ESTIMATION OF DISTRICT LEVEL POVERTY IN UTTARAKHAND Rajendra P. Mamgain M.H. Suryanarayana Submitted to Directorate of Economics and Statistics Department of Planning Government of Uttarakhand GIRI INSTITUTE OF DEVELOPMENT STUDIES (An Autonomous Institute Funded by ICSSR and Govt. of Uttar Pradesh) Sector - O, Aliganj Housing Scheme LUCKNOW - 226024, (U.P.) INDIA Phones: (0522) 2321860, 2325021 Telefax: (0522) 2373640 E-mails: [email protected]; [email protected] November 2017 PREFACE Measurement of poverty and its elimination has been a core strategy of the development planning process in India since the beginning of its plan process. However, measuring poverty and its eradication has been a daunting challenge. Despite significant progress in the methodology of the measurement of poverty in India, the poverty estimates suffer due to paucity of data at more disaggregated level for effective policy interventions. In recent periods, with the availability of large data sets from NSSO quinquennial rounds on consumption expenditure both for central and state samples, it is possible to make robust estimates of poverty at district level for most Indian states. Keeping this in view, we have attempted to estimate district-wise poverty and inequality in Uttarakhand on the request of Directorate of Economics and Statistics (DES), Government of Uttarakhand. The study brings out several interesting features of poverty and inequality in Uttarakhand, which may be useful in prioritising action plans and resource allocations to eradicate poverty and promote inclusive development. The study has observed remarkable economic progress and resultant reduction in poverty in Uttarakhand particularly after its formation on November 9, 2000. However, high economic growth stands accompanied with widening regional disparities over the years. This is also reflected in significant variations in average per capita consumption expenditure acrossthe districts of the state. The incidence of poverty in the state declined by almost three times from 32.7 per cent in 2004-05 to 11.3 per cent in 2011-12, which has been much faster than its neighbouring state Himachal Pradesh and parent state, Uttar Pradesh. Among social groups, the incidence of absolute poverty was the least among the Other Social Groups (OSGs), followed by the Other Backward Classes (OBCs) and highest for Scheduled Castes (SCs) in 2004-05. The percentage point reduction in poverty in Uttarakhand between 2004-05 and 2011-12 was the maximum among SCs (30.34) followed by OBCs (29.06), the Scheduled Tribes (STs) (20.52) and OSGs (18.88). There was a more or less uniform reduction (around 65 per cent) in incidence of poverty among all the social groups in rural Uttarakhand. Our estimates show significant variations in the incidence of poverty across districts in Uttarakhand ranging as high as 28.5 per cent in Pauri Garhwal and lowest 9.2 per cent in Dehradun. In most of the hill districts the incidence of poverty is above the state average. The incidence of rural poverty is generally the lowest in the richest quartile group of districts, namely Dehradun, Udham Singh Nagar and Nainital. The marginal distribution of incidence of rural poverty across districts is nearly symmetrical while those pertaining to extent of inequality and cost of living are highly negatively skewed ones. This would mean that at least half of the districts are densely located with respect to high extent of relative inequality and cost of living. Rural-urban disparity in mean monthly per capita expenditure (MPCE) is the lowest in Nainital (108.45) --- the richest in terms of rural mean MPCE but poorest fourth in terms urban mean MPCE. Such disparity is the highest in Haridwar (212.13), which is the third poorest rural district but second poorest urban district. The median disparity is highest in Uttarakashi (172.10), which falls in the rural upper middle and urban lower middle quartile group. These patterns show a failure of urban development to catch up with rural prosperity leading to a development process far removed from the Kuzents’ inverted-U postulate. Relative rural-urban spatial cost of living too throws up a picture different from the conventional perception. In a majority of the districts, the rural spatial cost of living exceeds the urban one. The study points out that since most of the economic opportunities are concentrated in plain areas of the state, hill areas are almost lagging on various indicators of economic progress. Work opportunities are marred with seasonality and low levels of productivity particularly in hill region of the state. The growth in non-farm employment opportunities has been largely concentrated in the plain districts of the state. Due to lack of economic opportunities and quality employment, the hill areas of the state have been experiencing accelerated pace of long term exodusto plain areas of the state and other parts of the country. It further warns that neglecting productive employment opportunities at the cost of redistributive measures would not prove beneficial in the long run as it has serious economic and political consequences particularly emanating from large scale job related exodus from hill districts of the state. The study states that creation of gainful employment opportunities with reasonable social safety measures are critical in eradication of poverty and reduction in vulnerabilities of population belonging to various regions and sub-groups of population in Uttarakhand. Thus, along with creation of employment opportunities, skill development of both men and women is crucial for various trades and occupations to improve their employability and productivity. The study could be possible due to generous financial support from Directorate of Economics and Statistics (DES), Government of Uttarakhand. We would like to specially thank DES for its valuable support. We are grateful to Dr. Manoj Pant, Joint Director, DES for extending his cooperation and support at various stages of the study. Our sincere thanks are due to Shri Shushil Kumar, Director, DES and Shri Pankaj Naithani, Additional Director, DES for their valuable suggestions and encouragement in completing the study. We are also thankful to Shri G.S. Pande, Deputy Director and other officers of DES for their inspiring support. The Giri Institute of Development Studies (GIDS) provided unstinted support in the smooth conduct of the study. We express our gratitude to Prof. S.R. Hashim, Chairman, Giri Institute of Development Studies (GIDS), Lucknow for his valuable guidance. We are also grateful to Dr. Himanshu and Prof. Amitabh Kundu for their valuable inputs. We acknowledge the vital research support provided by Shri Vachaspati Shukla during the initial stages of the study. We are also grateful to Professor Surendra Kumar, Director, GIDS for extending his full cooperation during the entire duration of the study. We express our gratitude to all our colleagues in GIDSCol. (Retd.) D.P. Singh, Finance and Administrative Officer, Mr. R.S. Bisht, Office Superintendent, and Mr. Sunil Srivastava, Accountant- for efficient project management services. We also thank Mr. K.K. Verma for typesetting and formatting the study report. We hope the findings of the study would be useful to policy planners and line department organisations of Government of Uttarakhand, and NGOs in prioritising their strategies and actions towardsquicker eradication of poverty and minimising vulnerabilities of population in Uttarakhand. It would also be useful to researchers and students interested in the issues of poverty, inequality and regional development in India. Rajendra P. Mamgain M.H. Suryanarayana CONTENTS Preface Contents List of Tables List of Figures List of Abbreviations Chapter I: Introduction The Context 1 Why is Poverty Estimation Required? 2 Approaches of Estimation of Poverty at District Level 3 Policy Initiatives 7 Objectives of the Study 9 Chapter Plan 9 Chapter II: Uttarakhand Economy: An Overview Introduction 11 Growth and Regional Inequalities 12 Demographic Changes in Uttarakhand 17 Education Development in Uttarakhand 23 Health and Basic Amenities 28 Summing Up 30 Chapter III: Levels of Living in Uttarakhand: Select Dimensions Introduction 39 Population Composition: Social Groups 39 Distributional Profiles 40 Relative Profiles of Consumption Distributions 43 Absolute Deprivation 49 Mainstreaming/Marginalization 54 Summary 68 Chapter IV: Deprivation in Uttarakhand: A District-wise Profile Introduction 71 Data Base and Methodology 72 Inter-district Disparities in Consumption 72 Relative Inequality: District-wise Nominal Consumption 80 Distribution District-wise Estimates of Poverty 83 Rural-Urban Profile 89 Incidence of Poverty across Hills and Plains 91 Deprivation and its Determinants 92 Findings and Recommendations 93 Chapter V: Explaining Poverty in the Framework of Employment and its Quality Introduction 97 Employment in Uttarakhand 98 Structure and Quality of Employment 102 Demand Side Dynamics of Employment 112 Correlates of Poverty and Employment 114 Summing Up 115 Chapter VI: Summary and Conclusions 121 Deprivation and Inequality-A Comparative Picture 122 District-wise Poverty and Inequality in Uttarakhand 125 Eradicating Poverty and Reducing Vulnerability through Creating 127 Quality Employment References 133 List of Tables Table 2.1 Distribution of Rural Households by Monthly Income of Highest 16 Earning Member (Rs.) 2.2 Select Demographic Features of Uttarakhand and India, 2011 18 2.3 Share of Migrant Population