Performance of States in Poverty Reduction

We analyse the performance of states in poverty reduction between 199/94 and 2009/10 and examine whether there is any polarization tendencies among the states in terms of poverty level, performance rate in poverty reduction and growth. The progress made by the states in poverty reduction is measured by computing Performance Index (PI)^[1]:

where, P stands for incidence of poverty and P_min/P_max for minimum/maximum level of poverty incidence.

Table 3.10 provides state wise incidence of poverty in 1993/94, 2004/05 and 2009/10 and the values of the performance index. Figure 3.4 shows performance of the states/UTs in terms of poverty reduction between 1993/94 and 2009/10 and the poverty level in 2009/10. It is evident that Puducherry, Himachal Pradesh, Jammu and Kashmir, Kerala, Tamil Nadu, Goa, Sikkim and Andhra Pradesh had good performance. They also had lower incidence of poverty in 2009/10. Of these, Puducherry performance was the best in poverty reduction and had lowest incidence of poverty in 2009/10 (Fig. 3.4).

At the other extreme, Mizoram, Nagaland, Chhattisgarh, Delhi, Bihar, Madhya Pradesh, and Uttar Pradesh performed the worst in poverty reduction. These states except Delhi also had high incidence of poverty in 2009/10. It is worth noting that incidence of poverty worsened during 1993/94 and 2009/10 in Mizoram and remained at the same level in Nagaland.

Table 3.11 cross classifies the states on the basis of their ranking on growth and poverty reduction. It is interesting to observe that 17 of the 27 states fall on the diagonal cells. This shows positive relationship between growth and poverty reduction which is in line with poverty regression results discussed in Sect. 3.5. The positive outliers on poverty reduction are Arunachal Pradesh, Tamil Nadu, Jammu and Kashmir, Jharkhand and Meghalaya, and negative outliers are Gujarat, Haryana, Bihar, Chhattisgarh and Delhi. The states with low growth, performed poorly in poverty reduction between 1993/94 and 2009/10 and high incidence of poverty in 2009/10 are Assam, Madhya Pradesh, Manipur, and Uttar Pradesh. Though growth was moderate between 1993/94 and 2009/10 in Bihar and Chhattisgarh, their performance in poverty reduction was poor and their levels of poverty were high. Clearly, in these two states growth did not trickle down to the poor.

On the whole, there seems to be polarization tendencies in terms of growth, poverty reduction and poverty rate in 2009/10 between {Puducherry, Himachal Pradesh, Jammu and Kashmir, Kerala, Tamil Nadu, Goa, Sikkim and Andhra

Table 3.10 State-wise poverty ratio and performance index: 1993/94, 2004/05 and 2009/10

Note For computing Performance Index, the maximum poverty considered was 65.17% which was the incidence of poverty in Manipur in 1993/94 and minimum poverty was 1.2% which was the incidence of poverty in Puducherry in 2009/10. The states are arranged based on their performance in poverty reduction between 1993/94 and 2009/10

Fig. 3.4 Performance of states in poverty reduction (1993-2010). Note For abbreviations see Table 3.14

Table 3.11 Classification of states by growth and poverty reduction

Note The figures in the parentheses are incidence of poverty in 2009/10. Annual growth rates of per capita SGDP and performance index in poverty reduction are ranked by descending order of magnitude and classified into three groups High, Medium and Low

Pradesh} and {Manipur, Assam, Uttar Pradesh, Madhya Pradesh, Bihar Jharkhand and Chhattisgarh}. As will be seen, the latter group of states had high incidence of multidimensional poverty as well as high levels of multiple deprivations.

• [1] We have used the performance index proposed by Kakwani (1993) which takes into account thevariations in the base poverty levels of the states and has some desirable properties.