India's Common People: Who Are They, How Many Are They and How Do They Live?

Author(s): Arjun Sengupta, K. P. Kannan, G. Raveendran Reviewed work(s): Source: Economic and Political Weekly, Vol. 43, No. 11 (Mar. 15 - 21, 2008), pp. 49-63 Published by: Economic and Political Weekly Stable URL: http://www.jstor.org/stable/40277257 . Accessed: 23/02/2012 09:17
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India's Common People: Who AreThey, How ManyAreTheyand How Do TheyLive?

ARJUNSENGUPTA,K P KANNAN,G RAVEENDRAN

Thispaperattempts define commonpeople of to the Indiainterms levelsofconsumption examines and of of in their socio-economic periods time profile different sincetheearly 1990switha viewto assessinghow the lives. economic processhas impactedon their growth Thefindings shouldworry Despitehigh everyone. are of morethanthree-fourths Indians poorand growth, not vulnerable witha levelofconsumption morethan of line. Thisproportion the twicetheofficial poverty as whichcan be categorised the"common population socialgroups, among certain people"is muchhigher for especially scheduledcastesand scheduledtribes.

is is There also evidenceto suggestthatinequality betweenthecommonpeople and the widening of better-off sections society.

to is alwaystheendeavour anydemocratic of government lead toan accelerthat economic socialpolicies its and ensure of ated improvement the welfareof the commonpeople. Economicgrowthtakenas the growthof the gross domestic as in desirable thiscontext itwill estab(gdp) is highly product of in lish the pre-eminence the country the worldeconomy, increaseinvestfor a provide largemarket goods and services, all inflows from overtheworldand allow mentand technology to in improvement incomeand employment thepeople,even if for and for of notuniformly all sections thepopulation notevenly It of all regions the economy. could also, withproper policies, condiin and facilitatesubstantial rapidimprovementtheliving a of and promotion livelihoodof the masses whom we tions, the consider common alone,however, growth people.Economic unlesssupplemented other cannotensuresuch an objective by measures targeteddirectlyat policies and complimentary of effect of the promoting welfare themasses.The trickle-down forces Market and too wouldbe often meagre toodistant. growth thosewho have market almostinvariably powerand promote thepoorand themoften economic bypasses by powered growth of who thevulnerable aretheoverwhelming majority ourpeople. and of the successand failure all our programmes Ultimately, will economicgrowth, those forpromoting polices including this havefulfilled basic of in havetobe reckoned terms howthey of thewelfare thecommon of people. objective improving

1 Introduction
the is The first step in makingsuch an assessment to identify - who the whocan be considered common of people group people whatlevel of is are, profile interms socialgroups, they whattheir and what their and employment of consumption theyhave, etc. In of are endowments in terms education, health, housing, to definethe so-called has this paper an attempt been made "common people"- or the'aam aadmi' in popularparlance in their socio-economic and of terms levelsofconsumption examine in periodsof timesincetheearly1990s witha profile different has howtheeconomic viewtoassessing process impacted growth after and lives.In thispaperwe present discuss, on their dealing on the dataandmethodology, mainfindings themagnitudes with whom of and changesin thecondition thepoorand vulnerable, socialgroups with we call thecommon people,as wellas itslinks characteristics The attainments. household educational andtheir in of and consumption poverty pattern thehouseholds different are also remarks statusgroupsalong with some concluding included.While our analysiscoversthe threetime pointsof
49

at of Themainfindings thispaperwerepresented theInternational Identification Issue:Measurement, the on Seminar Revisiting Poverty for and Eradication by jointly theInstitute Human organised Patna of New Development, Delhi,A N SinhaInstitute Social Sciences, 20Research andtheAsianDevelopment Patna,during Institute, July of to our 22,2007.Wewouldliketorecord thanks theparticipants the to A comments suggestions. specialthanks and for seminar their assistance. his Naikfor computational AjayaKumar for information three version thispaper, of A longer years providing 1999-2000and 2004-05),ispostedon thewebsiteof (1993-94, the journal. and K Sengupta, P Kannan(kannan.nce@nic.in) G Raveendran Arjun in for Commission Enterprises the the arewith National Sector. Unorganised
weekly (323 EconomicPolitical & march 15, 2008

SPECIAL ARTICLE

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results 1993-94, 1999-2000 and 2004-05, the quantitative hereare mainly thelatest for of2004-05.Readers presented year interested examining in the details of the two previoustime to can on points refer thelarger paperpublished theweb siteof the journal(www.epw.in).

the data sets available fromthe surveysof NationalSample and (nsso) on employment-unemployment Survey Organisation consumption expenditure.We have classifiedeach sample householdas accordingly to belonging the "extremely poor", "middleincome"and "high "vulnerable", "poor","marginal", income" if (mpce)of groups themonthly capitaexpenditure per EconomicGrowth duringPre-and Post-IndependentIndia their households belowor above a specified was of multiple the Theyears between and 2004-05weretheperiod a high poverty (pl). of line 1993-94 rate economic of in it of there considerable is criticism aboutthedetermination growth India.While is notthepurpose this Though toanalyse nature this the of itmaybe useful take ofthepoverty in India,which to line underestimates paper growth, systematically noteoftheremarkable in and we improvement ourgrowth performance poverty related deprivation, havechosennottoengagein in therecent the debatehereto avoidbeingdeflected from mainthrust the of yearswhichmaybe seen from decadal growth that of rates gdpandpercapita income inTable1. our study. Our aim hereis to construct simple a and given taxonomy The Indianeconomy entered trajectory Table 1: Decadal GrowthRates ofGDP a of of differidentify groups peoplewith significant economicgrowthfrom1980 onwards, and Per Capita Income encesinaverage level consumption. criteof The high Growth Rate(%) riafor classification, our whether therural in or compared with the previous nearly three Decades GDP Population PerCapitaIncome decades. The period 1950-80 disparagingly urban in areas,aregiven Table2. 1920-47 1.18 1.20* -0,03 referred as the years of "Hindu" rate of 1950-60 3.91 to The official estimates of poverty are 1.96 1.95 had of Commission from growth an averagerateofgrowth 3.56 1960-70 3.70 computed the Planning by 2.22 1.48 the rate 1970-80 3.08 thequinquennial consumer percentfor entire period.The growth 2.20 0.88 expenditure survey decreasedfrom 2.14 the 3.24 3.91 in the 1950s to 3.70 per 1980-90 5.38 (ces). However, analysisin thispaper is centin the 1960s and 3.08 per centbetween 1990-2000 5.58 1.93 3.65 based on consumption data as expenditure 1.70 4.29 the 1970and 1980.Although so-called"Hindu" 2000-05 5.99 reportedin the employment-unemployment rateduring 1920-47isbased on 1949 (1) GDP rateof growth from 1950 to 1980 was three (2) GDPgrowthratesinotherdecades arebased on prices. survey(eus) schedulesto enable us to relate growth 1999-2000 prices. times whatwe wouldliketo call the"Colonial" * statusofthepeople consumption expenditure rate the Population growth for period1921-51. rate growth theprevious years, fact Sources:NAS,CSOforGDPand Statistical of of the Abstract (2003), to their work and activity 30 status. thecase of In CSO for data. for 1920-47 from are population remainsthatduringthe first years after Sivasubramonian Figures theeus, data on consumption collected 30 are (2000). by India'sindependence, improvement the the in blockin whichsomemajor usingan abridged Table 2: CriteriaforClassification income hardly was between and1.95 of Households 1 items item and percapita are as groups only listed against due percent toan increasing of population growth Extremely Poor if MPCE<=0.75 poverty ces in whichconsumption each individual times thatresulted from declinein mortality. a line That (PL) itemis separately collected. Thus,theaverage ifO.75PL<MPCE<=1Pl istosayprogress madeontwofrontsaggregate Poor as from consumption expenditure computed ifiPL<MPCE<=1.25PL economic and in eus schedule expected be lowerthanthat growth reduction mortality Marginal is to if PL<MPCE<=2.0 1.25 PL offset each otherin a kindof developmental Vulnerable obtained from schedule. poverty ces The lines, Middle class if PL<MPCE<=4.0 2.0 PL that countries through. irony most determined thebasisofces therefore to on developing go had Income ifMPCE>4.0PL Group On a percapitabasis,thismeant slowpace of High a be adjusted makethem to conform thelev! to of of ofconsumption improvementwelfare thevastmassesofthepopulation. as expenditure givenbytheeus. Thiswas done As thegrowth picked from rate there was a byestimating mpcefrom distribution persons mpce the 1980 onwards, up the of by marked acceleration thegrowth percapitaincome in of contrib- classes based on eus corresponding the head countratios to utedby the doubleblessing increasing growth of the rateand obtained from ces. The difference between twoestimates the is the The economic reducing population For growth. aggregate the growth insignificant. example, official linefor poverty 2004-05is rateaccelerated further the morerecentperiod.1 in Whilethe Rs 356.3for rural areasand Rs538.6for urban areas.Thepoverty in growth it performance recent yearshas been spectacular, is linesas applicable data setsavailablefrom eus, as perour to the to it reflected the calculation, in equallyimportant assess whether has fully turn to be Rs 346.2 for out ruralareas and Rs 514.0 welfare thecommon of urbanareas. peopleso as to allow us to evaluatethe for success ourgrowth of in of Thereasonfor performance terms thebasicobjective the consumer block using abridged expenditure ofimproving welfare thevastmassesofpeople.Thisobjec- in theeus is,as mentioned the of due toourobjective linkthe to above, tivewas explicitly out in the policyof inclusive set or expenditure classes(poor/non-poor) employment work growth with and the increasing welfareof the commonpeople, of the United characteristics the workingmembersin the households. of Alliance in withthecampaign However, give in Tables 3 (p 51) and 5 Progressive government, contrast we (p 52) the relevant abouta "Shining in India", 2004. statistics obtained from detailed toshowthat difference the ces the is notsignificant thepoint interpretationourfindings. from of of 2 Data and Methodology Onthebasisoftheadjusted we the lines, haveestimated poverty In orderto evaluatethe successof our growth in averagepercapitaconsumption performance and expenditure month per per termsof welfarecharacteristics capturedby the per capita dayfor classesas defined Table2 aboveand these in 2004-05for of consumption expenditure our people, we have workedon aregiven Table3. in
5U march 15, 2008 ^^ QaS3 & Economic Political wkeki.y

- SPECIAL ARTICLE In short, theyear2004-05,thosewhohavebeenclassified for as extremely had an averagedailypercapitaconsumption poor the of (dpce) ofaboutRs 9. Similarly, group people expenditure taken poorhad dpce ofaboutRs 12,themarginal dpce of as had Rs about 15andthevulnerable dpce ofaboutRs 20. The middle a incomegroupis identified people withan averagedpce of as Rs income as with average an roughly 37 andthehigh group those dpce of Rs 93. Table 3: Average Per Capita Consumption Expenditure (2004-05) These estimates Status MPCE(Rs)DPCE(Rs) DPCE Poverty are nationwide $ (US PPP) spellingout these issues and how we have adjustedor coped withthem.

3 Changes in the Magnitude of the Poor and Vulnerable of Table4 givesa striking of profile the Indianpeople in terms their As consumption expenditure. of 2004-05,21.8 per centof Whenwe thepeoplecan be regarded extremely orpoor.2 as poor the with derivedfrom comparethisinformation the estimates there has 55throundof 1999-2000and 50throundof 1993-94, to of beensomedeclineinthepercentage peoplebelonging these growth including groupsof poor in the last 10 yearsof higheconomic averages 1 Extremely 9 [9] 1.0 269(268] poor almost the rural and urban from to22 percent.However, tablealso showsthat, 31 1.3 2 Poor 348[358] 12[12] of areas. In this 41 percentofpeople,consisting theextremely poor,poorand 3 Marginal 438 [449] 1.6 15(15] of survived an average on 4 Vulnerable 2.2 groups, expenditure lessthan 609(631] 20 [21] paperwe arepre- marginal in the Rs 15 per day per capitaconsumption 2004-05,whichbyall 5 Middle 4.0 income 1,098(1137] 37 [38] only senting 6 High income 10.2 thana miserable be as no 2,776(2879] 93(96] should regarded affording more national average counts 7 Extremely andpoor(1+2) 325(331] 11(11] 1.2 poor whoseaveragedpce was Rs 20 The or theoverall existence. vulnerable group, pic2.0 8 Marginal vulnerable and (3+4) 550(570] 18(19] turefor counthe 1.8 9 Poor vulnerable and (7+8) 486(500] 16(17] Table 4: Distributionof Population and Average Daily Per Capita Expenditure as try a whole. 5.1 byPovertyStatus 10 Middle high and income (5+6) 1,387(1448] 46 [48] The average Poverty DPCE DPCE Average Distribution Population Average Status 11 All 2.5 696(734] 23 [25] ofPopulation (inUS $ PPP) (inRs) dpce of different Percentage = (1) MPCE Monthly capitaconsumption per expenditure Distribution (inMillion) (2) DPCE- Daily capitaconsumption per expenditure. classes of people (3)1US$PPP = Rs912 1993-94 in termsof us $ in are consumer (4) Figures squarebrackets basedon detailed expenditure 4 0.7 1 Extremely VL5 poor 102^6 survey with purchasing 2 Poor 1.0 6 VVe VU from 61stround NSS on Source: Computed survey employment2004-05. unemployment. 1.3 8 3 Marginal (ppp) power parity 1^8 ]6S2 1.8 Z2A has been added in the last column of Table 3 to facilitate 4 Vulnerable 1] 289_5 19 3.1 5 Middle income In norms. 2004-05,thenominal withinternational 15_5 B8J comparisons 7.6 47 27 233 income Rs 44.93,butpppus $ was equivalent 6 High us rate exchange with $ was v 0.9 5 307 poor 274^ dpce oftheextremely 7 Extremely andpoor(1+2) toRs 9.12.Itcan be seen thattheaverage 1.6 10 4577 and 8 Marginal vulnerable (3+4) 5_L2 $ poorin 2004-05was approximately 1 and forthevulnerable 9 Poorandvulnerable 1.3 8 8U5 7313 (7+8) group was little above $ 2 per day. This should facilitate 10 Middle 37 23 16Z4 income andhigh (5+6) 18J wherepeople below ppp$ 1 are the international comparison 1.8 VI 10O0 8944 11 All as classified extremely poor and those below ppp $ 2 as the 1999-2000 7 0.8 87 874 of 1 Extremely poor poor. A fraction our vulnerablepeople will hve daily 1.2 10 17.3 174.1 2 Poor above Rs 20 per daywhichis theaverage slightly consumption 1.5 12 m 3 Marginal the for wholegroupofthevulnerable e, thosebetween1.25PL 200_2 (i 17 2.1 34.8 349.0 4 Vulnerable of and 2pl). But if we take the average consumption all the 3.6 31 U>7 1673 class 5 Middle and to classesbelonging extremely poor,poor,marginal vulner8.6 73 16 6 High income 26J on wouldbe consuming an averageless than able groups, they 9 7 Extremely andpoor(1+2) poor U__ 26J 261^ of definition Rs 20 a day and wouldbe belowtheinternational 1.8 547 549.2 and 8 Marginal vulnerable (3+4) ^16 line. poverty 1.6 807 8107 9 Poor vulnerable and (7+8) J3 of the between twosources data is also seen in The similarity 4.3 36 193 1934 income 10 Middle high and (5+6) workers poverty 11 All and of thedistributionpopulation unorganised 2.1 US by 10O0 1004.1 in in and status socialgroup 2004-05as given Table5. Thetableis 2004-05 9 64 697 1 Extremely poor of status thesocial the 0_9__ basedontheeus tobe abletorelate poverty 1.3 12 154 2 Poor of Thisdistribution workers. 1673^ of to groups thestatus unorganised 1.6 15 19J0 2071 3 Marginal thatin the consumer from different the social groupis hardly 2.2 20 39Z0 4 Vulnerable 36J0 as in survey given thebrackets. expenditure 4.0 37 VM class 5 Middle 209J of rounds of In an exercise thisnature usingdata setsofthree 10.1 93 4X) 437 6 High income theNational 1999-2000and 2004-05) (1993-94, SampleSurvey 1.2 11 2U5 2370 7 Extremely andpoor(1+2) poor the expenditureclasses fromthe abridged 8 Marginal vulnerable and estimating 2.0 18 and (3+4) 55^0 599J social themup withdifferent scheduleof the eus and linking 1.8 16 767 and 9 Poor vulnerable (7+8) 836J or and informal unorganised 10 Middle highincome(5+6) educationalbackground 5.1 46 23.3 253.5 and groups, 2.5 23 100.0 1089.6 workstatus,etc, thereare a numberof technicalissues and 11 A!l inInternational rates conversion the rates $PPP for discussedindetailin the Conversion World werecomputedfrom calendaryear-wise conversion provided Rs6.20,Rs8.42 of limitations data.We havetherefore ratesusedare 2006. The Outlook Economic Database,September Fund, Monetary 2004-05. and estimation and Rs9.12for1993-94,1999-2000and of Appendixthe methodology classification
weekly Q259 march 15,2008 Economies Political 51

SPECIAL ARTICLE

as saw a greater declinein theprevious yearsthanthat five (orRs 21as perces)"couldbe described peoplejustabove the groups line withsome bare minimaladditionalconsumption of the the sc/st population the same period.However, in the poverty oversubsistence. because one exogenous trend seemstobe more than They are vulnerable amongMuslims disappointing even shockof death or accidentor majorhospitalisation even a that sc/st population. of1993-94, or of As 87.4percentofMuslims loss can and temporary ofjob or earnings drivethemto destitution. werepoorand vulnerable itfellto 87 percentin 1999-2000 about36 percentofthepopulation 2004-05. and to 84.5 per cent in 2004-05, i e, a reduction only2.9 in of Theyconstituted Thesefour of overa period 10years. of groups people- extremely poor,poor,marginal percentage points andvulnerable constituted about77 percentofthepopulation It is especially to the interesting consider workstatusof the in 2004-05 (or 75 per centaccording the detailedconsumer population to in of or (inforgroups terms organised unorganised Mostofthemare living withan average mal) workers.3 1999-2000, In whenthedata permits identificaschedule). expenditure dpce below the international level of poverty $ 2 per day tionofunorganised of workers workers, percentofunorganised 83 and according us thisis thegroupwhichshouldbe identified werepoorand vulnerable, to whichcame downto 79 percentin as the commonpeople in India (the 'aam aadmi') who have 2004-05.The shareoflowersocial statusgroups suchas sc/st, been bypassedby the highgrowth The and obcs in thetotalunorganised workers 79 per was performance. remain- Muslims to whichfellto 76 percentofthetotalpopula(or ing23 percentofthepopulation 25 percentaccording the centin 1999-2000, detailedconsumer of and schedule)belongsto the better tionduring 2004-05.The problem poverty vulnerability expenditure off section thesociety. terms totalpopulation, poor and itsclose association of In of the withtheunorganised worker statusis andvulnerable were836 million ofa total out of it However, shouldbe notedthatthe population 1,090 indeeda systemic problem. million 2004-05compared 732million of894 million in to out in incidence unorganised of workstatusis higheramonglower Out In 1993-94. ofthat, million 237 sc/sts peoplewerebelowthenational socialstatus groups. 2004-05,itwas 95 percentamong line and 94 amongobcs whileitwas 85 percent 207 million poverty and another belongedto themarginal as well as Muslims existence less than a quarterabove the among remaining at the groupof miserable population group. line. Atthesametime, also notethat we there a stratum middle is of poverty Thenext of an social group. Thereis group vulnerable peoplewith average capita income(say,middleclass) groupin every per of the consumption Rs 20 a day were 392 million.More than the also a thinlayer(say,creamy layer)from highincome group absolute levelofconsumption thosepoorandvulnerable, of what as wellin each socialgroup. the acrosssocial However, variation ismore is between group thebetter groupsis noteworthy. 2004-05,11.2per centof scs/sts and this and In striking thedisparity off section classified as themiddle highincome. per 13.3percent Muslims here and The of wereinthemiddle income group though of sharesin 1993-94 were8.1for for capita consumption scs/sts and 11.1 Muslims. expenditure the the middleand high their income takentogether morethanfour is times that the In 1999-2000,14.1per centof obcs werein themiddle of income groups and that increasedto 17.8 per cent by 2004-05. In extremely poor and poor and morethan 2.5 timesthatof the category and takentogether. in of the marginal vulnerable increased from per groups contrast, thegroup "Others" share 29.4 Whatis morestriking thattheratioofaveragedpce ofthe cent 34.2percent. far thehigh is to As as income is group concerned, middle high and income to of thinlayer groups that theextremely and itis a very poor amongthescs/sts and Muslims increasing little the of poorshowed the and signofa fallalthough percentage people from percentto1percentfor former from percent 0.9 1.5 to belonging thepoorand extremely declined poor significantly. In income this is to sinceit Table 5: Percentage Distributionof Population and Unorganised Workers terms, disparity likely be much higher by PovertyStatus and Social Groups (2004-05) is themiddle highincome and classeswhoalmost account Poverty wholly Status UnPopulation - --- for household in Organised the savings theeconomy. this By reckoning, divide Total SC/ST OBC Muslim Others Workers between havesand have-nots Indiais indeedstartling the in and 1 6.4 [6.5] 10.9(11.4] 5.1[5.2] 8.2[8.2] 2.1[1.6] Extremely poor 5.8 would be politically well as socially unacceptablein a 2 Poor as 15.4(15.5] 21.5(21.8] 15.1(15.3]19.2(19.9] 6.4(6.1] 15.U democratic that the of polity guides process economic development. 3 Marginal 19.0(17.9] 22.4(21.2] 20.4(19.6] 22.3(19.9] 19.6
11.1(10.3]

The Divide between the Poor and the Non-Poor When we examine the social composition the poor and of as withinformal unorganised) non-poor wellas their (or linkage work status theeconomy, in there a significant is dividebetween thetwocategories. is presented Table5 for This in 2004-05. The fourgroupsof population the extremely poor,poor, and vulnerable identified the "common as marginal people"contain about88 percentofthescheduled tribe caste/scheduled whichwas a small reduction (sc/st) people in the country, of about 2 percentage thatin 1999-2000.They also pointsfrom include about80 percentoftheotherbackward classes (obcs) Muslims compared 84.5 per centin 1999-2000. as to excluding Thismeansthat proportion obcs inthepoorandvulnerable the of
^

4 Vulnerable 5 Middle income 6 High income 7 Extremely and poor poord+2) 8 Marginal and vulnerable (3+4) 10 Middle and income (5+6) high 11 AH

36.0(35.5] 33.0(32.7] 39.2(38.2]34.8(34.8] 35.3(35.0] 19.3(20.3] 4.0(4.4] 11.2(11.6] 17.8(18.9]13.3(14.7]34.2(35.7] 1.0(1.3] 2.4(3.0] 2.2(2.5] 11.0(11.3]

38.4 18.7 2.7 20.8 57.9 78.7 21.3

21.8(22.0] 32.4(33.3] 20.3(20.4] 27.4(28.1] 8.5(7.7] 55.0(53.3] 55.4(53.8] 59.6(57.8] 57.1(54.7]46.3(45.4] 87.8(87.1]79.9(78.2]84.5(82.8] 54.8(53.1] 12.2(12.9]20.2(21.8] 15.5(17.2]45.2(47.0]

9 Poor vulnerable and (7+8) 76.7(75.3] 23.3(24.7]

100(100] 100.00(100] 100(100] 100(100] 100(100] 100.Q in brackets (1)Figuressquare indicate estimates onthe the based detailed consumer expenditure survey. consistall (2)"Others" of those donot who to OBCs Muslims. belong SCs/STs, and social status about million of (3)The 0.66 were reported not includedthe population. in total people though workers of (4)Unorganised consistthose inthe sector households, working unorganised or excluding regular workers social with security benefits and workers organised without in the providedthe sector by employers the or social benefits any employment security providedthe by employers. methodidentifying social of (5)The different groups other and characteristics isexplainedthe in Appendix. march 15, 2008 0233 Economic Political & weekly

 SPECIAL ARTICLE

of in educationalstatus by to2.2percent thelatter. thecase ofobcs, itwas 1.4percent distribution population different for In is it poverty status giveninTable8. in 1999-2000and 2.4 per centin 2004-05 whilefor'Others' in of Whiletherehas been an overalldeclineof population the fro this increased m 6.4 to 11percentduring period.Similarly, the of to statuscategory the poor and vulnerable and poverty theunorganised workers, percentbelonged themiddle during 17 was to which increased 21percent 11-year income in points period,the reduction just over2 percentage high groups 1999-2000, and in2004-05. pointsamongthose amongilliterates about2.5 percentage level of education.In the case of the of socialgroups in withup to onlyprimary Wealso examined distribution different the and above but below graduation each poverty status.About83 per cent of those in the sc/st, secondary group,the reducwas share of the poor and vulnerable to Muslims obc groups and group tion in the percentage belong thepoorandvulnerable was and highincome whiletheir shareinthemiddle groups only over 7.3 percentagepoints and those with graduationand above was 7.9 percent. 54 percentin2004-05. Table 6: Distributionof Total and Unorganised Workers to The common of From detailedclassification the (2004-05) the people belonging the Total Work Unorganised Shareof Poverty intosix income/expenditure Status poor and vulnerablegroup are mostly population Workers Participation Workers Unorganised levelup to or illiterates witheducational to (inMillion) Workers classes and theirlinkageswith social (inMillion) Rate(%) TotalWorkers have of A we andunorganised workers, can primary. smallproportion them (%) groups level and middle secondary them three 1 Extremelypoor into on nowmove tocompress gonethrough 98.3 87.8 37.7 89.3 are fraction and ofeducation a minuscule of forpurposes compari- and Poor distinct groups and and 2 Marginal and son. These are (i) extremely graduate above. poor 95.7 42.7 244.8 255.8 vulnerable In Table9 (p 54),we givethedistribuand and vulnerable, poor,(ii) marginal 3 Poor and educain tionofthepopulation different middleand highincome.Whenwe 96.4 332.6 41.3 345.1 vulnerable (1+2) (iii) status tionallevels in different we getthelarger 4 Middleand the poverty combine first two, 80.1 90.0 44.3 112.4 socialgroups. acrossthedifferent Wherever high income ofpoorand vulnerable. groups group 92.4 422.6 42.0 457.5 Whatthistablerevealsis thatgiventhe warrantedwe would revert to our 5 Total 100. workers/Total Rate Work Population)* Participation = (Total whois a a samelevelofeducation, person to classification bringout the six-group to sc/st or Muslimis likely be morein Table 7: Percentage Distributionof Unorganised Workersin as as differences sharply possible. Different PovertyStatus bySocial Groups (2004-05) thana thepoorand vulnerable category of the Table6 gives shares unorganised Total ST/SC OBCs Muslim Others Status Poverty workersin each povertystatus and person belongingto the highersocial 8.6 12.9 33.6 44.9 100.0 1 Extremelypoor and poor statusgroup.For example,90 per cent distribution social Table 7 givestheir by 18.1 40.6 10.8 30.5 100.0 2 Marginal and vulnerable level statuscategory. 3 Poor and vulnerable (1+2) 100.0 34.3 38.7 11.3 15.6 of sc/st withonlyup to primary in each poverty groups ofeducationin 2004-05belongedto the we 4 Middle and high income 100.0 16.4 35.6 7.6 40.4 and themiddle highincome In group, thatabout80 percentofthetotal 5 Total poor and vulnerablegroup compared found 20.9 10.5 38.0 30.5 100.0 to 67 per cent forthe group"Others" by workersand Eachrowdoes notadd up to 100as thedistribution socialstatusdoes not workers are unorganised cases include non-reporting in2004-05 cent come representing upper caste Hindus, amongthemabout 40.4 per and Sikhs.We have also examinedthe details for Sikhs and Christians Others(i e, upper caste Hindus,Christians, from time othergroupsotherthan sc/st, Muslimsand obcs). Table 7 thesocial groupsforthreedifferent points.Whatwe find are levelsofeducation to is thatas peopleacquirehigher they able workers how the unorganised out belonging brings clearly but and accountedfor to getoutofthetrapofpoverty vulnerability, thespeed are mostly theextremely poor and poor groups of and obcs to the extent 91.4 per cent.If withwhichthathappensis slowerforthe lowersocial status bysc/sts,Muslims we includethe marginaland vulnerablegroups,this share groupsthan the higherones. Here one should perhapsnote as comes down to 84.4 per cent, still much higherthan their theotherenablingor disablingfactors, the case maybe, in shareof76 percent. population Distributionof Population (Age 15+) Table 8: 4 Educational Dimension of Povertyand Vulnerability of determinant poverty is The levelof education an important centofthose and as status 86 percentoftheilliterates 83.3 per schoolwere in thelower level up to primary witheducational strataof the poor and vulnerablein 2004-05. In the case of and above but of attainment secondary thosewitheducational belowgraduation, per centand amonggraduateand above 52 group.On the 30 percentonlywerein thepoorand vulnerable otherhand, about 70 per cent of the graduate and above populationin 2004-05 was in the middle and high income group,which had increased from62 per cent in 1993-94. levelofeducation Whereas86 percentofthosebelowprimary were in the poor and vulnerablegroup in 1993-94 and thisdeclinedto only83 per cent in 2004-05. The percentage
weekly Q3d & EconomicPolitical march 15, 2008
Percentage Educational Status by PovertyStatus in Different
Status Poverty Illiterate Upto Primary Middle Secondary Graduate and Above and Above butBelow Graduate Total

1993-94
1 Extremelypoor and poor 2 Marginal and vulnerable 3Poorandvulnerable(1+2) 4 Middle and high income 5 Total 2004-05 1 Extremelypoor and poor 2 Marginal and vulnerable 3 Poor and vulnerable (1+2) 4 Middle and high income 5 Total Source:Ibid. 27.1 59.0 86.1 13.9 100.0 24.1 ,59.2 83.3 16.7 100.0 13.7 57.5 71.2 28.8 100.0 7.4 45.0 52.4 47.6 100.0 2.8 26.9 29.7 70.3 100.0 18.2 54.4 72.6 27.4 100.0 36.9 51.5 88.4 11.6 100.0 32.7 53.4 86.1 14.0 100.0 18.3 56.4 74.7 25.3 100.0 . 10.9 48.8 59.7 40.3 100-0 4.6 33.0 37.6 62.4 100-0 26.8 52.3 79.1 20.9 100.0

53

SPECIAL ARTICLE =

In thecase ofMuslims, declinein thepercentage illiterof the For the determining speed of such a transition. lower social statusgroups,the otherdisablingfactors could be numerous atesbetween 1999-2000and 2004-05was about4.8 percentage and but the main ones are likelyto be the weak social network, points thedecreaseinthepoorand vulnerable group among accessto information opportunities, themwas 4.5 percentage points.The overall increasein the especiallyon employment weak family due to the low educationof parentsand percentage graduatesand above among Muslimswas 0.3 of support in in whiletheincrease thepoorandvulnerable relatives and the constraints the largersocial milieuthatis percentage points, ofthegroup often was marginal 0.04 percentage at discriminatory. points. the The obcs wereable to reducethepercentage shareofilliterIn thecase ofMuslims, congruence betweenpoverty and educational statusis notverydifferent from thatin thecase of ates by about 6.5 percentagepoints from45.8 per cent in thesc/st population. percentage thepoorand vulnerable 1999-2000 to 39.3 per cent in 2004-05 witha corresponding The in withlow education(up to primary of in level) at about87 per reduction about5.8 percentage group points theilliterate and poor centin2004-05is closer that thesc/st population. to of vulnerable. The graduate and above amongobcs, on theother In thecase of obcs, 84 per centof thosewithlow education hand,increased from percentin 1999-2000to4.1percentin 3.1 were poor and vulnerablein 2004-05. And this makes their 2004-05witha marginal increaseofonly0.3 percentage points closerto sc/st and Muslims thanthe Others whereit inthepoorandvulnerable position amongthem. was 67 percent. In the case of thosenot belonging scs/sts, Muslims to and Within groupof low educated (up to primary the reducedby about4.5 percentage level) we obcs, the shareof illiterates should fact in notethecongruence between and from percentto 19percent, whilethosebelonging to 23.5 illiteracy poverty points and vulnerability acrosssocial groupsas givenin Table 9. For thepoorandvulnerable illiterates reduced 3.7percentage among by in The graduates and above,on theotherhand,increased 89 example, 2004-05,91 percentofsc/st illiterates, percent points. ofMuslim illiterates 86 percentofobc illiterates and wereinthe by about 1.9 per- Table 10: Changes in Educational Attainmentand from PovertyReductionbySocial Groupsbetween 1999-2000 poorand vulnerable group.This was 71 per centforthe group centage points and 2004-05 (inpercentage points) "Others". closecongruence This between and is illiteracy poverty 12.1per cent to 14 Social in in in in GroupReduction Reduction Increase IncreasePoor Illiterates Poor and Whatis of relevance Graduateand Vulnerable here is thatthe percent with mara perhapsnotunexpected. Vulnerableand Above among of incidence illiteracy higher is increase 0.2 of amonglow social statusgroups. ginal Graduates among Illiterates and Above In 2004-05,thesewere 51 per cent forsc/st, 41 per cent for percentage points SC/ST 6$ 03 0.2 obcs and 19 for Others. Sucha situation in the poor and 6J> Muslims, percentfor 39 Muslims 4.8 0.3 0.04 4J> results a formidable in initial for handicap all butmoreso,and in vulnerable group OBCs 10 0.3 6J> 5J a stark for them. form, thoseat thebottom. among Others 37 TL9 0.2 4J> We have summarised Table 10 the impactof the improve- The sc/sts and Source: datainNSS and61st in From 55th Round on Survey Employment1999-2000and 2004-05. ment educational in Computed. attainment a periodoffive over yearsduring obcs achieved a Unemployment, across different largerreduction the percentage illiterates. impact in of The in 1999-2000to 2004-05. This was not uniform socialgroups. The declinein thepercentage illiterates of and vulnerability also greater was among reducing poverty amongses/ scs/sts during On side the 1999-2000 to 2004-05 was the highest though sts andMuslims. theother ofthespectrum, however, of Therewas, scs/sts and Muslims werenotable to increase percentage the of theystillhad the largestpercentage illiterates. a marginal increaseof 0.3 percentage in graduates abovesignificantly. Muslims and The however, wereabletoavoid only points and an increasein thepercentage shareofthepoorand vulnerable graduates aboveamongscs/sts.
Table 9: Percentage Distributionof Population in Specific Educational Categories by PovertyStatus and Social Groups (2004-05) Social Status Poverty Category SC/ST Poor vulnerable and and Middle HIG All Muslims Poor vulnerable and Middle HIG and All OBC Poor vulnerable and Middle HIG and AH Others Poorandvulnerable Middle HIG and All A Poor vulnerable and Middle HIG and Illiterate toPrimary Middle SecondaryGraduate Total Up andAbove but and Below Graduate Above 91.2 8.8 100.0 89.5 10.6 100.0 85.6 14.5 100.0 70.6 29.4 100.0 86.1 13.9 89.7 10.3 100.0 87.2 12.8 100.0 83.6 16.4 100.0 66.9 33.1 100.0 83.3 16.7 100.0 80.7 19.3 100.0 76.5 23.6 100.0 74.3 25.7 100.0 57.7 42.3 100.0 71.2 28.8 100,0 65.4 34.7 100.0 63.1 36.9 100.0 59.9 40.1 100,0 39.5 60.5 100.0 52.4 47.6 100,0 47.8 52.2 100.0 43.4 56.6 39.4 60.6 21.6 78.4 29.7 70.3 85.0 15.0 100.0 81.3 18.7 76.3 23.7 50.9 49.1 72.6 27.4 Table 11: Percentage Distributionof Unorganised Workersin SpecificEducational Levels byPovertyStatus in Social Groups (2004-05) Social Status Poverty Category IlliterateUp PrimaryMiddle Secondary to Graduate Total and Above and Above but Below Graduate 90.4 9.6 100.0 "88.2 11.8 100.0 84.2 15.8 100.0 69.4 30.6 100.0 84.8 15.2 100.0 83.5 16.5 100.0 79.5 20.5 100.0 76.5 23.5 100.0 61.6 38.4 100.0 74.6 25.4 100.0 76.8 23.2 100,0 71.4 28.6 100,0 68.2 31.8 100.0 48.0 52.0 100.0 61.7 38.3 100,0 63.5* 36.5 10Q.0 50.3 49.7 IQQ.Q 50.5 49.5 100.0 31.4 68.6 100.0 41.0 59.0 100,0 88.3 11.7 100,0 84.4 15.6 1QQ.Q 79.9 20.1 100.0 58.6 41.4 100.0 78.4 21.6 100,0

SC/ST

Poor vulnerable 91.7 and Middle HIG and All MiddleandHIG AH 8.3 100.0 9.9 100.0 14.2 100.0 28.0 100.0 12.9 100.0

Muslims Poor vulnerable 90.1 and

100,0 1Q0.0 OBC

Poor vulnerable 85.8 and MiddleandHIG All Middle HIG and All

IQQ.Q IQQ.Q

Others Poor vulnerable 72.0 and

100,0 1Q0.0 All

Poor vulnerable 87.1 and MiddleandHIG All

All 100.0 Source: HIG ibid. means income high group.

100.Q 100,0

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EconomicPolitical & weekly

ARTICLE SPECIAL The wereable to increase In otherwords,our common the people of 836 millionare largely among graduates. obcs and others the category poor and vulnerable of with and thepercentage sharesofgraduates abovewithout signi- co-terminus sc/sts, any Muslimsand obcs. And in termsof productive ficant increase thepoorand vulnerable in they activity amongthem. group to of workers. The linkagebetweenpoverty and vulnerability educa- overwhelmingly and belong thegroup unorganised are or workers either is to tionalattainment workers similar that wage self-employed regular Unorganised amongunorganised or ofthetotalpopulation. About workers, 81.7percentoftheextremely Amongtheunorganised poor employees casual workers. and and poor unorganised workers were eitherilliterates with over90 percentofthecasual workers about75 per centof or were of level.Among poorand vulnerable theself-employed in thecategory thepoorand vulnerathe education to primary up attainment ble. Thus most of the casual and self-employed workers per centhad educational unorganised 73.1 unorganised of workers wereinthecategory common level. peopleor'aaam aadmi'. uptoprimary and highincome workers themiddle in of In Table 11 (p 54), we give the distribution unorganised The unorganised groups level (giventheir at in levels.Thisis quite werelargely workers each social group educational higher self-employed a higher by distrisalaried.The percentage in levels)and regular revealing thesense thatdespitethesame levelof education, educational status in workers each activity poverty of on bution unorganised variesdepending and theincidence poverty vulnerability of by in to. one thesocialgroup belongs Forexample, percentofillit- as wellas their (in 92 composition rowtotal)is given Table13. and status of the between type activity, Therelationship to erates poverty group belonging sc/st werein thepoorand vulnerable here.Whiletheself-employed needstobe emphasised were education to whereas 72 percentofilliterates belonging Others only followed is The by among the poor and vulnerablegroupwas 57.2 per cent in layer poorandvulnerable. former thebottom was thatemerges 2004-05,about69 percentofthepoorandvulnerable either obcs and Othersat the top - a pattern Muslims, level.Whileabout71 or illiterates witheducation to primary ouranalysis. up throughout were income of in of thattheimpact better percent those themiddle out Theaboveanalysis category self-employed, brings clearly no had workers either educaof in was not uniform different about51percent theunorganised reduction in education poverty level. social groups.The tionorup toprimary and Poverty Table 12:ChangesinEducationalAttainment consisted workers The extremely Reductionof Unorganised WorkersbySocial Groups detailsare summapoorand poorunorganised between 1999-2000 and 2004-05 (inpercentage points) in and risedin Table12.In of48 per centself-employed 45 per centcasual workers in IncreaseinPoor in Increase in Social Reduction Reduction sharesin 1999-2000were44 percentand their Graduate and Vulnerable thecase ofboththe 2004-05though Illiterates Poorand Group Vulnerable and Above among The obcs and Others, 51 per centrespectively. poor and vulnerable unorganised Graduates among and Above Illiterates and constituted per centself-employed 35 per cent therewas a higher workers 57 ' 0.1 0.1 7.5 7.2 SC/ST to in in growth graduate casualworkers 2004-05as compared 54 percentand40 per 0.2 47 06 4.5 Muslims who The in 1999-2000. unorganised workers, are and unorganised cent respectively 0.3 6A 03 OBCs ^6 thus and casual workers, belongtovulnerworkers *with a mostly self-employed 0.3 U 4.8 Others 4J for (The year slower growth in ableandbelowpoverty categories. estimates previous on the text thewebsiteofthejournal.) the maybe seenfrom full the poor and vulnerable of the segment group.However, in was situation worse thecase ofsc/st communities. from 5 Consumption,Household Characteristicsand that characteristics emerge Thereare twounmistakable of WorkParticipation the of of thepresentation thestatus poorpeople.First, groups and associationsbetween consumption the There are significant constitute vulnerable extremely poor,poor,marginaland Lowconsumpand characteristics work aboutthree-fourthshousehold for participation. of peopleinaccounting category common housewitha low assetbase (e g,land),bigger for ofthepopulation. underprivi- tionis associated Theyalso account thesocially ratio.This associationis mostof hold size and a higherdependency obcs. Secondly, and legedgroupof scs/sts, Muslims, rate the Table14 (p 56). Though work from workers. evident of participation to these peoplealso belong thecategory unorganised in declinedforall groupsin 1999-2000,it improved 2004-05. Status Table 13: Percentage Distributionof Unorganised Workersin Different Activity the The middleand high incomegroupsexperienced highest byPovertyStatus (2004-05) Workers Total Status rate between 1999-2000 and Regular Wage Casual Self-employed Poverty increase in work participation Employees the workopportunities apartfrom 2004-05,suggesting greater 5.8(100) 9.1(48.4) 4.3(6.8) 1 Extremely 4.3(44.8) poor with werebetter factthatthejobs theysecuredin general paid 15.0(100) 21.4(43.8) 11.0(6.7) 2 Poor 12.3(49.5) socialsecurity. greater 19.6(100) 24.3(38.0) 15.4(7.2) 3 Marginal 17.8(54.8) of thatthree earlier been indicated Ithas already quarters the 38.4(100) 35.2(28.2) 36.0(8.6) 4 Vulnerable 40.3(63.3) Indian people have an average daily per capita consumption 18.7(100) 9.4(15.5) 27.6(13.5) 5 Middleclass 22.0(71.0) of 2.7(100) 0.6(6.3) expenditure below Rs 2o. Froma social pointof view the 5.7(19.7) income 6 High 3.3(74.0) as classes oftenbecomessensitive betweendifferent 20.8(100) 30.6(45.1) 15.3(6.7) 7 Extremelypoorandpoor(1+2) 16.6(48.2) disparity other vis--vis their 57.9(100) tendtocompare 59.4(31.5) 51.4(8.1) and 8 Marginal vulnerable 58.1(60.4) groups. (3+4) position people are 78.7(100) timepoints 90.0(35.1) for 66.7(7.8) 9 Poor vulnerable and 74.7(57.2) (7+8) The detailsofpercapitaconsumption three 21.3(100) 10.0(14.4) income 33.3(14.3) and 10 Middle high 25.3(71.4) (5+6) in Table 15 (p 56). Whiletheratiooftheaveragedailyper given 100(100) 100(30.7) 100(9.1) 11 All 100(60.2) of capitaexpenditure thehighincomegroupto thatofthepoor indifferent status workers of distribution are percentage poverty by in brackets the unorganised Figuresthe was 7.6 in 1993-94,the same in the case of the middleincome status. activity
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SPECIAL ARTICLE

was 3.1.These ratiosdid notchangemuchin 1999-2000 group and 2004-05exceptfora decreaseto 7.3 in thecase ofthehigh income in the group 1999-2000.Similarly, ratioofaveragempce oftheextremely and poorgroupto thatofthemiddleand poor highincomegroupwas morethan4 in all theyears.However, in disparity consumption may expenditure notbe an appropriate indicator incomedisparity of sincelowerincomegroups not do havethecapacity save (orsaveonlya smallproportion their to of to income income) compared thehigher groups. Asfar thegrowth consumption concerned, monthly as in is the total has at consumption expenditure beenincreasing an average annual rateof 3.3 per centduringthe periodfrom 1993-94to rate duringthe period1993-94to 2004-05.Whilethe growth to 1999-2000was lowerat 2.6 percent,itaccelerated about4.2 was largely 1999-2000to 2004-05.The growth percentduring contributed themiddleand highincomegroups withannual by ratesof about4.9 per centduring growth 1993-94to 2004-05.
Table 14: Comparative Estimates of Household Characteristicsby PovertyStatus
(AllIndia) Status Poverty MPCE(Rs) Land Possessed (ha) HHSize No of Dependency Workforce Workers Ratio(%) Participation Rate

1993-94
1 Extremelypoor and poor 2 Marginal and vulnerable 3 Poorand vulnerable (1+2) 4 Middle and high income 5 Total 164 294 246 697 328 0.61 0.90 0.80 1.03 0.85 5.51 4.80 5.04 3.79 4.76 2.21 2.04 2.09 1.64 1.99 2.50 2.36 2.41 2.31 2.39 40.03 42.42 41.53 43.34 41.86

1999-2000
1 Extremelypoor and poor 2 Marginal and vulnerable 3 Poor and vulnerable (1+2) 4 Middle and high income 5 Total 2004-05 1 Extremely poor and poor 2 Marginal and vulnerable 3 Poor and vulnerable (1+2) 4 Middle and high income 5 Total 321 550 485 1,388 695 0.38 0.59 0.54 0.67 0.58 5.74 4.83 5.06 3.62 4.63 2.18 2.07 2.10 1.61 1.95 2.64 2.33 2.41 2.25 2.37 . 37.68 42.70 41.28 44.32 41.98 266 466 402 1,091 534 0.41 0.65 0.58 0.67 0.60 5.81 4.96 5.20 3.70 4.83 2.14 1.99 2.04 1.51 1.90 2.72 2.49 2.56 2.44 2.54 36.81 40.23 39.13 40.94 39.48

Source: from 50th, NSS 55th and 61stround on mentComputed ment of survey Employ Surveys 1993-94, Unemploy 1999-2000 2004-05 and

Table 15; ConsumptionExpenditure by PovertyStatus

Status Poverty TotalMonthly Consumption at (RsMillion 1993-94Prices) 1993-94 1 Extremelypoor and poor 2 Marginal and vulnerable 3 Poor and vulnerable (1+2) 4 Middle and high income 5 Total 45,072 1,34,578 1,79,650 1,13,224 2,92,874 1999-2000 44,636 1,64,209 2,08,845 1,33,464 3,42,308 2004-05 42,603 1,85,512 2,28,115 1,91,340 4,19,453 Per Average Monthly Capita (Rsat1993-94 Prices) Consumption 1993-94 1999-2000 2004-05 164.4 294.0 245.5 697.1 327.5 170.7 299.0 257.6 690.2 340.9 179.7 309.7 272.8 V54.8 385.0

GrowthRates in Consumption Expenditure

Status Poverty Annual Growth Ratein Annual Growth Ratein PerCapitaConsumption Monthly Consumption 1999-2000 2004-05 2004-05 1999-2000 2004-05 2004-05 to to to to to to 1993-94 1999-2000 1993-94 1993-94 1999-2000 1993-94 -0.2 34 Z5 2.8 2.6 . -0.9 2.5 1.8 7.5 4.2 -0.5 3.0 2.2 4.9 3.3 0.6 0.3 0.8 -0.2 0.7 ' 1.0 0.7 1.2 1.8 2.5 0.8 0.5 1.0 0.7 \ 1.5 \

1 Extremelypoor and poor 2 Marginal and vulnerable 3 Poor and vulnerable (1+2) 4 Middle and high income 5 Total Source: ibid.

The poor and vulnerable takentogether, a however, registered rateof 2.2 per centduring same period.In the positive growth terms mpce, overall of the rate to 1993-94 2004-05 growth during was about 1.5per centper year.The extremely poor and poor an rate registered averagegrowth of0.8 percentwhilethepoor and vulnerable takentogether a rate registered growth of 1 per centper annum.The growth raterecorded the middleand by in was highincomegroups theaveragepercapitaconsumption ratein the case of highincome 0.7 per cent.This low growth rate group maybe becauseofdiminishing marginal ofconsumptionafter threshold ofincome. a level Thereis a difference between capitaconsumption per growth and totalconsumption This is becausethesize ofeach growth. class has undergone somechange.Forexample, expenditure 91 million have been added to themiddleand highincomegroup whereas104 million were added to the groupof the poor and vulnerable. Thosewhohavebeenaddedinthehigh income group comewith higher capitaexpenditure thus a and per accompanied in This byan increase theaverage monthly expenditure. needsto be noted because the per capita consumption expenditure indicates absolute the levelofpurchasing powerand itsincrease on a per capita basis is directly relatedto the welfareof the indicatesthe total purchasing people. The total consumption powerof the respective groupwitha corresponding changein the population size of the group,determining size of the the market different of goodsconsumed them. by In thegeneralprofiling thecommon of peopleas well as the income to in higher people,itis important bring thecomposition ofconsumption because thishas significant on implications the of natureof the processof pattern demand and consequent economicgrowth.If a significant share of consumption is accounted by the highincomegroups, for thenthe pattern of demandfor a of goodsand services undergoes changein favour non-basicsand durable consumergoods, luxurygoods and specific highvalue goods consumed suchclasses.Therewill by be correspondingly incomespenton wage goodsconsumed less witha smaller oftheir size markets. bythelowerincome groups thenewinvestments seektosatisfy demand will the Alternatively, ofthericher classesbecauseoftheready market, profitability high and consequent circulation income of within thoseclasses.The resultcould be strengthening divisionof the the long-term wherea modernor organised sector- often economy capital, skill and service intensive would cater to the knowledge, demandsoftherichwhilethedemandfor wage goodsofa low valuenature wouldbe met a lessmodern unorganised or by sector, often traditional (such as artisanaland craft production along with peasant agriculture) with very little Table 16: Percentage Share ofTotal Monthly Expenditureby PovertyStatus capital intensity,low Poverty Status ShareofTotalMonthly level of knowledge Expenditure and 1993-94 1999-2000 2004-05 skill and access to such 1 Extremelypoor and poor 15.4 13.0 10.2 as inputs credit. 2 Marginal and vulnerable 45.9 48.0 44.2 The composition the of 3 Poorand vulnerable (1+2) 61.3 61.0 54.4 ofdifferent4 Middle and consumption 38.7 39.0 45.6 high income expenditure classes is 5 Total 100 100 100 givenin Table 16. First, Source:Ibid
march 15, 2008 Q3Ea Economic Political & weekly

SPECIAL ARTICLE thetotalconsumption of 68.6 expenditure the poor and vulnerable durable goods.In thecase ofthepoorandvulnerable group, in was a little overthree-fourthsIndianpeopleaccounts percentofthegrowth consumption of constituting expenditure on food foronly54 per centwhilethatof the middleand highincome andessential non-food items. of for groups accounting a littleless thana quarter the Indian people(23 to24 percentas perourestimate) spendstheremain- 6 The Consumption Divide characteristics poverty mpceandother household for by ing46 percentin2004-05.The corresponding figures 1993-94 Theaverage were that the poor and vulnerableconstituting per cent statusand social groupsare givenin Tables 19 and 20 (p 58) 81 acrossdifferent while respectively. Theseparameters significantly accounted 61 percent total for of vary consumption expenditure, In evenwithin each poverty status. 1993-94, for socialgroups theremaining percent thehigh of income accounted sc/st 19 group of had of That 39 percentofconsumption. is tosay,in terms percapita, households thelowestmpce,thelargest averagenumber all and wpr somewhat 1:2.7 1999-2000 workers household thehighest among thepoverty from in theconsumption worsened ratio per : ;tatus categories. to 1:2.8in 2004-05between Table 17: Percentage DistributionofTotal ConsumptionExpenditure However, he highestaverage housethese two classes. If this bySpecificGroups of Items Durable Medical Other Food and Essential Education Status iold size and dependency it be Poverty trend continues, should Non-food Goods Non-food Beverage Items Items atios(the household size of a matter seriousconcern dividedby the numberof in to policymakers general 1999-2000 1.3 9.4 1.3 3.4 16.8 67.8 1 Extremelypoor and poor workers) were among and the political leadership 2 Marginal and vulnerable 1.7 5.0 12.3' 15.9 2.1 63.0 in Vluslims all the poverty inparticular. 1.6 11.7 1.9 4.6 16.1 64.1 3 Poor and vulnerable also The An analysisof item-wise 4 Middle and high lincome zategories. Muslims 4.9 7.3 20.9 4.1 14.1 48.7 had the lowest wpr and dur- 5 All 2.9 15.3 5.7 2.8 15.3 58.1 consumption expenditure of averagenumber workers ing1999-2000and 2004-05, 2004-05 1.8 10.0 1.9 3.5 19.5 63.3 of household in Table 17, clearly 1 Extremelypoor and poor irrespective per given 2.4 13.0 4.8 3.1 18.2 58.5 The the povertycategory. in out the shift per- 2 Marginal and vulnerable brings 2.3 12.4 4.6 2.9 18.4 59.4 3 Poor and vulnerable of relative of share expenditure positions different centage 6.4 23.0 7.4 7.0 14.8 41.5 4 Middle and high income did socialgroups notchange to foodand beverages from 4.2 5.9 17.2 4.7 16.8 51.2 5 All muchby 1999-2000 except in non-food all classes of Source:Computedfrom 55thand61stroundsurvey Employment-Unemployment, and 2004-05. 1999-2000 on NSS of thatthe averagenumber de- Table 18: Annual people. The maximum at prices) Consumption Expenditure(Rsmillion current in workers household the food Poverty per cline in the share of Total Durable Other Food and Essential Education Medical Status Non-food Goods Beverage Non-food middle and high income was recorded consumption items Items was among group thehighest by the middleand highin- . 1999-2000 of obcs instead sc/st house11,056 8,46,575 79,772 1 Extremelypoor and poor 28,786 10,627 1,41,994 5,74,340 come group.However,the the improved shareof 2 Marginal and vulnerable 19,62,423 4,96,292 66,140 1,54,289 3,81,593 53,278 31,14,013 holds.Therewas no change group 64,333 39,60,588 1,83,075 4,61,365 even in 2004-05exceptthat in by 3 Poor and vulnerable,(1+2) 25,36,763 6,38,286 76,766 expenditure education 4 Middle and high income 3,61,865 1,04,884 1,86,227 5,37,878 1,25,474 25,66,276 12,49,947 and amongmarginal vulnerother 2.9 percentage points, 5 Total 37,86,710 10,00,150 1,81,651 3,69,302 9,99,243 1,89,807 65,26,864 the ablehouseholds, average items 2 percentnon-food by 2004-05 and goods 1 Extremelypoor and poor 5,93,408 1,82,343 18,093 33,165 93,544 16,536 9,37,089 number of workers per agepoints durable householdwas the highest points. by1.5percentage 2 Marginal and vulnerable 7,29,615 1,23,088 1,92,252 5,19,382, 97,818 40,06,417 23,44,262 obcs andnotscs/sts. The annual consumption 3 Poor and vulnerable (1+2) 29,37,670 9,11,958 1,41,181 2,25,417 6,12,926 1,14,353 49,43,506 among The averagempce of the expendituresof different 4 Middle and high income 17,70,914 6,32,626 2,98,232 3,15,993 9,85,263 2,75,099 42,78,127 middle and high income 47,08,584 15,44,584 4,39,413 5,41,410 15,98,189 3,89,453 92,21,633 groupsof itemsat current 5 Total Source.Ibid. groupwas aboutfourtimes poverty pricesby different that of the extremely poor groups during 1999-2000 Table 19: Average MPCE(Rs) and WorkerParticipation Rate (WPRin %) bySocial Group and PovertyStatus in and poorgroup thecase of and 2004-05 are given in Ratioof All Middleand and . Poor SocialGroup Extremely Year Marginal in sc/st as against3.8 times ConsumVulnerable and Poor Table18. Highincome WPR MPCE WPR MPCE WPR WPR MPCE ption MPCE and 4.2 the case ofMuslims increase Whiletheoverall 4.0 46.6 50.5 255 617 48.2 276 44.1 156 in in times thecase ofOthers intotal expendi- 1993-94 SC/ST consumption 32.9 3.8 37.6 295 662 33.7 294 30.2 174 Muslims The theyear1993-94. pattern and between ture 1999-2000 NA NA NA NA NA NA NA NA NA QBCs did not changeby 2004-05 2004-05 was Rs 26,94,769 4.2 41.4 42.8 364 41.7 714 301 39.5 168 Others* except that the ratios got million Rs million, 17,11,851 4.2 41.9 43.4 328 697 42.4" 294 40.0 164 All in reduced thecase ofsc/sts (63.5 per cent) was contri- 2004-05 SC/ST 3.7 45.0 520 49.0 46.5 516 40.9 303 1,118 and andMuslims itincreased buted by the middle and 3.7 33.9 611 37.4 34.7 30.4 556 348 1,279 Muslims inthecaseofobcs andOthers. 3.7 43.6 48.1 632 44.2 541 37.7 high income group.About 324 1,211 QBCs the In other words, disparity 4.6 40.3 41.6 1039 608 39.9 35.6 349 1,611 Others 34.9 percentof the growth those belongingto 4.3 42.0 695 44.3 42.7 among 550 37.7 321 intheconsumption All 1,388 expend = MPCE Income of & MPCE Middle High Ratio Average, OBCsin1993-94.NA= NotAvailable. Group/Average of include of the social categories obcs itureof the group was in - OthersPoorand Poor. Extremely In and Others worsened. and 2004-05. 1993-94 on got items and Source:ComputedfomNSS50thand 61stroundsurvey Employment-Unemployment, other non-food
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SPECIAL ARTICLE

lower thecaseofsc/standMuslims, averagempcesremained the two with lesser thantheother groups disparities. Whilethere been a declinein theoverallaveragehousehas holdsize from personsin 1993-94to 4.6 in 2004-05,those 4.8 to fromthe belonging sc/sts and Muslimscould not benefit same as given in Table 20: Household Size and Dependency Ratios byPovertyStatus and Social Groups Table 20. In thecase Social HHsize Ratio Group Dependency 2004-05 1993-94 1993-941999-2000 1999-2000 2004-05 of sc/sts, the averpoor Extremely andpoor age householdsize 5.3 5.5 5.5 23 2.5 2.4 ST/SC increasedfrom4.6 Muslims 6.1 6.7 6.6 3.3 3.5 3.3 in 1993-94to 4.7 in OBC NA NA 5.8 5.8 2.7 2.7 1999-2000and then 2.5 Others 5.5 5.9 5.7 3.0 2.8 reduced to 4.6 in All 5.5 5.8 5.7 2.5 2.7 2.6 2004-05.In thecase and Marginal vulnerable 4.4 4.6 4.6 2.1 ST/SC 2.2 2.2 of Muslims, avthe Muslims 5.1 5.5 5.3 3.0 3.1 2.9 household size erage OBC NA 4.9 NA 4.8 2.4 2.3 increasedfrom5.2 Others 4.9 5.2 5.0 2.4 2.8 2.5 in 1993-94to 5.5 in All 4.8 4.8 5.0 2.4 2.5 2.3 1999-2000and then Poor vulnerable and to 5.3 in 2004-05. 4.8 4.9 ST/SC 4.9 2.3 2.2 2.3 The averagehouseMuslims 5.5 5.9 5.6 3.1 3.3 3.0 holdsizes oftheexNA OBC 5.2 5.0 NA 2.5 2.4 Others 5.1 5.3 5.1 2.4 2.8 2.6 tremelypoor and All 5.0 5.2 5.1 2.4 2.6 2.4 poor in all the soMiddle high and income cial groups were

The percentage sharesofdifferent in poverty categories total monthly consumption expenditure social groupin different by yearsare givenin Table 22 (p 59). The shareof the extremely to from percentin 1993-94 10.2per 15.4 poorandpoordecreased cent in 2004-05. The share of the marginaland vulnerable 45.9 percentin 1993-94to 44.2 per groupsalso declinedfrom cent in 2004-05. It was mainly of contributed the shift the by from to the However, persons poorcategories higher categories. shift has not been uniform across all social groups. The most wereagain scs/sts,Muslims obcs in and disadvantaged groups order. that

7 A SummingUp

To sumup,an overwhelming of majority theIndianpopulation, around three is and quarters, poorand vulnerable itis a staggeras or 70 ing836 million of2004-05.Thisincludes million 6.4 per centwho maybe characterised extremely as poor witha per of of capitaconsumption less thanorthree-quarters theofficial line.To thisshouldbe added 167million thosewho of poverty are poor with consumption more than that fixedas the not official line. If thisis relaxedto includethosewitha poverty of per capita consumption up to 25 per centabove thepoverty then find we another million. line,calledmarginally here, 207 poor These threegroupsaccountfor or 444 million 40.8 percentof thepopulation. thiswe add To Table 21: GrowthRates in Per Capita 3.4 ST/SC 3.4 3.4' 2.0 2.2 2.0 a with percapita considerably higher those consump- ConsumptionExpenditurebyPoverty Muslims 4.0 3.9 3.9 2.7 2.6 2.7 thanthosein other tion between 1.25 and two Status across Social Groups NA OBC 3.6 3.6 NA 2.3 2.1 Annual Growth in Rate line povertycategories. timesthe poverty as vulOthers 3.9 3.8 3.7 2.3 2.6 2.4 (in %) PerCapita Consumption 2004-05 2004-05 to to 1999-2000to Consequentlythey nerableand thisgroupofpoor All 3.8 3.7 3.6 2.3 2.4 2.3 1993-94 1999-2000 1993-94 also had higher de- and vulnerablecomes to 836 Total Extremely andpoor poor ST/SC 4.6 4.7 4.6 2.1 2.3 2.2 of pendency ratios, million Indiansorwell over ST/SC 0.8 1.0 0.9 Muslims 5,2 5.5 5.3 3.0 3.2 3.0 0.3 1.3 0.8 makingtheirliving 75 percentofthepopulation. Muslims OBC NA 4.8 4.7 NA 2.4 2.3 conditions deplorThe next major finding 1.1 is OBC Others 4.8 4.7 4.4 2.4 2.7 2.5 1.3 1.0 1.2 theclose associationbetween Others ablypoor. All 4.8 4.8 4.6 2.4 2.5 2.4 0.6 1.0 0.8 While average poverty vulnerability the and with _AII andvulnerable mpceortnemiddleand highincomegroupduring The 2004-05was one's social identity. two Marginal ST/SC 0.5 0.8 0.6 Rs 1,388, was as lowas Rs 321inthecase oftheextremely it poor social groupswho are at the Muslims 0.4 0.6 0.5 and poor.Evenwithin poverty the of category extremely poor bottomby this classification OBC 0.9 and poor,sc/st communities werethemostpoorwithan mpce are the scs/sts, who consti- Others 1.1 1.0 1.0 ofRs 303 in 2004-05.Forexample, mpceofthesc/st pooris tutethebottom the and the All 0.3 0.7 0.5 layer, who are in the next Poorandvulnerable only87 percentofthempceofOther poorin 2004-05.Thus,the Muslims, 1.1 1.3 1.2 In words the layer. Thisdoes notmeanthat ST/SC poorarenotthesameacrossall socialgroups. other Muslims 0.8 1.3 1.0 is are depth of poverty the highestfor the sc/st communities theother groups farbetter OBC JL4 followed obcs and Muslims. The off. nextgroupis theobcs by Others 2.2 1.2 1.8 The average annual growthrates in total and per capita but betterthan the two bot0.8 1.2 1.0 _AII of social groups to tom layers. Even for those Middle highincome consumption expenditure different belonging and various are in -0.2 0.4 0.1 poverty categories given Table21.Whiletheoverall who do not belongto any of ST/SC Muslims -0.6 rate 2.0 0.5 the the growth in mpceduring period1993-94to 2004-05was thesegroups, incidence is OBC U it 1.5 ; merely percentperannum, was as highas 4 percentin the 55 percent. 0.9 2.7 1.7 caseofthose belonging thesc/stcommunities, not to and Muslims Theobverse thisisequally Others of -0.2 1.8 0.7 obcs. The growth was thelowest, percent, thecase of important. says that in all _AII rate 1.2 in It Total Muslims 1.3percentinthecase ofscs/sts.During period communities and the there a class of ST/SC is 1.1 1.7 1.3 of1999-2000to 2004-05,thegrowth ratewas relatively called and Muslims higher better-off, themiddle 0.5 2.2 1.2 with overall an of income which varies _OBC average 2.5percentand4.1percentinthecase high group, 2J> ofothers. The growth ratesofscs/sts,Muslims and obcs were withsocial identity. 3.9 4.1 4.0 Therefore Others 2.2 2.5 1.5 . 1.7percent, percentand 2.5percentrespectively. economic differentiation across _AII 07_
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SPECIAL ARTICLE

social groupsis a factof lifein contemporary India, albeitin

varying degrees. seemsto A muchmorepowerful factor thisdifferentiation in that There nodoubt noorlow is be that educational of endowments. withpoverty vulneraand education more is associated strongly But Table 22: Percentage Share of Total bility. the interesting finding Monthly Expenditure of Different is thatforthe sociallyconsidered Poverty Categories across Social Groups level lower the groups threshold of SocialGroup ShareofTotalMonthly Expenditure educationrequiredto cross pov1993-94 1999-2000 2004-05 ertyis higher comparedto other Extremely poor and poor Whatwe find here social groups. 18.9 ST/SC 26.5 22.4 be- Table 23: Systemicand HierarchicalSegmentation of Social Groups is the close correspondence 19.3 15.3 Muslims 22.3 across EconomicGroups (Ranking) NA 10.4 14.3 and OBC tween social identity educaof Low of Low of Incidence Shareof Incidence SocialGroup Proportion NA 4.6 2.9 Others Education Middleand Poorand Education tionalattainments. Extremely Unorganised Income Vulnerable among Poor in Poorand Workers High among All 15.4 13.0 10.2 has Overtimethere been some and Poor TotalWorkers among Unorganised Workers SocialGroups Vulnerable and vulnerable Marginal changebutwe havecharacterised Others ' 1 1 1 1 1 51.8 55 4 ST/SC 55.2 thespeedofthischangeas "snail's OBC 2 2 2 2 2 49.5 52.4 Muslims 53.4 2_ 3 3 3 3 3 3 layers Muslim pace". For the two bottom NA 54.7 51.5 OBC 4 4 4 4 4 i of the social category, e, sc/st SC/ST 4__ NA 36.7 27.7 Others the and position. in position 4 indicate leastfavourable the and Muslims, changeis largely Ranking descendingorder.1 indicatesthemostfavourable All 459 48.0 44.2 the forms bottom from poverty to vulnerability. The sc/st population layerin all respects Poor and vulnerable 74.3 77.6 78.2 ST/SC thenobcs and the here.Thisis followed Muslims, the speed of change is considered __ by Perhaps 71.7 67.7 72.7 Muslims is also determined a combination top layerby Others.Whatis striking the evidencethatthis by 61.9 NA 69.0 OBC and hierarchical and of social identity educational systemic along social groupsis segmentation NA 41.3 30.6 Others acrosseconomic also reflected endowments. by represented consumpgroups 54.4 61.3 61.0 _AII status. work and the formidablecon- tion classes,loweducation informal expenditure Despite Middle and high income is these economicgroups,the onlychange in ranking to seems provide Within education straints, 25.7 22.4 21.8 ST/SC in ofobcs and Muslims terms the within intermediate thebesthopefor 27.3 32.3 category 28.3 Muslims overcoming povhas The The 38.1 NA 31.0 and vulnerability. speed ofpercapitaconsumption. latter a marginally OBC higher per erty thepoorandvulnerable NA 69.4 58.7 Others than former the wher- capita of change has been faster among consumption 45.6 38.7 39.0 are whenall economic ever the educationalattainments butthisedge is absent groups combined. _AII Total and the Table23 summarises systemic hierarchical are higher. ordering. 100 100 100 ST/SC Whenwe examinetheinformal 100 100 100 Muslims workstatusof the earnersin the 8 Conclusions NA 10C 100 OBC of morethanthree-fourthstheIndian thata little thereis a close asso- Our estimate households, 100 NA 100 Others in and peopleare poorandvulnerable 2004-05,basedon a valuethat ciation with social identity 100 100 100 All with other informal is double the official loweducation. povertyline, is consistent Therefore, 2006 of For and acquired estimates. example,the World of an Report Development workstatusis often outcome the inherited as Bankreports per centoftheIndianpopulation inthat a theWorld acts 35 Here endowments. again,education as a moderator lineofone ppp$ perday. belowtheextreme in lesspov- living results workers of levelofeducation informal poverty higher with been somedissatisfaction theuse of Therehas,however, in This and wayin that erty vulnerability. also works a dynamic data obtained from the consumerexpenditure education outofpoverty withhigher workers survey(ces) thoseinformal get with the neces- national sample surveysbecause of its difference it faster andvulnerability thanothers. Therefore, is hardly in as reported theNational final of estimates private and skilldevelopthe consumption saryhereto emphasise roleof education has Statistics Accounts (nas). The problem been compounded sector. of ment thoseintheinformal betweenthe two sources.Several the increasing of in is There considerable disparity expenditure by disparity theconsumption and the consensushas and withthatofthemiddle highincome scholarshave addressedthis problem thepoorandvulnerable thanthenas. Whilethere ces data is morereliable Whatis disturb- beenthatthe over and group ithas beenworsening theyears. such of sources difference as theconsumption of rateofgrowth consump- are somegenuine thatshowsa slower ingis thetrend serious doubts have been raised witha smaller institutions, tionofthepoorandvulnerable averagepercapita by non-profit in final of the to consumption thenas.5 compared the middleand highincomegroup regarding estimation private consumption that is There alsotheargument thebiasinreporting that consumption with much a averageconsumption has been growing higher than in ofthe manifestation increasing groups faster. isa clear This much disparity in theces is morepronounced theupperincome trueofconsumption This is especially thepoorand vulnerable. withdifferent betweenthe haves and have-nots consumption of "twoIndias", outsidethehousehold, about talked to luxury goodsand Thesenumbers baskets. purchase expensive point theoften events so on.Thequestion and and of celebration marriages other one. one and a shining resurgent and a suffering labouring yet
weekly & Economic Political GEE3 march 15, 2008 59

undercurrentwhatwe would of we is What havefound a strong basedon social and liketocall systemic hierarchical segmentation we an differentiation that find economic Itis on topofthis identity. and that thinner thinner of interms thelevelofconsumption gets This systemic hierarchical and as we go downthesocial ladder. and in of alongsocialgroups terms poverty vulnersegmentation in and is work informal status, education also reflected per ability, Whatthis status in groups. poverty capitaconsumption different is conveys thatan sc/st pooris notthesame as thepoorMuslim is of The orpoorobc nottospeakofthepoorOther. depth poverty of the evenwithin category poor. socialgroups notthesameacross

SPECIAL ARTICLE eeee

in not of increasing differences however, yetbeen settledor arecollected theemployment-unemployment butthese has, surveys) with incidence poverty of and are striking their in the is association near consensus.This subject,therefore, likelyto anywhere of indicators Thereare otherequallycompelling in remain challenge experts thefield. a for vulnerability. undernutrition or such children off deprivation as infant If the reported mortality, by expenditure the better consumption with that anaemia amongadultwomen.Our analysisherestarting sections a downward has bias,thenitmaybe hypothesised educational them with and linking the difference living in standards between poorand consumer theperceived social, expenditure is case for dimensions us thatthere a strong tell and status vulnerable thehigher and income (middle high income) and work groups multidimensional of poverty, however data as revealed theconsumer profile expenditure is an underestima- buildingup a by be. The would complex exercise the tionoftheactual differences. problem inequality of might The idea is notto reduceeverya for intoa singleindexbut to provide framework using for than thenassumefarmoreseriousness itsimplications what thing indices of deprivation for specificpolicies and is madeouton thebasisofconsumption appropriate expenditure. for We wouldalso liketo comment theofficial on line ratherthan a singlemeasureof poverty all poverty on programmes This that of of thebasisofwhich estimates theincidence poverty made. programmes. will also be a formal are acknowledgement to line development multidimensional in itsbasicsenseofa life is even It is highly questionable relyon an unchanging poverty in of And is Indiashould strive bypursuing for an for adjusted only price changes, terms consumer expenditure with dignity. this what an in and justinclusive since early the 1970s(i e, 1973-74) despite increase percapita agendaofinclusive development not growth. income substantial overthe and changesin consumption pattern Meetingsuch a challengehas to certainly beyondmere go the in of last31years(i e, as of2004-05).Forexample, officiai interventionsterms schemes programmes. and poverty government linewas Rs49.63for rural areas (Rs 56.76for in The entrenched and urban)in1973-74 systemic hierarchical segmentation cutting of terms mpcewhenthepercapitagdp permonth was Rs 88.58 acrosspoor and non-poor to be acknowledged a"social has as line It and therural economic of differentiation poverty was thus56 percent(64.1percentfor problem. is on topofthatone finds line bothsocial and economic urban)ofpercapitagdp.In 2004-05,theofficial poverty was varying degrees.Therefore deprivaRs 356.30(mpce)for ruralareas (Rs 538.60 for of urban)whenthe tionsare facts lifein India,butthesocial deprivation arising gdpstoodatRs 2,183.42 month,e, thepoverty i line outofsocialidentity e, caste/community) tobe so deeply seems (i percapita per was 16.3 per cent (24.7 per cent forurban).The notionof an entrenched it cannotbe brushed that aside by addressing only of absolute minimum a basketofgoods yielding calorievalue economic a Thereis a strong for case addressing social deprivation. essential items losesmost itssignificance a growing and economic of in In plus-some deprivation together. thatsense,theexistence relative percapitaincome. to should reckoned of a "creamy be economy Poverty layer"of middleand highincomegroupin every inrelative to terms capture inequalities thesystem. the in Thereis socialcategory theneedtoidentifyis extremely and it important. absolute aboutan absoluteminimum a poverty for line Our attempt quantify to thesewould go a longway in giving nothing whentheeconomy on a growth is kind. shapetoa coherent comprehensive and macrosocialpolicy. pathofan unprecedented Thatthispoint notbeenfactored, justin Indiabutevenin has not Thereis also an immediate needto actthrough employment an some othercountries with much faster ratesof growth(e g, policybecause the majority the poor and vulnerable the of are reflects eagerness showa declining an to trend in working without socialprotection meaningful or China), perhaps poor any promothe down"growth. tion.Theyare either or without job or, thatmatter, magicof"trickle poverty for unemployed employed any Thereis no doubtthatthe case forrevisiting poverty the line security earningcapacityabove the minimum or subsistence. wouldbecome as continues grow.6 to Theseare theinformal unprotected or workers thewayoutis and stronger theeconomy and mainly through adequateemployment itsquality regularity, Use of OfficialPovertyLine decent theselfemployed), and/or social (for wages productivity In thispaper, have notentered we intothesediscussions we security working as and conditions. Measures improve living to the haveusedthepoverty onlyas a benchmark decomposing conditions theself-employed to be multifaceted line for of need through thetotalpopulation sixdifferent into in terms poverty suchmeansas security assets(e g,land),accesstocredit, of of skill groups, status. haveaccepted official We the of definition thepoverty line upgradation, and technology. thewagelabour has For it marketing as theabsolute minimum standard living different of at of to be through better conditions by ensuring and skills, points working time anddivided Indianpopulation groups the into withaverage decentwages. Boththesegroups need social security protect to ofup to 0.75ofthepoverty (pl) 0.75 them line from suchcontingencies sickness sucheventualities as and as percapitaconsumption to ipl, 1 to 1.25,1.25to 2pl, 2 to4PLand above4pl. Thisallowed oldageanddeath. goeswithout It that interventions can saying such us togobeyond absolute the minimum to norm look be justified from botha growth/development as well as equity expenditure at therelative status different of ofourpopulation evolv- perspective. pose themas tradeoffs notonlyshort-sighted To is groups the multidimensional elementsof butcouldbe counterproductive toachievethelimited even ing over time,combining objecwhich inessence,reflects. tiveofinclusive It that deprivation poverty, growth. is thisperspective led us and our The need to adopt indicatorsof deprivation, other than colleaguesat the NationalCommission Enterprises the for in consumer is so compelling the Indiansituation Unorganised in Sector undertake detailed to a of expenditure, analysis thecondithatthecase for multidimensional a is In tionsofwork and livelihood issuesof theinformal or approach quitestrong. promotion thisanalysis havebeen able to bring directly we in workers thiscountry putforward package in and a onlyindica- unprotected tors education, on socialstatus and activity status(becausethese ofimmediate measures actionas a matter priority.7 for of
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-= NOTES

SPECIAL ARTICLE

1 We do notintend deflect attention to our hereto the continuing debate on the beginning the of in acceleration theIndianeconomy. While growth some economists pointout early 1990s as the coincides withthelaunchofa turning point(that and sectorreform majorpro-market pro-private thereare others who pointout that programme) and early1980sas theturning point[e g, Rodrik work Subramanian econometric in 2004]. Recent this areapoints totwoturning out the points, first beingin the earlyseventies[e g, Balakrishnan and Parameswaran 2007] implicitly recognising the importance economicpolicies and proof two and carriedout duringthe first grammes halfdecades of independent India. While such we research exercisesare likelyto continue, do not think thateconomicpolicycan be delinked from larger the context whatpolitiand political aboutIndia'snationalinterest. cal leadersthink One of us has writtenon this subject [e g, i, Sengupta2001: Chapters 2 and 6]. A notable in and earlycontribution this area is that by Frankel (2005). of to 2 This is similar the estimates the Planning Commission usingthemixedreference period by to (MRP)data.Thiswillincrease 28 percentifwe use theuniform reference period(URP) data. We for havechosentheformer the sake of comparisonwith1999-2000and 1993-94. the 3 We follow definition adoptedbytheNational in Commission Enterprises the Unorganised for Sector (NCEUS). According to the NCEUS, workers consistof those working "unorganised or in the unorganised enterprises households, withsocial security regularworkers excluding in and the workers the formalsector benefits, benefits without employment/social security any

- (2006): 'Social,Economic Educational Status and For details, see provided by the employers". in of the MuslimCommunity India: A Report', NCEUS2007. Cabinet PrimeMinister's of HighLevelCommittee, 4 The averagedailyper capitaexpenditure the NewDelhi. Secretariat, was Rs20 in2004-05.Theother vulnerable group the Seminaron Revisiting poor and extremely poor IHD (2007): 'International groupslike marginal, and Identification of Issue: Measurement, have averagemonthly capitaexpenditure Poverty per InSeminarPapers' (unpublished), lessthanRs 20. Eradication, New of stitute HumanDevelopment, Delhi. discussion thesourcesofdifof 5 Foran informed of B of as ferences wellas thelimitations NASand the Minhas, S (2005): 'Validation Large-Scale Sample of Data: Case ofNSS Estimates Household of in Survey reliability CES,see Minhas Deatonand higher in Kozel (2005). Also see the articlesby Sundaram Consumption Expenditure' Deaton and Kozel in andTendulkar Deatonand Kozel(2005). (2005). 6 Manycountriesin the world,especiallyin the NCEUS (2006): Reporton Social Security Unorganised for for in Commission Enterprisesthe National on line entirely a Workers, EuropeanUnion,set poverty NewDelhi. ofIndia, Government relative basis. Also see, forexample,thepapers Sector, Unorganised Alsoavailableinwebsite:www.nceus.gov.in presented in the InternationalSeminar on - (2007): Report Conditions Work Promoand on Revisiting Povertyheld in Patna during2007 of Nain tionofLivelihoods theUnorganised [IHD 2007]. T N Srinivasan,one of the high Sector, in in for tional Commission Enterprises the Unorpriestsof the neoliberaleconomic reforms the advocatedrevising offiof Government India,NewDelhi. India, has recently ganisedSector, PL. line to two timesthe current cial poverty Alsoavailableinwebsite:www.nceus.gov.in See, Srinivasan(2007). D Rodrik. and A Subramanian (2004): 'From"Hindu of to Growth" Productivity 7 See NCEUS(2006 and 2007). Surge:The Mystery NBER working the Indian GrowthTransition'. paper10376. Equityand the Sengupta,ArjunK (2001): Reforms, REFERENCES PubliIMF (See Chapters 2, and 6), Har-Anand 1, NewDelhi. P cations, (2007): 'UnBalakrishnan, and M Parameswaran S of Sivasubramonian, (2000): The NationalIncome derstandingEconomic Growth in India: A Oxford Indiain theTwentieth University Century, Prerequisite'in Economic& Political Weekly, NewDelhi. Vol42, Nos27 and 28,July 14. Press, Indian Srinivasan, N (2007): 'Poverty Great Linesin India:ReflecKozel(ed) (2005):The T A Deaton, andValerie & in the MacMillan tions after PatnaConference' Economic PoIndia,NewDelhi. Debate, Po\1wty Vol liticalWeekly, 42,No 41,October 13-19. Frankel, F R (2005): India's Political Economy, Uni- Sundaram, and S D Tendulkar EsOxford TheGradualRevolution. K (2005): 'NAS-NSS 1947-2004: Estifor Press. of timates Private Consumption Poverty versity in Examination' mation:A Further for Estimates of Government India (2007): 'Poverty Comparative Deatonand Kozel (2005). New Commission, Delhi. 2004-05', Planning

Appendix:A Methodological Note on the Analysisof Poverty

to fordifferent exceptthatthe itemsrelating medical groupsof items, were includedin the reference periodsof 30 days (non-institutional) and 365 days. In the 55throundconsumer during surveyconducted expenditure 1 The Data Sets periods used for 1999-2000, therewere variationsin the reference data. In the case of food,pan, tobacco in of of The estimates incidence poverty India are traditionally being the collectionof consumption reference the quinquennialconsumerexpenditure from surveysun- and intoxicants periodsofbothsevendaysand 30 dayswere computed to was instructed collectthe staff and thefield data collection dertaken theNationalSampleSurvey (nsso). The last used for Organisation by the and thereafter data wereduring in three 1999-2000and 2004- data based on 30 days reference period first 1993-94, surveys thisregard each of based on sevendays. In the case of fueland light;and miscellaneous werecollectedfrom data on consumption In thesesurveys, 05. data the in households a detailedschedule theselected containing list goods and servicesincludingmedical (non-institutional), were sample of 30 days as in the case of 61st intothe following collectedbyusinga reference classified itemofconsumption, conceivable ofevery period round.In the case of all otheritems,a reference and broadgroups placedindifferent periodof 365 days blocks, statedata. A comparative of was used forthecollection consumption and intoxicants, tobacco (i) food, pan, the mentindicating reference and light, periodsused foreach groupofitemsfor (ii) fuel data in the threeroundsof surveyis the collectionof consumption etc, (iii) clothing, bedding, givenbelow. (iv) footwear, and (v) education medical(institutional) goodsand services, Reference Periods Used for the Collection of Consumption Data in the Last Three (vi) miscellaneous goods and services including medical (non- Rounds of Consumer Expenditure Surveys (in days) and 61stRound 55thRound 50thRound institutional), SI No Itemgroup and (viOdurable repair maintenance. goodsincluding 30 7 and 30 30 1 Food, pan, tobacco and intoxicants conducted In theconsumer 2004-05,conduring survey expenditure 30 30 30 Fuel and light 2 fuel tobaccoand intoxicants; and light; of data sumption in respect food, 30 and 365 365 30 and 365 and bedding Clothing a werecollectedfor periodof30 3 and miscellaneous goodsand services 30 and 365 365 30 and 365 4 Footwear In to daysprior the date of survey. the case of otheritemgroupslike 30 and 365 365 Education and medical (institutional) 30 and 365 and 5 medical (institutional) education, bedding,footwear, clothing, Miscellaneous goods and service the bothfor last30 6 werecollected data on consumption durable goods, 30 30 iO and 365 (a) medical (non-institutional) in the against daysand for last365 daysand recorded separatecolumns 30 30 to instructed (b) Others has item. The fieldstaff been specifically each individual _30 30 and 365 365 Thusa 30 and 365 and byseparateprobing. 7 Durable goods bothsetsofdata independently collect the reference periodofboth30 daysand 365 dayswereused for collecbased on 50th of of In the computation head countratiosof poverty of data of tion consumption inrespect theabovegroups items. reference In the 50th roundconsumer during Round Survey,the data collected by using the uniform surveyconducted expenditure also thedatawerecollected usingthesamereference periods period of 30 days only were used thoughdata were also collected by 1993-94
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SPECIAL ARTICLE

forsomeof the itemgroups usingreference revealedbytheemploymentexpenditure pattern by periodsofboth30 days to theconsumption and 365days. survey. unemployment the ratios estimated Abhijit In 55thround, data werenotcollected usingthereference In thecase of50thround, headcount as by by period esand as sucha uniform wereused instead theofficial of of30 daysfor someoftheitems reference period Sen byusingmixedreference period couldnotbe usedfor computation Head Count the of Ratios. based on uniform reference the Accordingly, timates period.However, unitleveldata the based on uniform reference of was theincidence poverty estimated usingthedata setsofmixed sets contained mpceestimates period. by in lineswereadjusted usingthe reference Therefore, thiscase also thepoverty by periods. The head countratiosbased on the 61stroundconsumer expendi- samemethodology. out and mixed The adjustedpoverty lineswerethusworked bothforruraland ture surveywere estimatedby using both the uniform based reference periods.Thus any comparisonof head count ratiosacross urbanareas at theall Indialeveland at thelevelofeach state/UTS at levelis done ratios. analysis thenational The the threeroundscan ony be based on mixed reference period, as on therespective poverty the ratiosbased on uniform reference linesand theanalysisat thestatelevelis periods cannot be computed byusingtheall India poverty for donebyusing statelevelpoverty lines. 1999-2000. the estimates poverty of ratios 1993-94 for werebased Though official 3 Classificationof Households and Persons on data sets of uniform reference Sen, has periodof 30 days,Abhijit the ratiosbased on mixedreference data for by PovertyStatus estimated poverty period Themembers eachhousehold thesample of wereclassified extremely as in comparison purposes. income middle class and higher status of individualmembers poor,poor,marginal, The educational and employment vulnerable, group used households. specific The criteria of the householdsare not collected in the consumerexpenditure basedon mpceofthecorresponding classification inrural both and urban areasarethefollowing. not surveys.It is, therefore, possible to analyse the nexus between for Poor ifmpce<= o.75times Line and socio-economicvariables like educational Extremely the level of poverty Poverty (pl) if0.75pl<mpce<= ipl attainment, status, etc, based on data sets available Poor employment if1 pl<mpce<=i.25 pl from consumer surveys.Data on consumerexpenditure Marginal expenditure if1.25pl<mpce<=2.o pl collectedin the nss 55thand 61stroundemployment- Vulnerable were,however, if2.0 pl<mpce<=4.o pl in unemployment surveys an abridgedblockbyusingmixedreference MiddleClass Income ifMPCE>4.0PL Group period. In the case of nss 50th round,the sample householdsfor Higher The limits worked for out each oftheyears1993-94,1999-2000and consumer and employment-unemployment were expenditure surveys of classification giveninTables1 to3. are the same. The averagemonthly capita consumption per expenditure 2004-05interms mpcefor the availablefrom consumer schedule was thustransferred By comparing Table 1: expenditure MonthlyPer Capita ConsumptionExpenditureLimits to theemployment-unemployment scheduleofeach household. theaveragempce (1993-94) survey These data itemscontainedin theemployment-unemployment sched- of each sample Poverty in Status MPCELimit Rupees ules were,therefore, used for Rurai Urban crosstabulation and analysisoflinkages household with the mpce limits betweenpoverty varioussocio-economic and characteristics. MPCE<=145.28 MPCE<=201.47 Extremelypoor mentioned above, Poor 145.28<MPCE<=193.70 201.47<MPCE<=268.63 2 Adjustmentof PovertyLines every surveyed 193.70<MPCE<=242.1 3 268.63<MPCE<=335.79 Marginal Theheadcount ratios poverty estimated thePlanning of are Commis- household and by Vulnerable 242.13<MP<=387.4Q 335.79<MPCE<=537.26 in sionbyusingthe distribution the households monthly capita theindividuals of by per 387.40<MPCE<=774.80 537.26<MPCE<-1074.52 classes as available from con- them were clas- Middle class consumption expenditure quinquennial MPCE>1074.52 sumerexpenditure lines obtained by updating sifiedintoone of Higherincomegroup MPCE>774.80 surveysand poverty those denned by an ExpertGroup in 1993 separatelyforrural and theabovepoverty Table 2: MonthlyPer Capita ConsumptionExpenditureLimits urbanareas in majorstates.These poverty linesare based on consumer statuses. (1999-2000) in were collectedfor expenditure surveys whichdata on consumption Status in MPCELimit Rupees Poverty each individual itemin each group.In the case ofemployment-unem-4 Estimation Rural Urban and Analysis are collected by using an ployment surveys,data on consumption MPCE<=228 MPCE<=314 Extremelypoor leveldata blockin whichonlysome majoritemsand itemgroupsare Theunit abridged Poor 228<MPCE<=304 314<MPCE<=419 listed.Thus,the averageconsumption as from sets providedby expenditure computed 304<MPCE<=380 419<MPCE<=524 Marginal employment-unemployment schedule is expectedto be lower the nsso consurvey 380<MPCE<=608 524<MPCE<=838 thanthat obtained from schedule. The poverty tained household Vulnerable expenditure consumption 608<MPCE<=1216 838<MPCE<=1676 linesare, therefore, to level multipliers Middleclass requiredto be adjustedto makethemconform MPCE>1676 thelevelofconsumption as obtaining expenditure revealedbythe employment- for popu- Higher income group MPCE>1216 lation estimates. unemployment survey. The consumption expenditureblock in both the 55th and 61st These multipliers Table 3: MonthlyPer Capita ConsumptionExpenditureLimits (200*4-05) round of employment-unemployment surveys used a reference were workedout Status in MPCELimit Rupees Poverty data on food,pan, to- on thebasisofthe periodof 30 days forcollectingconsumption Rural Urban bacco and intoxicants; fuel and lightand miscellaneousgoods and sampling design MPCE<=259.65 MPCE<=385.50 poor Extremely services.Forall otheritems,a reference the periodof 365 days was used usedfor selec- Poor 259.65<MPCE< =346.20 385.50<MPCE<=514.00 fordata collection.Therefore, poverty of the ratiosfromemployment- tion households 346.20<MPCE< =432.75 514.00<MPCE<=642.50 Marginal the The unemployment surveycan be estimatedby using only the mixed for survey. 432.75<MPCE<=692.40 642.50<MPCE<=1028.00 reference esti- Vulnerable period. population 692.40<MPCE<= 1384.80 1028.00<MPCE< =2056.00 In view of the above,head countratiosas estimated obtained from 55th mates the by Middleclass and 61stround consumer thesemulti- Higherincomegroup MPCE> 1384.80 MPCE>2056.00 expenditure surveys usingthemixedrefer- using by ence periodwere assumedto be the trueindicators poverty. of These plierswere,howhead-count ratios estimated as from consumer the due expenditure surveys ever,lowerthan the census populationestimates/projections to weresuper-imposed thedistribution persons percapitamonthly variousreasons.The givenmultipliers, to of needed further adtherefore, by to to (mpce)classes as obtainedfrom consumption expenditure employment- justments correspond census population.The ratiosof the proto mpce jected censuspopulation thedesign estimate each ofthepopulation in unemployment surveysand interpolatedthe corresponding level.These mpce levels were takenas the poverty of lines conforming segments theruralmale,ruralfemale, urbanmaleand urbanfemale
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SPECIAL ARTICLE

These were were used forobtaining populationadjustedmultipliers. of usedfor estimates varioustotals, averagesand distributions. deriving and Theanalysisofvariousaspectsofpoverty itslinkageswithdifferwas done on the basis of the estimates factors ent socio-economic obtained. thus has socialgroups been of to Theincidence poverty relation different in to on thebasisofresponses thefollowing (i) questions: houseanalysed socialgroup. and holdreligion, (ii) household has of in The household religion respect each samplehousehold been codes: in of indicated terms thefollowing Hinduism Islam2, Christianity Sikhism Jainism Buddhism 6, 5, 4, 1, 3, Zoroastrianismand Others 9. 7, of in has socialgroup been indicated terms thefollowThehousehold and 61stround: ingcodesbothin55th Scheduledtribe i, scheduled caste 2, otherbackwardclass 3, and Others 9. 'other backwas no separatecode givenfor there In the50thround, wardclass'. levelhas to in of The incidence poverty relation generaleducational each indidetailsavailablefor on beenanalysed thebasisofeducational of in levelhas been recorded terms the educational vidual.The general codes. following formal without egs/nfec/aec tlc Notliterate Literate 02, 01, schooling: belowprimary Primary Middle07, SecOthers Literate: 06, 05, 04, 03, Graduate course11, 10, 08, secondary Diploma/certificate ondary Higher and 12,andPostgraduate above13. and course code for was no separate There diploma/certificate in55th 50throunds.

has The employment statusof personsin relationto poverty been status(upss). The usuand subsidiary analysedbyusingtheprincipal status(ups) conceptclassifiesa personintolabour force al principal or outside the labour forcebased on major time criterion.If the for or personhas been eitherworking seeking/available job during majorpart of last 365 days the person is classifiedas belongingto to as A thelabourforce. personthusclassified belonging labourforce classifiedinto workeror unemployed is further again based on the duringwhichhe was in the labour forcein the majortimecriterion last 365 days. for who had worked at least even thosepersons In theupss concept, or the 30 days during last 365 days thoughunemployed out of labour as as force perups werealso treated workers. has status in The averagempceofpersons each poverty category been the estimated dividing aggregate expenditure monthly consumption by of withthe totalnumber (mce) of all the householdsin the category in persons thatcategory. itemsin the analysisincludefueland light, The essentialnon-food Durablegoods includefurniture, and beddingand footwear. clothing cooking and household appliances, recreationalinstrucrockery, ments,personal transport, personal goods and repair and maintenance of residential buildings.Other non-fooditemsincludeentertainment expenses, personal care expenses, toiletarticles,conveytaxesetc. ance,rent, for The item-wise expenditure the year1999-2000 is consumption on of the estimated applying proportion expenditure variousitems by to survey expenditure groupas revealedbyconsumer byeach poverty thetotalsobtainedfrom survey. employment-unemployment

Post-Doctoral Fellowship Programme 2008

in Overview: The Post-Doctoral Fellowship (PDF) Programmehas been instituted IGIDR as part of its outreach activities.Its objective is to are available per academic record. Up to three fellowships supporthighqualityresearch by scholars witha doctoraldegcee and an outstanding are grantedforan initial period of one year, whichcan be extended by a maximumof one more year. year. The fellowships under40 years of age, and should have obtained a Ph.D. degree in the broad areas should be residentIndians preferably Applicants Eligibility: of Economics, including Policy. Development,Energyand Environment if the listof publications, any, (2) Synopsis of the applicant's vitae, including Application: Completed applicationshould include (1) Curriculum Ph.D. thesis (ifneed be, the applicantshould be prepared to send a copy of the thesis), (3) Proposed plan of Post-doctoralworkat IGIDR (not in paper published/presented academic journals/conferences Sample' whichcould be an articleor a scholarly exceeding 3 pages), (4) One 'Writing the supervisor, of the from applicant'spast academic work, Two recommendations, whichone should be from applicant'sdissertation or extracts (5) of statingthatthe the applicant's university from or registrar/head the department and (6) Photocopyof the Ph.D. degree certificate a certificate awarded the Ph.D. degree. applicanthas been provisionally properchannel. An advance copy of the applicationmay be sent to IGIDR for In case of juniorfaculty, applications should be routedthrough consideration. conducted at IGIDR. Selection: The PDF Committeewillselect the candidates based on an evaluation of theirapplicationand an interview

Five Thousand Only) per month.The Fellowship: Post Doctoral Fellows will receive a consolidated amount of Rs.25,000/- (Rupees Twenty 3-tierAC trainfare fromthe place of their months.Fellows willalso receive one return is fellowship payable up to a maximumof twenty-four who come on In case of juniorfaculty permanentresidence. They willalso be providedon campus accommodationdepending on availability. theirsalary subject to the discretionof the Director/ leave and whose salary exceeds the fellowshipamount, IGIDR may consider protecting PDF Committee. facultypositions at fixed term positions that are completelyindependentof entry-level Responsibilities: Post Doctoral Fellows are full-time papers per year, IGIDR The grantees would be independentto pursue theirresearch plan, and are expected to produce at least two working and give at least two seminars at IGIDR each year based on the workdone by themat IGIDR. In addition,the grantees are expected to comply and other computing withany otherworkassigned to them by the Director. They would be providedofficespace and have fullaccess to library, of facilities the Institute. to reach IGIDR by 15 April 2008. Letters of or Application Deadline & Notifications: Applicationscan be sent electronically by post The subject head foremail and top of the envelope to should be sent by the concerned persons directly IGIDR via email/post. recommendation will notified by forpost should indicateAPPLICATION FOR POST-DOCTORAL FELLOWSHIP PROGRAMME 2008. Candidates forinterview be by are scheduled to be held duringJune 2008. Award of Fellowships will be notified email/postby by email/post 31st May 2008. Interviews by 30thJune 2008. Awardees are expected to join the Institute 18tAugust 2008. Address for Communication: Post-Doctoral Fellowship Programme 2008 Indira Gandhi Instituteof Development Research (IGIDR) Gen. A. K. Vaidya Marg, Goregaon East, Mumbai 400065 Email: pdf@iqidr.ac.in Phone: +91-22-28416200

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