How marginalised are the marginalised in India: Evidence from the latest consumption data

Social factors play a critical role in determining poverty risk in India. There is a considerable difference in poverty risk among different caste groups. Marginalised groups tend to have a relatively higher poverty risk when compared to the general caste groups. This can be due to historical and systemic reasons. We dissect the poverty risk among different caste groups using the recent Household Consumption Expenditure Survey. The last time the government of India came up with an official poverty estimate was in 2014, under the committee led by former Reserve Bank of India governor, C Rangarajan. Since we have no official estimate for the poverty line, we created a set of poverty line metrics and estimated poverty risks among various caste groups. Using multiple definitions of poverty lines allows us to check the robustness of our interpretations.

The Household Consumption Expenditure Survey 2022-23 (HCES: 2022-23) collected data on the “items received free by the households through various social welfare programmes” for the first time in the history of consumption expenditure surveys. This allows us to examine the distribution of beneficiaries of the social welfare programs run by the government. These “freebie” items can broadly be divided into two groups: food items (14 items) and non-food items (seven items). The food items include cereals (nine items), pulses, gram, sugar, salt, and edible oil. The seven non-food items include laptop/PC, tablet, mobile, bicycle, motorcycle/scooty, clothing, and footwear.

Using the unit-level data from HCES: 2022-23, we compute the proportion of households that received the free items across the four socio-economic categories: Scheduled Tribe (ST), Scheduled Caste (SC), Other Backward Classes (OBC), and others. Digging deeper, we also examine the proportion of households receiving durable items (across rural and urban areas). Further, we compute the poverty risk ratios for these four groups.

A clarification regarding the choice of the poverty line is in order here. There are some crucial changes in survey methodology for HCES: 2022-23, rendering it non-comparable with earlier consumption expenditure surveys. We need a newer measure of the poverty line. Since we do not have an official measure, we use four different poverty lines to estimate poverty risk ratios. The first (Rural: ₹1,452, Urban: ₹1,752 per month) and the fourth (Rural: ₹ 2,407, Urban: ₹ 2,905) poverty lines correspond to $1.9 and $3.15 poverty lines (World Bank), respectively. Anyone who earns less than these amounts in a month in rural and urban areas, respectively, is classified as poor. The second (Rural: ₹1,622, Urban: ₹1,929) and the third (Rural: ₹1,837, Urban: ₹2,603) poverty line corresponds to Tendulkar and Rangarajan methodology. Using four such metrics, we create results that are robust to the choice of a threshold for poverty.

The concept of poverty risk is an important indicator for understanding horizontal inequalities. For a population group, the ratio of the poverty rate of the population group and the poverty rate for the whole population is used. A value greater than unity indicates that the given group is more vulnerable to poverty than the average population. The higher the value, the greater this vulnerability. For example, a value of 1.9 would mean that the sub-group group is 90% more likely to be poor than the average population.

The accompanying table presents the poverty risk ratios for various socio-economic groups across the urban and rural areas, using varied poverty lines. The numbers are disturbing, to say the least! STs are the most marginalised of all groups, per the calculation using these poverty lines. When we lower the bar of the poverty line, we find that the risk of being poor increases substantially for rural and urban STs. The rest of the groups do not see such a pattern. It shows that the marginalised groups are exposed to extreme poverty much more than the other groups. This suggests that India is still a hierarchical society. We also find that the poverty risk among rural OBCs remains lower than 1, reflecting a relatively better position for them. For urban OBCs, the number is higher but still very close to 1, which reflects that their position is not very different from the rest of the people. The urban population’s poverty risk is generally higher than their rural counterparts.

These numbers provide a fresh perspective on poverty in India at a disaggregated level. The estimates suggest an urgent need to have an official demarcation of the poverty line and bring in policy changes to impact the lives of the social groups less fortunate than the average citizens.

Vikash Vaibhav and Arun Kumar Kaushik teach Economics at OP Jindal Global University. The views expressed are personal

Get Current Updates on…

See more