57428 v2 PERSPECTIVES ON POVERTY IN INDIA Stylized Facts from Survey Data Overview THE WORLD BANK Washington, D.C. This booklet contains the Overview as well as a list of c~ntents from the book: Perspectives on Poverty in India: Stylized Facts from Suroey Data. To order copies of the full-length book, published by the World Bank, please use the form at the back of this booklet. ©2011 The International Bank for Reconstruction and Development I The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development I The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Contents Acknowledgments xi Abbreviations xiii C>vervievv 1 India's Poverty Challenge 1 Poverty on the Decline 4 City Size Matters: Urban Grovvth and Poverty 11 A Casual Transformation: Rural Nonfarm Employment 14 Beyond Consumption: Tovvard Health and Education for All, Haltingly 17 Rising Inequality: Cause for Concern? 23 Social Exclusion: Who Is Being Left Behind? 28 Concluding Remarks 33 Notes 35 References 35 1 Consumption Poverty and Grovvth 39 Consumption Poverty: Trends and Patterns 41 Has Poverty Become Less Responsive to Economic Grovvth? 58 Changing Drivers of Poverty Reduction 63 Thinking beyond the "()fficial" Poor 69 Notes 75 References 76 2 Urban Grovvth and Poverty in Tovvns of Different Sizes 81 Introduction 81 Trends at the National and the State Level 83 Poverty in Tovvns of Different Sizes 85 Urban Agglomeration and Poverty Reduction 98 Urban Grovvth Is a Source of Rural Poverty Reduction 105 Implications for Policy 109 Notes 111 References 112 Ill IV CONTENTS 3 A Casual Transformation: The Growing Rural Nonfarm Sector 115 India's Rural Transformation: In Slow Motion but Picking Up Speed 118 The Casualization of Nonfarm Work 120 Who Gets What Job? Does Nonfarm Employment Reach the Poor? 133 The Impact of the Nonfarm Sector on Rural Poverty: A Regression Analysis 141 Why Isn't the Nonfarm Sector Growing Faster? 146 Notes 151 References 152 4 Beyond Consumption Poverty: Nutrition, Health, and Education 155 Nutrition Outcomes: Short, Thin, and Wasted 156 Health Outcomes: Better but Not Well 164 Education Outcomes: In School, but Not Learning Very Much 168 The Need for Systemic Reform 176 Notes 178 References 181 5 Rising Inequality: A Cause for Concern? 185 Inequality Dynamics at the All-India Level 188 Inequality at the Local Level in Three States 194 The Structure of Indian Inequality 201 Notes 217 References 220 6 Social Exclusion: Who Is Being Left Behind? 225 Exclusion by Caste 230 Exclusion by Tribal Identity 241 Exclusion by Gender 252 Epilogue 262 Notes 262 References 265 Boxes 1.1 Poverty Lines and Poverty Measures 44 1.2 India's Poverty Lines Need to Be Overhauled 47 1.3 Developing Poverty Maps Using the Small-Area Estimation Method 54 CONTENTS v 1.4 National Sample Surveys versus National Accounts Statistics: Implications for Poverty and Inequality Measurement 59 1.5 People's Perceptions of What It Means to Be Poor 70 3.1 The Great Desire for Nonfarm Jobs 130 4.1 Tracking Nutrition, Health, and Education 161 6.1 Intergenerational Mobility for Dalits Is Visible, Albeit Limited 238 6.2 The Practice of Distress Migration among Adivasis 246 6.3 Mistrust Is a Barrier to Adivasi Access to Health Services 249 Figures 1 India's Middle-Class Lives Barely or Not Far above India's Poverty Line, and Below International Poverty Lines, Especially in Rural Areas 3 2 Evolution of Poverty since the Early 1980s 5 3 Evolution of Poverty, 1951-2006 6 4 NSS and NAS Consumptions Are Diverging 7 5 The Calorie-Income Puzzle: Declining Calorie Consumption during a Period of Rising Per Capita Expenditure 9 6 Poverty Rates in Indian States Span the Best in the Developing World to the Worst 10 7 Even Though Urban and Rural Consumption Levels Are Diverging, Rising Urban Inequality Explains Why Urban and Rural Poverty Levels Are Converging 12 8 Growing Poverty Impacts of Urban Economic Growth 13 9 The Nonfarm Sector Is Now the Source of Most New Rural Jobs 15 10 The Increasing Premium of Casual Nonfarm Wages Compared with Agricultural Wages 16 11 India's Educational Attainment Is below China 30 Years Ago 17 12 Health Outcomes Are Substantially Worse among the Poor 18 13 Children Learn Little Even after Spending 5 Years in School 22 14 India in International Comparisons of Inequality 24 15 Recent Trends Show Inequality on the Rise 26 16 Spatial Differences Have Grown 27 VI CONTENTS 17 Increased Returns to Education Are Driving Rising Inequality 27 18 In Terms of Poverty, Scheduled Tribes Are 20 Years Behind the General Population, and Scheduled Castes Are 10 Years Behind 29 19 Changes in Postprimary Education by Social Groups and Gender, 1983-2005 30 20 Fertility Is Declining, and Many Indian States Resemble More Developed Countries 32 1.1 Evolution of Poverty since the Early 1980s 43 1.2 Evolution of Poverty, 1951-2006 45 1.3 The Calorie-Income Puzzle: Declining Calorie Consumption during a Period of Rising Per Capita Expenditure 49 1.4 Evolution of Poverty across Indian States 53 1.5 Poverty Rates in Indian States Span the Best in the Developing World to the Worst 56 1.6 Uneven Progress in Reducing Poverty across States 57 1.7 NSS and NAS Consumptions Are Diverging 62 1.8 Urban and Rural Consumption Levels Are Diverging 64 1.9 The Postreform Process of Urban Economic Growth Has Brought Significant Gains to the Poor 66 1.10 India's Middle-Class Lives Barely or Not Far Above India's Poverty Line, and Below International Poverty Lines, Especially in Rural Areas 71 2.1 A Slow but Persistent Urbanization of Poverty 86 2.2 In Andhra Pradesh and Orissa Poverty First Rises with Town Size, but Then Falls 98 2.3 Poverty in a Town Is Higher the Farther the Town Is from a Large City 101 2.4 Only within a 100-200 km "Catchment Area" around Kolkata Does City Size Decline with Distance from Kolkata 104 3.1 The Rural Nonfarm Sector Is Expanding at a Slow, but Accelerating, Pace 119 3.2 Rural Nonfarm Sector Is the Source of Most New Jobs 120 3.3 Rural Nonfarm Sector Includes Not Only Manufacturing but Also Services and Construction 122 3.4 New Nonfarm Jobs Are Increasingly Available in Construction, Trade, Transportation, and Communication 123 3.5 Growth of All Three Types of Nonfarm Jobs, Particularly Casual Jobs, Has Accelerated 125 CONTENTS VII 3.6 The Declining Premium of Regular Wages Compared with Casual Nonfarm Wages 126 3.7 Emerging Dualism in Salaried Employment 127 3.8 The Increasing Premium of Casual Nonfarm Wages Compared with Agricultural Wages 128 3.9 Casual Nonfarm Jobs Pay Better Than Agricultural Wage Labor across the Distribution 129 3.10 Regular Nonfarm Workers Are More Likely to Be Found at the Top End of the Rural Income Distribution 134 3.11 Women Are Barely Transitioning into the Nonfarm Sector 135 3.12 Young Men Are the Group Most Likely to Enter the Nonfarm Sector 136 3.13 Participation of Scheduled Castes and Scheduled Tribes ·in the Nonfarm Sector Is Growing 137 3.14 Literacy Helps Exit Agriculture 138 3.15 Landownership Profile of Rural Workforce 139 3.16 Growth in Nonfarm Employment Is Spread Unevenly 148 4.1 Child Undernutrition Is Persistently High in India: An International Comparison 157 4.2 South Asian Women Are among the Shortest Women in the Developing World 158 4.3 Undernutrition Is Worse among the Poor but Not Confined to the Poor 162 4.4 Nutrition Is Worse in Poorer States 163 4.5 Health Outcomes Are Substantially Worse among the Poor 166 4.6 Health Indicators Vary Significantly across States and Are Weakly Correlated with Poverty 167 4.7 More Poor Children Are Attending Elementary School 171 4.8 Poor Children Are Less Likely to Attend Post-elementary School 171 4.9 India's Educational Attainment Is below China 30 Years Ago 172 4.10 Children Learn Little Even after Spending 5 Years in School 173 4.11 Highly Unequal Distribution of Cognitive Achievement in Secondary School in Two Indian States 175 4.12 The Poor Rely on Private Healthcare Providers Almost as Much as the Nonpoor 176 viii CONTENTS 4.13 The Public Sector Is the Dominant Provider of Schooling but Private School's Share Is Growing 177 5.1 Evolution of Inequality, 1951-2006 189 5.2 India in International Comparisons of Inequality 195 5.3 Local Poverty and Inequality in Rural West Bengal 198 5.4 Local Poverty and Inequality in Rural Andhra Pradesh 199 5.5 Across States, Rural Inequality and Poverty Appear to Follow a Kuznet's Relationship 200 5.6 Spatial Differences in Income between States Have Grown 203 6.1 An Overwhelming Majority of Scheduled Castes Work in Lower-Paying Occupations and Jobs 232 6.2 Wage Differentials between Dalits and Others Are Much Higher in Salaried Work 234 6.3 Changes in Postprimary Education by Social Groups and Gender, 1983-2005 239 6.4 Consumption Growth among Urban Scheduled Tribes Was Highly Skewed, with Bigger Gains near the Top of the Distribution 245 6.5 Only in India and Nepal Is Infant Mortality of Girls Higher Than That of Boys 254 6.6 Fertility Is Declining, and Many Indian States Resemble More Developed Countries 255 6.7 Reasons for Women's Last Children Not Being Born at a Health Care Facility 256 6.8 Aspirations of Women Doing Only Domestic Work 259 6.9 Indian Women Who Report Spousal Violence Also Report More Barriers to Health Care 259 Maps 1.1 Location Matters: Rural and Urban Poverty Rates Vary Significantly within States 55 5.1 Spatial Distributions of Poverty and Inequality at the Local Level Are Not Identical 197 Tables 1 Trends in Key Indicators of Health and Morbidity 19 2 Attendance Increased Substantially in the Past Decade, Particularly in Elementary Schools 20 1.1 Calorie Poverty Rises Even as Consumption Poverty Falls 50 CONTENTS IX 1.2 Growth Matters; Whether It Has Become More or Less Potent at Reducing Poverty Postreform Is Unclear 61 1.3 Urban Growth Has Become the More Important Driver of Poverty Reduction Compared with Rural Growth 65 1.4 Selected Characteristics of the Rural Poor, Middle Class, and Rich 73 1.5 Selected Characteristics of the Urban Poor, Middle Class, and Rich 74 2.1 Poverty in Urban India Tracks Rural Poverty 83 2.2 At the State Level, There Is Some Stagnation and Some Dramatic Declines in Urban Poverty 84 2.3 Poverty in Small Towns Approximates or Exceeds Rural Poverty 87 2.4 Large Cities Account for a Small Share of the Urban Population 88 2.5 India's Urban Poor Are Overwhelmingly Found in Small and Medium-Size Towns 89 2.6 A Relatively Low Poverty Rate in Large Cities Is Also Reflected in State-Level Estimates 90 2.7 At the State Level, the Urban Poor Also Reside Overwhelmingly in Small Towns 92 2.8 Access to Electricity Is Generally Higher in Large Towns 94 2.9 Urban Infant and Child Mortality Is Highest among the Poor in Large Cities 95 2.10 Small-Area Estimates Reveal High Poverty in Small Towns in Three States 97 2.11 Differential Access to Services in Andhra Pradesh and West Bengal Mirrors Per Capita Spending across City Size Classes 99 2.12 Poverty Is Lower in Large Towns and Cities, Even After Controlling for Infrastructure Access and Distance to Metropolitan Areas 102 2.13 Proximity to Kolkata Is a Key Correlate of Urban Poverty in West Bengal, but Only within a Relatively Narrow "Catchment Area" around That City 104 2.14 Rural Nonfarm Employment Is Higher in Districts with More Small Towns and with Lower Urban Poverty 107 2.15 The Elasticity between Rural and Urban Poverty Rates Is Greater for Small Towns 108 X CONTENTS 3.1 Annual Average Growth in Real Wage 131 3.2 Annual Growth in Nonfarm Wage Bill 133 3.3 Trends in Rural Poverty, GDP, and Agricultural Wages 143 3.4 Correlates of Rural Poverty and Agricultural Wages 144 4.1 Slow Pace of Improvement in Undernutrition 160 4.2 Health Status Has Improved Overall, but There Have Been Reversals in Some Key Indicators 165 4.3 Attendance Increased Substantially in the Past Decade, Particularly in Elementary Schools 170 5.1 Recent Trends in Inequality 190 5.2 Inequality Decomposition across States 204 5.3 Decomposition of Rural Inequality by Region 205 5.4 Decomposition of Urban Inequality by Region 207 5.5 Decomposition of Rural Inequality by Social Group 208 5.6 Decomposition of Urban Inequality by Social Group 209 5.7 Decomposition of Rural Inequality by Education Class 212 5.8 Decomposition of Urban Inequality by Education Class 213 5.9 Decomposition of Rural Inequality by Occupational Group 215 5.10 Decomposition of Urban Inequality by Occupational Group 216 6.1 Nearly One-Third of Scheduled Castes Are Employed as Casual Laborers 231 6.2 In Terms of Poverty, Scheduled Tribes Are 20 Years Behind the General Population 242 6.3 Depth and Severity of Poverty Have Declined More Slowly among Scheduled Tribes Than Other Social Groups 243 6.4 Trends in Poverty Incidence in States with High Proportion of Adivasis 244 6.5 Mortality of Scheduled Tribe Infants Is on Par with Others but by the Time Infants Are Five Years Old, There Is a Huge Gap 246 6.6 Scheduled Tribe Children Face Higher Odds of Dying after Age One Than Non-Scheduled Tribe Children 248 Acknowledgments This book was prepared by a team led by Peter Lanjouw and Rinku Murgai (principal coauthors), under the overall guidance of Ernesto May, N. Roberto Zagha, and Miria Pigato. Core team members include Tara Vishwanath and Nobuo Yoshida, on poverty map esti- mation and analysis; Ericka Rascon, on poverty map analysis and inequality; Jishnu Das and Puja Vasudeva Dutta, on nonincome dimensions of poverty; and Maitreyi Das and Soumya Kapoor, on social exclusion. Pinaki Joddar provided research assistance. Admin- istrative support was provided by Shiny Jaison, Rita Soni, and Jyoti Sriram. This report has been prepared alongside a parallel World Bank report on poverty and social exclusion in India led by Maitreyi Das. The two reports have a few common team members and often drew on common material. We gratefully acknowledge financial support from the United Kingdom Department for International Development World Bank trust fund to carry out background research. Background papers prepared for the book include works by the following: Gaurav Datt and Martin Ravallion, on the relationship between poverty reduc- tion and growth; Angus Deaton (Professor, Princeton University), on price trends in India and their implications for measuring poverty; Himanshu (Assistant Professor, Jawaharlal Nehru University), on nonfarm employment; Amaresh Dubey (Professor, Jawaharlal Nehru University), on estimates of poverty and inequality from the 2004-05 India Human Development Survey; Benjamin Crost (University of California, Berkeley), Alain de Janvry (Professor, University of California, Berkeley), and Elisabeth Sadoulet (Professor, University of California, Berkeley) on income disparities in India; Stefan Dercon (Professor, University of Oxford), and Sonya Krutikova (University of Oxford), on welfare dynamics, using International Crops Research Institute for the Semi-Arid Tropics data; Devesh Kapur (Director, Center for the Advanced Study of India, University of Pennsylvania) and Jeffrey Witsoe (Visiting Scholar, Center for the Advanced Study of India, University of Pennsylvania), on a case study of migration from rural Bihar; and Maitreyi Das, Gillett Hall (Visiting Professor, XI XII ACKNOWLEDGMENTS Georgetown University), Soumya Kapoor, and Denis Nikitin (independent consultant), on tribal issues. We thank peer reviewers Abhijit Sen (Member, Planning Com- mission, and Professor, Jawaharlal Nehru University), Nicholas Stern (IG Patel Chair and Director, LSE Asia Research Centre), and Salman Zaidi (World Bank), and participants at Ministry of Finance, Planning Commission, and World Bank seminars for their com- ments. The team received valuable guidance from Stephen Howes (Professor, Australian National University). The report has been discussed with the Government of India but does not necessarily bear their approval for all its contents, espe- cially where the Bank has stated its judgment, opinion, or policy recommendations. Abbreviations ASER Annual State of Education Report CBD community-based development CDD community-driven development DHS Demographic and Health Surveys DISE District Information System for Education GDP gross domestic product GE General Entropy class GIC growth incidence curves HCR head-count rate MUS Muslims NAS National Accounts Statistics NCAER National Council of Applied Economic Research NCERT National Council on Educational Research and Training NCEUS National Commission on Enterprises in the Unorganized Sector NFHS National Family Health Surveys NNMB National Nutrition Monitoring Bureau NSDP net state domestic product NSS National Sample Surveys OBC other backward caste XIII XIV ABBREVIATIONS PESA Panchayat (Extension to Scheduled Areas) Act ppp purchasing power parity sc scheduled castes SPG squared poverty gap index ST scheduled tribes Overview India's Poverty Challenge India is a country of continental proportions, and poverty is a multidimensional phenomenon. Not surprisingly, the debate over poverty in India-its extent, trends, causes, and cure-is complex and controversial. Fortunately, India also has a much higher quality and more sub- stantial evidence base than most other countries for understanding poverty. Questions of poverty in India have engaged a large com- munity of researchers over the years. But in recent decades, because difficult measurement issues have arisen, a disproportionate amount of attention has been devoted to assessments of the extent of poverty and the rate of poverty decline. Much less is known about how the rapidly changing economic landscape has altered the underlying profile of poverty-and how that affects the consequent search for its causes and cure. This report seeks to fill that gap. We work with two objectives. The first is to produce a diagnosis of the broad nature of the poverty problem and its trends in India, relying primarily on household survey data. We focus on both consumption poverty and human development outcomes. 1 Second, we attempt a more detailed treatment of a subset of issues that have been identified as particularly important for achieving inclusive growth, a central objective of the Government's Eleventh Five-Year Plan. Sustained and rapid growth is a central component of any poverty reduction strategy. But the fact that the responsiveness of poverty reduction to economic growth has been uneven over time and across regions leads us to analyze potential pathways to make growth more inclusive. It is clearly not feasible to aim for an exhaus- tive treatment of all the myriad pathways that are likely to be of 1 2 PERSPECTIVES ON POVERTY IN INDIA relevance in India. Instead, the focus in this second objective is on three key themes revealed in the diagnostic section to be important. First, since the early 1990s, urban growth has emerged as a much more important driver of poverty reduction than in the past. Our analysis of urban poverty examines the specific nature and dimen- sions of urban poverty, focusing in particular on the role of small and medium-size conurbations in India, both as the urban subsector in which urban poverty is overwhelmingly concentrated and as a sub- sector that could potentially stimulate rural-based poverty reduction. Second, in rural areas we focus on the nature of transformation out of agriculture to the nonfarm economy. Stagnation in agriculture has been accompanied by dynamism in the nonfarm sector, but debate is vigorous about whether the growth seen has been a symptom of agrar- ian distress or a source of poverty reduction. Finally, alongside the accelerating economic growth and the highly visible transformation that is occurring in India's major cities, inequality is on the rise, raising concern that economic growth in India has bypassed significant seg- ments of the population. The third theme, social exclusion, asks whether despite the dramatic growth, historically grounded inequal- ities along lines of caste, tribe, and gender have persisted. It is not possible to tackle every poverty-related issue in a single report, and this report does not attempt to do so. It does not focus on the international (for example, the impact of globalization on poverty), class (the divide between landlords and tenants, for exam- ple), or sectoral dimensions (export industry and different manufac- turing sectors, for example). The choice of focus must be made, and in this report, we select themes of clear importance for which a combination of data availability and analytical tractability offers some prospect of new insights. The government has launched many initiatives that have a bear- ing on poverty, for example, in areas of rural infrastructure (Bharat Nirman), employment (National Rural Employment Guarantee Act), education (Sarva Shiksha Abhiyan), rural health (National Rural Health Mission), and urban infrastructure (National Urban Renewal Mission). Indeed, the task of poverty reduction is one on which almost every policy instrument of government has a bearing. The report does not focus on how specific government programs are working or how the current poverty situation reflects specific policy measures taken in the past. Its objective is to develop the evidence base for policy making in relation to poverty reduction. While the focus of the report is resolutely on descriptive analysis rather than on the articulation of policy recommendations, certain general policy directions and questions do emerge. They are summarized at the end of this overview. OVERVIEW 3 The poverty reduction challenge facing India needs to be defined broadly. Our analysis argues against a narrow definition of the pov- erty reduction challenge confronting India. As discussed in chapter 1 and summarized in figure 1 below, little difference is evident in con- sumption levels between the poor and a large section of the middle class, especially in rural areas. The median rural person in India lives Figure 1 India's Middle-Class Lives Barely or Not Far above India's Poverty Line, and Below International Poverty Lines, Especially in Rural Areas a. Rural $2 per day lOth 20th 30th 40th 50th 60th 70th 80th 90th decile threshold lOth 20th 30th 40th 50th 60th 70th 80th 90th decile threshold Source: Authors' estimates from NSS 2004-05 Schedule 1.0. Note: Consumption estimates are in all-India rural or urban rupees and are cor- rected for cost-of-living differences between states using the official poverty lines. International poverty lines were converted to rupees using 2005 purchasing power parity rates of 11.4 Rs/$ in rural areas and 17.24 Rs/$ in urban areas. 4 PERSPECTIVES ON POVERTY IN INDIA on Rs 15 per day (with a purchasing power parity, or PPP, of $1.30), spending only Rs 3 each day more than a person on the official Indian rural poverty line. India's poverty line is very low by inter- national standards, and 80 percent of the rural population lives below the median developing-country poverty line of Rs 22 (PPP $2) a day. 2 Qualitative surveys show that most Indians think of themselves as poor. Moreover, when the definition of poverty is expanded to include other dimensions of well-being, such as access to education, health care, and basic infrastructure, then poverty clearly continues to afflict more than half of India's population. Inequality is on the rise, raising concerns that India's history of social stratification may be excluding groups from the development process. For all these reasons, although a large portion of the report is devoted to analysis of households falling below India's official poverty line, the report also examines how outcomes are changing for the officially nonpoor. The report is structured around three themes: consumption pov- erty and growth, human development, and inequality and social exclusion. Chapters 1 to 3 of the report analyze trends in consump- tion poverty in India and the links between it and the pattern of economic growth. Chapter 1 focuses on trends and patterns of pov- erty. Chapters 2 and 3 focus on two new drivers of poverty reduction in India: urban growth and rural nonfarm employment. Chapter 4 turns to the nonincome dimensions of poverty. It analyzes trends in relation to education and health, including nutrition. Chapter 5 examines and attempts to understand India's rising inequality. The final chapter examines disadvantaged groups, with a focus on women, scheduled castes, and scheduled tribes. This overview fol- lows the same approach. Poverty on the Decline India has continued to record steady progress in reducing con- sumption poverty. Focusing on the experience of the last 20 years and using the official poverty lines, in 2004-05, 28 percent of peo- ple in rural areas and 26 percent of people in urban areas lived below the poverty line, down from 47 percent and 42 percent, respectively, in 1983 (figure 2). With population growth, however, it has proved difficult to reduce the number of poor at a comparably rapid pace. So despite India's success in bringing down its poverty rate, more than 300 million people remained in poverty in 2004-05. OVERVIEW 5 Figure 2 Evolution of Poverty since the Early 1980s Population below poverty line 50 45.6 46.5 40 15 30 '-' u ..., '-' c. 20 10 0 national rural urban 1•1983 II 1993-94 • 2004-osl Source: Authors' estimates using unit-record NSS Schedule 1.0 data. Note: Data based on uniform recall period consumption aggregates and official Planning Commission poverty lines. Improvements in the last two decades represent a continuation of a long-term secular decline of both urban and rural poverty under way in India since the 1970s (figure 3 ). At this pace, accelerated progress against poverty since economic reforms began in earnest in the early 1990s is suggested, but it is too early to say that it is a (statistically) robust new trend. Definitive views on the pace of poverty decline are hostage to data uncertainties. India's official poverty lines have been criticized on multiple counts and are in urgent need of an overhaul. The recent report of an expert group constituted by the Planning Commission (Gol 2009), which addresses the price index problems that currently plague comparability over time as well as comparisons between urban and rural areas, is a welcome step in that direction. Revision of official poverty lines and price indexes after due deliberation of the expert group's recommendations will help put poverty measure- ment on a sounder footing. The growing divergence shown in figure 4, between mean consumption per person from the National Sample Survey (NSS) and the private consumption component of the national accounts statistics (NAS), also per person, further confounds efforts to be definitive. In levels, aggregate household consumption implied by the NSS is barely half that of the household component of the NAS. Such a gap is unusually large by international standards. It is 6 PERSPECTIVES ON POVERTY IN INDIA Figure 3 Evolution of Poverty, 1951-2006 70 ~ !?___ 60 < '' / / '' " '' / '' 0 a '" 200 '' ' / / / ' 2,050 ""§ " '.... u 2,000 " a, 100 1,950 0 +---.---,---.--.--.----,----,-------,------,--+ 1,900 b. Urban 600 2,300 2,250 - 500 ~ 2,200 ~ 400 ,, :..a / \ 2,150 u \ ~ "' / 15. >< 300 ... ... ... ... ... ...,, / / \ \ \ 2,100 -~ " 0 ·a u '" '.... " 200 --- _...... _ 2,050 2,000 '" u " a, 100 1,950 0 +---.----,-------,----,-----,----,---,----,--,----+ 1,900 1--MPCE --MPCFE -----·MPCC I Source: Deaton and Dreze 2009, tables 1 and 2. Note: MPCE =monthly per capita (total) expenditure; MPCFE =monthly per capita food expenditure; MPCC = monthly per capita calorie consumption. 10 PERSPECTIVES ON POVERTY IN INDIA Figure 6 Poverty Rates in Indian States Span the Best in the Developing World to the Worst percent Tanzania L1bena Rwanda Ma!aw1 Zamb1a :-..i1gcr :"'.!Jgena Central Afm:an Rep. Chad Congo, Dem. Rep. Onssa-R Jharkhand-R Congo, Rrp. Omsa-U Burkma Faso J'.;epal ,'\JamJbta S1erra Leone Madhya l'r.Jde~h-U B1har-R c:hharmgarh-U Unarakhand-R Chhatt1~garh-R Uganda Mall Madhya Pr,1dcsh-R Uttarakhand-U Lesotho Benm Bihar-U Utur Pradesh-R Banglade.,h Rajasthan-U Karnataka-U Mahara~lura-U UttarPradc~h-U Lao PDR Maharashtra-R WestBengal-R AnJhra Pradcsh-U C1mhodta Jnd!d-R Togo GJmb1a Ind1a-U Senegal Botswana Ethmp1a i,llnil l"'adu-R A>>am-R Tanul Nadu-U ChanJ K,1rnataka-R Kerala-ll )h.ukhand-U South Alnca Gupr,H-R Ra]astlun-R Bhut,Jn BolJ\'Ja Chma-R COte d'lv01re H.uy.Hla-U West Bcng,li-U Ph1l1pp1ne., Mongoha 11aq.ma-R Kt'nya Kerala-R Vietnam C,tiJMat-lJ JndonesJa-R Colombia Andhra l'rade~h-R Nicaragua Pab~tan Hm1achal Prade~h-R lndone~ia-U Punph-R c;eorgu Guatemala El Sahador Pun]ab-U Panama 'mlanka Peru Himachal Pradesh-U A~sam-lJ Bran I Argentma-U Venezuela, RB Turkey C:hma-l! +----,----,-----,-----,------, 20 40 60 80 100 % populatiOn below Indun pmerty hne Source: Authors' estimates based on data from http://iresearch.worldbank .org/Povca!Net/. Note: R = rural; U = urban. OVERVIEW 11 similar to those found in countries such as Turkey or the richer Latin American countries. There is no clear pattern over time in the spread of rural poverty across India's states, but in urban areas the range of poverty rates across states has been increasing. It is still the case that because poorer states in general are also the most populous, a large proportion of the poor are concentrated in the poorest states. Accelerating progress in the poorest states is important as they are also the states where fertility rates are particularly high. City Size Matters: Urban Growth and Poverty Urban growth not only reduces urban poverty, which is assuming increased importance in relative terms in India, but since 1991 it is also helping to bring down rural poverty. Urban poverty in India is becoming more important relative to rural poverty for two reasons. First, India's urban population is on the increase, especially since 1990. In the 40 years after 1950 the urban sector's share of India's p.opulation only rose from 17 percent to 26 percent, but in the 15 years after 1990 it is projected to have risen to 29 percent. Sec- ond, urban and rural poverty rates are converging, at least if official poverty lines are used (see figure 1). Even though the gap between urban and rural mean consumption levels is growing, urban inequal- ity has increased, with the result that urban poverty reduction has been slower than that in rural areas (figure 7). Urban growth obviously helps to reduce urban poverty directly, but since 1991 evidence has also appeared of a much stronger link from urban economic growth to rural (and therefore overall) poverty reduction (figure 8). That could be due in part to the more rapid rural- urban migration that urban growth now appears to be inducing- though migration levels in India remain low compared to those in other countries. Evidence is also seen that other horizontal links have strengthened: urban areas are a demand hub for rural produc- ers, a place of employment for rural workers, and, increasingly, a source of domestic remittances. Indeed, the analysis of the nonfarm sector, discussed below, confirms that urban areas act as a stimulus for rural nonfarm growth. Urban poverty reduction and urban growth have been most vis- ible in large cities. The share of metropolises (cities with 1 million people or more) in India's urban population increased from just 19 percent in 1983 to 27 percent in 2004-05. During that period, poverty levels have halved in these large cities, from 29 percent in 1983 to 15 percent in 2004-05. However, more than 70 percent of India's urban population lives in towns with a population of less than 1 million, and roughly 12 PERSPECTIVES ON POVERTY IN INDIA Figure 7 Even Though Urban and Rural Consumption Levels Are Diverging, Rising Urban Inequality Explains Why Urban and Rural Poverty Levels Are Converging a. Ratio of urban mean to rural mean 1.45 1.40 1.35 1.30 00 0 0 0 .s 1.25 ooo .... "" 1.20 1.15 1.10 1.05 1950 1960 1970 1980 1990 2000 2010 year b. Gini index of inequality 45 40 . 0 0 35 c:: "' v .... "' "" 30 .. 25 20+-----.----,,----,-----,----,-----, 1950 1960 1970 1980 1990 2000 2010 year J-- rural - - urban J Source: Datt and Ravallion 2009. OVERVIEW 13 Figure 8 Growing Poverty Impacts of Urban Economic Growth a. Pre-1991 x 0.1 0 "' • 0..., 0: 8 0.05 • -B -~ -o ;f 0.00 .9 0: ::l 8-0.05 ..0 "' ~ . ~'~> !$' <:<- ,_,'~> ;.-..'~> -..'~> 0. ~ 4'~> ~- ·,.,'~> r5' y.,.'~> ·,'~> ~ ~'~> '~>~ Q.'~> :'\'~> . ~'~> -;S.§• 0o" . ~'~> ~~V. "-~""~,«-""~'~> "-~$''~> o$''~>~ ~'>"'<.; o.o~"'"'~(y'~>~ ?6'~>0."- .,.,_(5-.o.o ~:"' l"'~>~G""'eJ. ..,f '>;..:;?:._(p'~> ~~~ "-"'"" .:::,~"' +"'~ if 8~ ~""'~> '~>~ "";'. "'$'"' «; c.,<.' ~'b- ~0. <:<-~ . ~~ ~s ~ ·,_,'1> 0.'¢1 ..\; 0.'b- «,."' .,._'~> ~'$ . 'I><> . .:p.'b' ,$Y~ ~ ~'b- «,.~ ~0 «;>o"' Sources: Consumption Gini from NSS 61st round; income Gini from 2004-05 NCAER-University of Maryland India Human Development Survey (Dubey 2008). Note: Consumption Gini = 0.325; income Gini = 0.535. OVERVIEW 25 "community-driven development" approaches-will not necessarily reach the poor and might instead be at risk of elite capture. Consumption inequality has fallen over the longer term in India but is now on the increase. Turning from levels to trends, inequality is on the rise in India. This is a recent phenomenon. As figure 7 illustrated, the last five decades show a long-term trend in rural areas of declining inequality; a decline in inequality in urban areas until the 1980s, and since then a rise; and a long-term upward trend in the urban-rural gap. What this would mean for total inequality depends on how adjustments are made for urban-rural cost of living differences, but given that the great bulk of the pop- ulation still lives in rural areas, a long-term downward trend would be expected. Focusing in greater detail on the more recent past, however, tells a different story. Rural growth switched from being pro-poor (largely benefiting the poorer) between 1983 and 1993-94, to being largely distribution neutral between 1993-94 and 2004-05. In urban areas, over the same period, growth went from being distribution neutral to being pro-rich. And the gap between rural and urban areas con- tinued to widen. Again, aggregate comparisons are difficult, but this set of findings would suggest an upward trend in national inequality. When one uses the official urban and rural poverty lines to correct for cost-of-living differences over time and between urban and rural areas, for most inequality indicators, no increase or a decrease in national inequality is apparent between 1983 and 1993-94, and a small increa~e is seen between 1993-94 and 2004-05. Figure 15 illustrates the Gini coefficients. These results understate the increase in inequality, likely because the household consumption suroeys are missing increases in top-end incomes. Increases in wealth holdings are also driving perceptions of increased inequality. Although the survey data we examine show an increase in inequality, it is not a dramatic increase. We have already noted, however, that the survey data likely underreport con- sumption at the top end. It is certainly popularly perceived that inequality has increased sharply, very likely driven by the observation that rich Indians did extraordinarily well during the boom of the 1990s. According to one study, in 1999-2000, the gap in per capita income between the 99th and 99.5th percentile was almost four times as large as the gap between the median person and the 95th percentile. Incomes of the super-rich at the 99.99th percentile grew by over 285 percent between 1987-88 and 1999-2000 (Banerjee and Piketty 2003). Wealth inequalities are also on the rise. Between 1996 and 2008, wealth holdings of Indian billionaires are estimated to have risen from 0.8 percent of GDP to 23 percent (Walton 2010). 26 PERSPECTIVES ON POVERTY IN INDIA Figure 15 Recent Trends Show Inequality on the Rise 40 .F "@ 30 :::> c:r < "' . ~ ~ -::=: 15. 0.10 -a~ " "' 0.05 ::l ;;;, ~.s Source: Walton 2008. Note: Based on data from 23 Indian states. Figure 17 Increased Returns to Education Are Driving Rising Inequality a. Rural b. Urban 8 24 11 11 8 " 8 " 0 20 "' ~6 " "' :;o " ">--"'" "-->--"'" 16 ~ ~ "' " "' r:r..O "' "' .s -~ 4 :.::> "' "' s "' " "' r:r..O ~ ;;: 12 u 1:l 8 0 " " 4-; 0 ~ 2 ~ ~~ ~~ :.0 :.0 4 0 0 below primary graduate below primary graduate 1• 1983 IJI 2004-051 Source: Authors' estimates from respective NSS rounds. Note: Percentage of inequality due to difference between given education category compared with the rest of the population. This evidence fits well with the story of the growing nonfarm sector told earlier, as we know that the less the countryside is dominated by agriculture, the more important education is. Even completing primary education increases the chances of escaping the farm. That education is a source of rising inequality appears 28 PERSPECTIVES ON POVERTY IN INDIA paradoxical inasmuch as access to education is becoming much more equitable over time. However, inequalities in learning are high in India-among the highest in the world, and rewards to skills are becoming more unequal (Dutta 2006; Kijima 2006). Some types of inequality, but not all, are harmful for growth and economic development. The link between inequality and poverty is far from straightforward. Everything else being equal, a rise in inequality will dampen the poverty-reducing impact of an increase in mean incomes. But everything else is not equal, and some growth accelerations might not be possible without an increase in inequality. The analysis suggests that the recent experience of India might fall into such a category, with increasing returns to education a neces- sary requirement for its recent rapid growth. Even so, rising inequality can be of concern for other reasons. Some inequalities may be more structural and exclude groups from the development process. Social Exclusion: Who Is Being Left Behind? Although increases in inequality due to increasing returns to edu- cation might be growth enhancing and ultimately poverty reduc- ing, other inequalities in India are structural and are more likely to act as a brake on, rather than enhance, poverty reduction. The final chapter of the report examines inequalities across social groups, with a particular focus on scheduled castes and tribes and on gender. At the all-India level, differences between social groups explain only a small share of total consumption inequality in India; but in some states, group differences are important and growing. A decom- position inequality analysis shows that dividing households into those belonging to scheduled castes (SC), scheduled tribes (ST), Muslims, and others explains only about 4 percent of India's con- sumption inequality. At the state level the picture is less reassuring. In some states, notably rural Bihar, scheduled caste households appear, as a group, to be falling behind the rest of the population. More frequently the analysis shows that it is the more advantaged segments that are pulling ahead from the traditionally disadvan- taged groups (scheduled castes, scheduled tribes, and Muslims taken together). It is widely noted in the sociological and anthropological litera- ture that social groups are highly heterogeneous. Our analysis of within-group inequality confirms that and shows that within-group inequalities are more important than those across groups. In other OVERVIEW 29 words, the gaps between elites and the poorest within the excluded groups are greater than the average gaps between groups. That is not to deny that social group membership continues to be an important welfare determinant. Progress indicators are particu- larly worrying for scheduled tribes. Welfare indicators for SCs and STs are improving, but the gap between them and the general population is large and persistent. Poverty rates for SCs and STs and for the general population have fallen by about 20 percentage points over the last two decades (figure 18). STs today (2004-05) experience levels of poverty seen in the general population 20 years earlier (1983), whereas SCs lag 10 years behind the general population. Education indicators tell a similar story, with improvements but also large and persistent differences (figure 19). Scheduled tribe and scheduled caste women, in particular, are falling behind, with slow- er-paced improvements particularly in postprimary ~ducation. Higher child mortality among STs is the starkest marker of depri- vation. Mortality of rural ST children starts off on par with that of other groups but rapidly worsens by the time the children are five years old. A disproportionately high number of child deaths are con- centrated among STs and in those states and districts with a high proportion of STs. Figure 18 In Terms of Poverty, Scheduled Tribes Are 20 Years Behind the General Population, and Scheduled Castes Are 10 Years Behind 80 v lJ >. E > 6o 0 0. a: 0 v ..D 40 c: .9 "" [20 0 0. 2/2. 0 scheduled tribes scheduled castes all 1•1983 D 1993-94 • 2004-051 Source: Authors' calculations based on NSS data. 30 PERSPECTIVES ON POVERTY IN INDIA Figure 19 Changes in Postprimary Education by Social Groups and Gender, 1983-2005 60 -·-· -------· ---·-· -·- 0+--------,-------,--------,-------,-------, 1983 1987-88 1993-94 1999-2000 2004-05 year - - ST-men - - ST-women ----- SC-men ·········· SC-women -·-·-·-non-ST/SC-men ----- non-ST/SC-women Source: Authors' calculations based on working-age population data from NSS Schedule 10, various rounds. Occupational segregation and wage differentials between Dalits and other groups are still evident. Nearly 30 percent of Dalits are engaged in low-skill casual jobs, compared to 8 percent in the gen- eral category (non-SC/ST/OBC [other backward caste]) individuals. They are also less likely than other groups to have their own business enterprises, particularly in urban areas. Concentration of Dalits in casual work or in lower-paid occupations relative to other groups is in part related to differences in education levels, but the differences persist even after controlling for education and other characteristics. Difference in access to occupations-or "glass walls"-is an important determinant of the wage gap. Various studies show that small-scale Dalit entrepreneurs, especially in rural areas, are pre- vented from moving out of caste-based occupations into self- employed ventures. Even in the urban private formal sector, recent research establishes, they are less likely to secure a job despite being as qualified as applicants of other castes (Deshpande and Newman 2007). Some positive signs of dynamism are visible within the caste hierarchy. With the expansion of the nonfarm sector, discussed ear- lier, Dalits are moving out of agricultural labor to relatively higher paying, nonfarm casual work and into trade and self-employment. At the margin, an increasing number of new workers entering the nonfarm sector are from a scheduled caste or tribe background. OVERVIEW 31 With casual nonfarm employment paying significantly better than agriculture, the shift from agricultural labor to casual nonfarm labor is a sign of mobility, albeit limited. Other studies also present evi- dence of greater Dalit entrepreneurship and social change. Expand- ing economic opportunities, improvements in education, and greater political voice for scheduled castes have been drivers of change. One of the most worrying trends is the increasing exclusion of scheduled tribes from the growth process. Scheduled tribes have his- torically lived in remote areas, and that has made the delivery of services to them particularly challenging. In addition, over the years they have been increasingly alienated from the traditional sources of their livelihood-land and forests (Gol Planning Commission 2008). Combined with their limited voice in decision making, that has caused them to lag behind other groups on a range of indicators. Scheduled tribes have also suffered more mass displacement as a result of infrastructure projects than any other group: they make up 8 percent of India's population but 40 percent of the 21 million people displaced between 1951 and 1990 (Burra 2008). Though consumption inequalities are not yet increasing, there are worrying indicators that India's educational expansion is leaving scheduled tribes behind. They show the least improvement in intergenerational mobility in education, as well as the worst indicators of child nutri- tion and mortality. Scheduled tribes are at risk of being locked out of India's growth and prosperity. Although considerable progress has been achieved, female disad- vantage in India continues, and women die unnecessarily both in infancy and in motherhood, with the poorest outcomes among women of scheduled castes and tribes. Female disadvantage is most starkly evident in the lower survival chances of baby girls compared to boys. India and, to a lesser extent, Nepal are the only two countries where the survival of infant girls is known to be lower than that of boys. At the same time, notable areas of progress can be seen. Fertility decline, for instance, frees up women from the cycle of childbearing and child rearing and allows them to enter into other arenas. In India, fertility rates in several states are now below replacement levels and resemble levels in developed countries; in other states the figures resemble those in much poorer countries (figure 20). Use of contracep- tion is much higher than even a decade ago, and maternal mortality- although at stubbornly high levels across the South Asia region (except Sri Lanka)-is declining more sharply in India than in other countries. Progress has, however, been highly uneven, and Dalit and Adivasi women's outcomes are ·much worse than those of other women. High levels of gender inequality persist in the labor market despite improvements in other areas. Female participation in the Figure 20 Fertility Is Declining, and Many Indian States Resemble More Developed Countries births per women 4 0 ""' 0 N ~ E " e 2 '-" ] () .... ~'o -s., '-' ·- ,4. ~..;,"~>-_::-_.:.., ;.._.;,"~>- c.C-- ~4.. ·,.:::.. ::-.,"-'1:!- ~ <_. fb. .... v" v'c ;_.;,"17 o,tt- ,o.o ·o:')O'-'<:::- f$:- o"'1- ~ ~ ~0. cv-::-.,"~> ·"174.. .c;.b ::--.1>- v'-' ~- ~. <$' 0-0 ~"'::+."/;> <."~> '$$." (,."~>- ~. ~"~> ~' <$' ~ ~ ~'&..,.'1>- :V-'1:!- ~' ~ ~ ;;<>"'t-v ~C :VC 'A'b- ~ trt'- ~0':~~0~;v"~>:«~~~v"%~"~>-''~"'1>-(,<-~~'1>-~«'1>-~~·>v~v"G~t~~"'<..t~~~o:~~~"~0~,'1:!-'c:"1~~:~~0<..~,C>\-'-'~<.~~"~>-b~v"~*~~~S"::fb.":'1>-~"~<..~~'-'"'b~':~~"~~\~"~'"~:~fb.<."\1>-~~~o~1r~~"~>~"~~~~~\''b-O'-'~~ ~~ .......,~~ '"' ~ c' .. f~.s."' -&~~.:s:: o*"' ~ A'IJ-~~ ~ -~c;+f);).~'> ~'\'-'"" o~ _,-&'b-....... .:.;"17 ~1) ~y~~-~~1)~'1>~'2)-~~c..'?>-, .:.,'1>- c..'-' 'y~ ~ .....c~ ~ .. . 0' J ..:;;;<:::- ~ ~ 1)-o;:; "-' (._}' 25'~ ~-s .::yo C}; -.0"' ~ . <$'~ ""'v ~ ,~~ ~· 'v"~~'lf 'l- cross-country and Indian states I• other countries Ql Indian states I Sources: National Family Health Survey for India and Indian states; EUROSTAT 2008 for European countries; StatCan for Canada; AUSTATS for Australia; and Demographic Health Surveys for selected countries. Note: Data from 2005, or closest year available. w N OVERVIEW 33 labor force remains low in India, with only 40 percent of women employed in full-time work. That is so despite the fact that a very large share of women say that they aspire to work outside their homes. Economic and social outcomes for women are underpinned by low levels of security for them both within and outside their homes. Several policies and programs are under way to promote women's empowerment and better gender outcomes. Both vision and implementation count. Concluding Remarks Poverty has been falling in India for the last 30 years and continues to decline steadily, if not rapidly. In contrast, India's record on improving basic health and education indicators is mixed. Some out- comes have improved with rising income. In other dimensions, most notably nutrition, problems remain stubborn and are worse for the poor, but not only the poor. India's structural transformation is affecting poverty. Underlying the long-term reduction of poverty is a gradual transformation of India's economic geography. This report has drawn on survey evi- dence to point to the emergence of new drivers of poverty reduction. India is slowly becoming urbanized, and urban growth has outpaced rural. Since the 1990s, a much stronger link from urban growth to a reduction of rural poverty is evident. In urban areas, it is small and medium-size towns, rather than large cities, that appear to demon- strate the strongest urban-rural growth linkages. Rural areas are diversifying away from agriculture toward the nonfarm sector. Agriculture remains an important determinant of rural poverty, but the link between the two is weaker than it used to be. That is why poverty has continued to fall apace, even as agricul- tural growth has slowed. Expansion of the nonfarm sector has been poverty reducing both directly, because of the premium that even low-wage nonfarm jobs offer over agricultural wages, and indirectly, by driving up agricultural wages. Inequality is on the increase. But at least some of the factors driv- ing inequality up, such as increasing returns to education, seem to be associated with India's accelerating growth rather than with an intensification of structural inequality. Some signs are also apparent of dynamism within caste hierarchies. But structural inequalities also remain present and visible. Caste is still a potent indicator of social status. Female disadvantage continues despite high rates of growth, with deaths of females both in infancy and in motherhood and with poorer outcomes for women from scheduled castes and 34 PERSPECTIVES ON POVERTY IN INDIA tribes. Worrying indicators are appearing that India's educational expansion is leaving scheduled tribes behind, and that group also displays the worst indicators of child nutrition and mortality. This diagnosis of patterns and trends of poverty and inequality in India suggests some policy directions. A multisectoral response to India's poverty seems indicated. Given the results that we report, continued debate about the appropriate sectoral focus for poverty reduction efforts is warranted. Agricul- ture is still the employer of too many of India's poor (especially the female and the elderly poor) to be ignored, but nonfarm rural employ- ment and urban growth deserve greater attention. The rural nonfarm sector, as a sustainable source of poverty reduction, will need close scrutiny-the quality of nonfarm employment has been falling in a trend toward growing "casualization" of the sector. Within the urban sector, large cities may well continue to drive India's growth. But given that small and medium-size towns are currently home to 80 percent of India's urban poor, and given the strong links between such towns and rural areas, it will be necessary to ensure that no barriers exist to small-town growth and that no policy biases prevent small towns from realizing their potential. One place to look for such biases is in access to basic infrastructure services. Improving India's human development indicators will require systemic change. The report shows very mixed progress with respect to human development indicators. Disaggregating outcomes between the poor and others shows that outcomes are worse for the poor. But the burden of undernutrition, for example, is not confined to the poor. These challenges have led to a vast debate about what actions are needed to improve delivery of services. Although that debate is beyond the scope of the report, it is clear that reducing nonconsump- tion poverty in India is a task that will require systemic improve- ments, rather than simply better targeting of existing systems to the consumption poor. A redoubling of efforts to get scheduled tribe children into school is needed. Social status and gender continue to be important indica- tors of disadvantage. The report's analysis draws attention to the risk that scheduled tribes, in particular, might be locked out of the modern economy by their lagging participation in India's schooling expansion above the primary school level. Data inconsistencies need to be addressed. As stated at the out- set, India enjoys a rich pool of primary data from which analysts can draw. It is no surprise that data inconsistencies and contradictory trends appear. From our vantage point, a high premium should be placed on resolving inconsistencies around India's poverty line, understanding the growing divergence between the national accounts OVERVIEW 35 and household consumption survey data, and reconciling the diver- gent trends in India's two household health monitoring surveys. Notes 1. India's official poverty estimates are based on the "thick" rounds of the consumption expenditure surveys carried out (roughly) every five years by the National Sample Survey (NSS) Organization. The most recent thick round for which data are available is 2004-05. Trends in education atten- dance are also based on the NSS. Trends and patterns of health and nutrition outcomes are primarily based on the National Family Health Surveys. The most recent data available from that source are from 2005-06. 2. Rupees converted to international purchasing power parity (PPP) $ using 2005 PPP rates of Rs 11.4 to the dollar in rural areas and Rs 17.24 to the dollar in urban areas. 3. See Bhalla 2002 and the arguments summarized in Deaton and Kozel 2005 for differing views on whether the national accounts estimates of consumption are more or less reliable than NSS estimates. 4. See Deaton and Dreze 2009 for a comprehensive review. 5. However, problems related to public amenities were seen as worse, possibly as a result of increasing population pressure (Praxis 1999). Small city-specific studies also reveal that despite some evidence of limited income mobility, little or no improvement has occurred in living conditions such as shelter, basic amenities like water and sanitation, and the living environment (see, for example, Swaminathan 1995; Praxis 1999). 6. Some surprises appear as well. For example, states such as Madhya Pradesh, Chhattisgarh, and Bihar outperform the southern states with respect to learning achievement (Pratham 2009). 7. See Das, Pandey, and Zojanc 2006 for a summary. 8. Income estimates are from a fairly comprehensive measure of income obtained from the 2004-05 India Human Development Survey collected by the National Council of Applied Economic Research (NCAER) and Univer- sity of Maryland. References Banerjee, A., and T. Piketty. 2003. "Top Indian Incomes: 1956-2000." World Bank Economic Review 19 (1): 1-20. Bhalla, S. 2002. "Imagine There's No Country: Poverty, Inequality and Growth in the Era of Globalization." Institute for International Econom- ics, Washington, DC. 36 PERSPECTIVES ON POVERTY IN INDIA Burra, N. 2008. "The Political Economy of Tribals in India in the Context of Poverty and Social Exclusion." Paper prepared for the India Poverty and Social Exclusion Report, New Delhi. Das, ]., P. Pandey, and T. Zojanc. 2006. "Learning Levels and Gaps in Pakistan." Policy Research Working Paper 4067, World Bank, Washington, DC. Das,]., and T. Zajonc. 2009. "India Shining and Bharat Drowning: Com- paring Two Indian States to the Worldwide Distribution in Mathematics Achievement." Journal of Development Economics 92 (2): 175-87. Datt, G., and M. Ravallion. 2009. "Has Poverty in India Become Less Responsive to Economic Growth?" Background paper prepared for India Poverty Assessment Report, World Bank, Washington, DC. Deaton, A. 2006. "Global Patterns of Income and Health: Facts, Interpreta- tions and Policies." National Bureau of Economic Research Working Paper 12735, Cambridge, MA. Deaton, A., and J. Dreze. 2009. "Food and Nutrition in India: Facts and Interpretations." Economic and Political Weekly 44 (7): 42-65. Deaton, A., and V. Kozel. 2005. The Great Indian Poverty Debate. New Delhi: Macmillan. Deshpande, A., and K. Newman. 2007. "Where the Path Leads: The Role of Caste in Post-University Employment Expectations." Economic and Political Weekly 42 (41): 4133-40. - - - . 2008. Development Challenges in Extremist Affected Areas: Report of an Expert Group to Planning Commission. New Delhi: Planning Commission. http://planningcommission.nic.in/reports/publications/ rep_dce.pdf. Accessed April 2009. Dubey, A. 2008. "Consumption, Income and Inequality in India." Back- ground paper prepared for India Poverty Assessment Report, World Bank, Washington, DC. Dutta, P. V. 2006. "Returns to Education: New Evidence for India, 1983- 1999." Education Economics 14 (4): 431-51. Goi (Government of India, Planning Commission). 2008. Eleventh Five Year Plan 2007-12. New Delhi: Oxford University Press. - - . 2009. Report of the Expert Group to Review the Methodology for Estimation of Poverty. http://planningcommission.nic.in/reports/genrep/ rep _pov. pdf. Haddad, L., H. Alderman, S. Appleton, L. Song, andY. Yohannes. 2003. "Reducing Child Malnutrition: How Far Does Income Growth Take Us?" World Bank Economic Review 17 (1): 107-31. liPS (International Institute for Population Sciences) and ICF Macro. 2007. National Family Health Survey (NFHS-III), 2005-06. liPS, Mumbai. ]alan,]., and R. Murgai. 2008. "Intergenerational Mobility in Education in India." Manuscript, World Bank, New Delhi. OVERVIEW 37 Kijima, Y. 2006. "Why Did Wage Inequality Increase? Evidence from Urban India 1983-99." Journal of Development Economics 81 (1): 97-117. NCERT (National Council of Educational Research and Training, India). 2009. Learning Achievement of Children in Elementary Education: A Journey from Baseline to Midterm. New Delhi: NCERT. Pandey, P., S. Goyal, and V. Sundararaman. 2008. "Public Participation, Teacher Accountability, and School Outcomes." Policy Research Working Paper 4 777, World Bank, Washington, DC. Pratham. 2009. "ASER 2008-Annual Status of Education Report (Rural) 2008 (Provisional)." New Delhi: Pratham Resource Center. - - . 2010. "ASER 2009-Annual Status of Education Report (Rural) 2009. Pratham Resource Center, New Delhi. Praxis. 1999. "Consultations with the Poor: India 1999." Prepared as a background paper for the World Development Report 2000-01, World Bank, Washington, DC. Riboud, M., Y. Savchenko, and H. Tan. 2007. "The Knowledge Economy and Education and Training in South Asia: A Mapping Exercise of Avail- able Survey Data." Human Development Unit, South Asia Region, World Bank, Washington, DC. Srinivasan, R. 2007. "A Decade of Economic Growth in India and China: Its Impact on Well-Being." Presentation, World Bank, New Delhi, November. Sundaram, K. 2007. "Employment and Poverty in India, 2000-2005." Eco- nomic and Political Weekly, July 28. Swaminathan, M. 1995. "Aspects of Urban Poverty in Bombay." Environ- ment and Urbanization 7 (1): 133-44. Walton, M. 2008. Presentation to the Indian Planning Commission. - - - . 2010. "Inequality, Rents and the Long-Run Transformation of India." Unpublished manuscript, Kennedy School of Government, Harvard University, Cambridge, MA. Four easy ways to order Online: Fax: Phone: Mail: Customer outside the US: +1-703-661-1580or P.O. Box960 publications.worldbank.orglbooksellers Publicabons.worldbank.org +1-703-QGt-1501 1-800-645-7247 Herndon, VA 20172-0960, USA Subtotal *Geographic discounts apply- depending on ship-to country. See http://publications. worldbank. org/discounts Geographic discount* ** Within the US, charges on prepaid orders are $8 per order, plus $1 per item. Institutional customers using a purchase order will be charged actual shipping costs. Outside of the US, customers have the option to choose Shipping and Handling** between nontrackable airmail delivery (US$7 per order plus US$6 per item) and trackab/e couriered airmail delivery (US$16.50 per order plus US$8 per item). 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