Introduction

The measurement of economic welfare is generally based on the proposition that the welfare of an individual depends on the commodities consumed by the individual, which in turn, depends on the level of total expenditure and the prices that the individual faces. The social welfare approach to the measurement of economic welfare of a group involves the use of Social Welfare Function (SWF) for aggregation across individual welfare levels which involves normative judgments and presupposes prior agreement on the form of a SWF. Adopting the Social Welfare Approach proposed by Atkinson (1970) for the measurement of peoples’ economic welfare, this paper analyses the trends in welfare in the post reform period for which more or less comparable NSS data on consumer expenditure are available. It also analyses the welfare levels of population subgroups of the rural and urban areas. The trend analysis enable us to examine whether there is a significant improvement in the economic welfare of all population sub groups of rural and urban areas in the post reform period and also whether the inequality worsened over time.

This paper makes use of the poverty lines and rural-urban, inter-state and inter-temporal price adjustments of the Expert Group on Review the Methodology for Estimation of Poverty (Tendulkar Committee, GoI, 2009) without entering into the debate on the poverty lines and evaluates the performance of the states in the welfare improvement; and the reduction of poverty and inequality in the post reform period. For poverty analysis, this paper uses price adjusted data of three NSS quinquennial rounds (1993/94, 2004/05 and 2009/10). The change in the incidence of All India poverty between 1993 and 2010 has been decomposed into the effects of rural-urban and inter-state differences in growth and inequality. For the inequality analysis, we make use of Atkinson inequality measure supplemented by Gini coefficient. Using inter-state data for 1993/94, 2004/05 and 2009/10, we investigate whether there is any systematic relationship between growth and poverty and also between growth and inequality. We also analyse relative poverty among social groups.

The measurement of poverty has largely dealt with economic deprivation in the income/expenditure space. There is an emerging view that poverty is an outcome of multiple deprivations and income poverty provides only a simplified view of poverty, and conceptualization of poverty should extend beyond what is captured by the money metric. Empirical studies demonstrate that elimination of income poverty may not, pari passu, provide freedom from other forms of deprivation. The income poverty line may not make adequate provision for the fulfilment of some of these basic needs. Hence this paper explores the possibility of analysing multidimensional poverty considering income/expenditure and nutrition dimensions by integrating the unit level NSS data on Consumer Expenditure, 2004/05 and unit level National Family Health Survey (NFHS) 2005/06 data on malnutrition. It also utilizes the other data sets on deprivations and ranks the states on the basis of multiple deprivations. This analysis is mainly driven by data availability.