PM Narendra Modi, on July 27, called for states to set zero poverty targets as a priority for Viksit Bharat by 2047.
A MC analysis of poverty reduction across states shows that high-growth states made significant gains in poverty reduction.
Even as half of the 164 million people lifted from poverty between FY16 and FY23 belonged to three states of UP, Bihar and Madhya Pradesh.
However, southern states - Andhra Pradesh, Tamil Nadu and Telangana were more successful in reducing the proportion of multidimensionally poor.
Who is defined as poor?
A Niti Aayog paper released in January pegged the number of multidimensional poor, who lack access to basic services like house, water, sanitation, at 11.3 percent of the population in FY23 or nearly 160 million people.
How the states stack up?
In Telangana, for instance, the poor population declined by 70 percent, whereas Tamil Nadu, Andhra Pradesh, Maharashtra and Odisha witnessed a 60 percent drop in poor population.
On the other hand, Bihar’s poor population was down only 43 percent in FY23 compared with seven years ago, whereas UP’s was down 49.6 percent.
The number of poor people across the country halved during this period.
Although the upliftment of multidimensional poverty also depends on provision of services from the government and not just income, an MC analysis shows a correlation between rising per capita income and reduction in multidimensional poverty.
States with higher per capita income growth did better on poverty reduction than states with lower per capita income growth.
In Telangana, per capita income rose 121 percent between FY16 and FY23, whereas Odisha witnessed a 124 percent jump in per capita income.
On the other hand, per capita income increase was just 78 percent for both Bihar and Uttar Pradesh.
The level of per capita income also had a bearing on poverty reduction, but not as strong as the growth. That is the reason why Maharashtra, despite a 71 percent increase in per capita income, was able to reduce poverty at a faster rate than Uttar Pradesh.
UP’s per capita income at Rs 83,686 was a third of Maharashtra’s at Rs 2.52 lakh and a fourth of Telangana’s at Rs 3.11 lakh.
Moreover, analysis shows that states with low incidence of poverty and low per capita income growth barely moved the needle on poverty reduction.
Punjab with 4.35 percent poverty rate in FY23, witnessed its poverty decline 17.6 percent between FY23 and FY16, as per capita income rose at the slowest pace of 53.6 percent during this period.
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