Public Disclosure Authorized

Bihar
Poverty, Growth & Inequality
Bihar is the 3rd most populous state in India. It is home to over 100 million people, 36 million of
whom are poor. Bihar is one of the faster growing Low Income States. Since 2005, the pace of
poverty reduction in the state has picked up. Despite this, large parts of the state remain very poor.
Consumption inequality has remained largely unchanged. Growth is driven mainly by services,
Public Disclosure Authorized

but fluctuations in agricultural output put it at risk.

Poverty in Bihar is higher than in most states

Population below poverty line, 2012 (%)
50

40
40
37 37
35 34
33 32 32
29
Public Disclosure Authorized

30

22 22
21 20
20 19
17 17
15 15
12 12
11 11 11 10
10 9 9 8 8 8
5

0
CG JH MN AR BH OD AS MP UP AI MZ KA WB NL MH GJ TR RJ MG TN UK HR JK DL AP SK PJ KL HP GA

Low Income States are highlighted in orange, AI is All India.

Pockets of very high poverty within Bihar

Public Disclosure Authorized

District level poverty, 2012

★ Patna
Patna

Population below the poverty line,

2012 (%)

0.6-5.2
0-19
5.3-13.2
19-30
13.3-17.2
30-37
N 17.3-22.6
37-47
22.7-62.8
47-72

1 May 20, 2016

Bihar
Poverty, Growth & Inequality

The pace of poverty reduction picked up in Bihar after 2005

Population below poverty line, (%)
70

60

50

40

30

20

10

0
MN JH BH OD AR AS CG KA MH UP AI TN AP MP WB RJ GJ MG HR HP UK TR SK KL JK PJ GA NL DL MZ

● 1994 ● 2005 ● 2012

Low Income States are highlighted in orange, AI is All India.

Poverty declined in both rural and urban areas of Bihar more rapidly after 2005
Population below poverty line, (%)
70

Rural 62
60 Total
56
61

50 55

Urban
40 45 44
34
34
30
31

20

10

0
1994 2005 2012

2 May 20, 2016

Bihar
Poverty, Growth & Inequality
0 10 20 30 40 50 60 70 80

-1 AS High poverty,
declining slowly
Annual decline in poverty rate, 2005 - 2012 (%)
Growth in Bihar was faster
-3 than in most of India’s Low Income States
JH CG

12 UP
-5 UK

11 MP
KA BH
(%) (%)

-7
10 Improving WB Leading All India
OD
- 2012
2005- 2012

-9 GJ
9 Data for 19 large states and All India.
TN
HR
Low Income States are highlighted in orange.
rate, 2005

8 -11 AP MH GJ
RJ MH
growthrate,

KL KL HR
7 PJ HP Interpreting the graph
-13
BH RJ TN
OD KA
growth

6 MP CGHP

Improvement from 2005 to 2012

UK PJ
Improving Leading
-15 Low poverty,
WB Low income, High income,
Annual

5 UP
declining fast AP
high growth high growth
Annual

JH
4 -17
Lagging Weakening
AS
Lagging Weakening
3 Low income, High income,
low growth low growth

2
Standard of living, 2005
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

RealReal
GSDPGSDP per capita,
per capita, (2005
(2005 Rupees) Rupees)
All India

Bihar’s growth is driven by services, agriculture adds to its volatility

Annual growth rate, (%) Components of GSDP growth rate, (%)
20 20 20 20

15 15
15 15 6.7
6.7 5.8
10 10
4.7
10 10
6.7
5 5 2.5 6.7 5.4
4.5 4.8 2.8
7.0
5 5
0 0 5.0
0.6 3.8 0.7
3.0 3.0 2.5 2.9
1.3
-5 -5 0 0
20052006
2005 20062007
20072008
20082009
20092010
2010201120112012
2012 -2.3
-3.6 -3.8
■ Bihar GSDP ■ All India GDP -5 -5
2005 2006
2005 2006 2007
20072008
20082009
20092010
2010 20112011 2012
2012

■ Services ■ Industry ■ Agriculture

3 May 20, 2016

Bihar
Poverty, Growth & Inequality

Bihar’s poverty reduction is faster than some Low Income States

Poverty rate, 2005
0 10 20 30 40 50 60 70 80

-1 AS High poverty,
(%)(%)

declining slowly
2012

-3
2005 --2012

JH CG

UP
rate,2005

-5
MP
rate,

KA BH
-7
WB All India
in poverty

OD
in poverty

-9 GJ Data for 19 large states and All India.

Low Income States are highlighted in orange.
HR
decline

-11 MH
RJ
decline

KL
Annual

PJ
-13 TN

HP
Annual

UK
-15 Low poverty,
declining fast AP

-17

A disproportionate share of India’s poor live in Bihar

bubble size: number of poor (millions)
25

UP
(%) (%)

20
20122012
poor,

BH Data for 19 large states and All India.

poor,

15 Low Income States are highlighted in yellow.

India’s
in India’s

Interpreting the graph

What % of India’s poor lives in this state?
share in

10 MP
Stateshare

MH Share of poor > share io

n
at
of population pul
po
OD of
State

KA WB e
JH ar
5 sh
CG RJ
or
=
po
AS GJ AP of
TN ar
e Share of poor < share
HR Sh of population
KL
UK PJ
0
HP What % of India’s population lives in this state?
0 5 10 15 20 25

State share
State sharein
inIndia’s population,
India’s population, 20122012
(%) (%)

4 May 20, 2016

Bihar
Poverty, Growth & Inequality

Consumption inequality has remained stable in Bihar

Gini coefficient
0.4

0.32

0.3 0.29
0.28

0.22 0.22
0.21 0.21 0.21
0.2 0.19

0.1

0.0
Total Rural Urban

■ 1994 ■ 2005 ■ 2012

Consumption inequality in Bihar is lower than in most states

Gini coefficient, 2012
0.4

0.3

0.2

0.1
KL DL KA MH AR TN AI HR WB MP CG UP PJ HP GA UK AP GJ MZ OD JK JH RJ AS TR NL BH SK MG MN

Low Income States are highlighted in orange, AI is All India.

5 May 20, 2016