Poor (%)

Coastal 27.4 64.6 27.1 40.1

Southern 72.7 91.5 28.9 22.8

Northern 59.1 79.1 44.0 37.0

Source: Mishra S. (2009)

Table-3 shows the incidence of poorand calorie poor by different regions in RuralOrissa in 2004-05. Data reveals that theincidence of poor is found to be highest insouthern region (i.e. 91.5 per cent), 59 per centin northern region and 27 per cent in coastalregion of the state. Similarly, calorie poor is foundto be more in Southern region i.e. 91 per cent,79 per cent in Northern region and 64.6 percent in Coastal region of rural Orissa. The shareof poor are found to be more in northern region(44 per cent), 28 per cent in southern and 27per cent in coastal region of Orissa. It indicatesthat there exists very marginal differencesbetween southern and coastal region with regardto the share of poor. But the share of caloriepoor is more in Coastal region i.e. 40 per cent,37 per cent in Northern region and 23 per centin Southern region during 2004-05 in ruralOrissa. Thus, the incidence of poor and caloriepoor are highest in rural part of southern region.The share of poor is highest in rural part ofnorthern region and the share calorie poor ishighest in rural part of Coastal region.

Incidence of Poor and Calorie Poor by SocialGroups:

Rural poverty is also associated withsocial differentiation. Orissa has a very highpercentage of scheduled tribe population, i.e.22.13 per cent in 2001 as compared to only 8.01per cent in All-India level, while the proportion ofscheduled caste population is around the all-Indiaaverage (i.e.16.53 in Orissa and 16.33 in India).


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Table-4: Incidence of Poor and CaloriePoor by Social Groups in Rural Orissa in

2004-05

Social Group HCR Share


Scheduled Tribe 75.8 89.1 41.5 30.6

Scheduled Caste 49.9 73.5 18.7 17.3

Other Backward 37.1 69.9 31.1 36.9Castes

Others 23.5 65.3 8.7 15.2


Table-4 shows the Incidence of Poor and CaloriePoor by Social Groups in Rural Orissa in 2004-05. Data reveals that very high incidence ofpoverty prevails among the scheduled tribe andscheduled caste population in the state. The headcount ratio is as high as 76 per cent among thescheduled tribe population and 50 per cent amongthe scheduled caste population compared to 37per cent for Other Backward Caste group and23 per cent for others in 2004-05. The scheduledtribe and scheduled caste population account for60 per cent of the number of poor in the state asa whole while their share in total population isonly 43 per cent (25.6% and 17.6% of the totalrural population are scheduled tribes andscheduled castes respectively as per the NSSOestimates in 2004-05). What is more importantis the fact that proportion of scheduled triberemaining below the poverty line has increasedfrom 71 per cent in 1993 to 76 per cent in 2004.There is no change in poverty percentage amongscheduled caste population between 1993 and2004. The two percentage points fall witnessedin poverty ratio for the entire population is

exclusively due to fall in ‘other backwardcategories and Others’ categories.

Similarly, the poverty in terms of calorieintake is very high among these backward castepeople. The head count ratio is 89 per cent amongthe scheduled tribe population, 73 per cent amongthe scheduled castes population, 70 per centamong other backward castes and 65 percentamong others. The share of calorie poor is foundto be more among other backward castepopulation (36.9 per cent) followed by scheduledtribe population (30.6 per cent) rather thanscheduled caste population (17.3 per cent) andothers (15.2 per cent). Thus, incidence of poorand calorie poor are highest among scheduled tribepopulation. The share of poor found to be highestamong scheduled tribe population and caloriepoor found to be highest among other backwardcaste population in rural Orissa.

Incidence of Poor and Calorie Poor byHousehold Type:

Table -5: Incidence of Poor and CaloriePoor by Household Type in Rural Orissa in

2004-05

Household Type HCR Share


HHT-1 32.8 68.1 13.3 17.3

HHT-2 64.5 82.2 38.6 30.9

HHT-3 52.0 84.1 11.5 11.7

HHT-4 46.1 72.6 32.7 32.3

HHT-9 19.8 62.4 39 7.8



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Table-5 represents the incidence andshare of poor and calorie poor by household type.The present study is based on rural households.So it is important to see what type of householdsare falling under poverty in rural areas. In ruralareas, household type (HHT) 1 denotes Self-employed households in non-agriculture, HHT-2denotes agricultural labourer households, HHT-3 denotes other labourer households, HHT-4denotes self-employed households in agricultureand HHT-9 denotes other householdsrespectively.

Understandably, agricultural labourerhouseholds and other labourer households in ruralOrissa have a greater incidence of poor (i.e. 64per cent and 52 percent respectively) and caloriepoor (i.e. 82 per cent and 84 per centrespectively) in 2004-05. But the percentage ofpoor and calorie poor are more among theagricultural labourer households (38.6 per centand 30.9 per cent respectively) and self-employedhouseholds in agriculture (32.7 per cent and 32.9per cent respectively).

Conclusion:

To sum up, Orissa has been one of thepoorest states in India. Poverty reduction has notbeen impressive in the state especially ruralpoverty which is a matter of concern. In Orissa,between 1993 to 2005, the number of poor hasincreased though there is very small decline inpercentage of poor. The trends of rural povertyare fluctuating over the entire period of analysisfrom 1957 to 2005 in Orissa. Incidence and shareof poor are highest among scheduled tribepopulation and incidence of calorie poor is highestamong scheduled tribe population but the shareof calorie poor is highest among other backwardcaste population in rural Orissa. Region-wise, the

incidence of poor and calorie poor is highest inrural part of southern region followed by northernregion. The share of poor is found to be highestin rural part of northern region and calorie poor ishighest in rural part of Coastal region. Amongdifferent type of households in rural Orissa, theshare of poor and calorie poor are highest amongthe agricultural labourer households and self-employed households in agriculture.

References :

� Dubey, A. (2002), ‘Calorie Consumption andNutritional Deficiency in India: A DisaggregatedAnalysis (1993-94 and 1999-00)’, Draft paper.

� GOO (2008), Economic Survey 2007-08, Departmentof Economics and Statistics.

� Mahendra, Dev. S. (1992), “Rural Poverty of India:Incidence, Issues, and policies”, AsianDevelopment Review, Vol. 10, No.1.

� Panda M (2008), “Economic Development in Orissa:Growth Without Inclusion?”, IGIDR,WP-2008-025.

� Mishra S. (2009), “Poverty and Agrarian Distressin Orissa” IGIDR, WP-2009-006.

� World Bank (1997), ‘India, Achievements andChallenges in Reducing Poverty’, Report No.16483-IN, May 27, Country Operations, Industry& Finance Division, Country Department II, SouthAsia region.

Dr. R.K. Panda, Former Professor of Economics, P.G.Department of Analytical and Applied Economics, UtkalUniversity, Bhubaneswar.

Mrs. Asima Sahu, C/o -Jayadeva Sahu, P.A. to DirectorDirectorate of Economics & Statistics Heads of Deptt.Bldg., 4th Floor, Bhubaneswar-751001, E-mail:[email protected].

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