Determinants of Rural Poverty: An Empirical Study of Socio-Economic Factors in Jharkhand, India

Abstract

In India, poverty reduction is one of the major objectives of economic development programmes. Though, India was the first country in the world to define poverty as the total per capita expenditure of the lowest expenditure class, which is required to ascertain a minimum intake of 2400 kcal/day in rural and 2100 kcal/day in urban areas. The same is converted into financial terms and the poverty line is defined as a minimum level of income or expenditure, which is periodically updated. The latest updated poverty line is Rs.356.30 in rural areas and Rs.538.60 in urban areas in 2004-05 (Planning Commission, 2007). There exists a substantial interstate and urban rural differential in the cost of goods and services. One in three Indians lives below the poverty line according to the Tendulkar Committee report which used a measurement of goods and services, rather than calorie intake, to calculate poverty. The World Bank estimates that 80% of India's population lives on less than $2 a day which means a higher proportion of its population lives on less than $2 per day as compared with sub-Saharan Africa. Income based approaches to poverty can not tell more about other forms of deprivations poor go through. Poverty is basically a denial of a range of material needs such as nutritious food, safe drinking water, shelter, healthcare, education, etc. Therefore, multidimensional poverty measures provide better understanding of the nature of poverty-at local, regional, national, and world level. The present study attempts to track and explore some of the important causes of rural poverty in the state of Jharkhand. Socio-economic indicators provide a background to understanding the poverty scenario in a country. These indicators provide data on education, gender, poverty, housing, amenities, employment and other economic indicators. These indicators for the country as well as states will help in identifying the linkages between socio-economic indicators and achievement of health goals. It was found that the rate of decline in poverty is more in agricultural labour class households (27%) than that of farming households (1.9%). Analysis of household data of the sample villages also highlights a high incidence of rural poverty ranging from more than 20 percent in Dubaliya to about 76 percent in Durgapur. Incidence of poverty for four groups of households viz. labour, small, medium and large shows mixed pattern of incidence of poverty. Labour class households and large households were comparatively less poor in most of the villages than that of the other classes i.e., small and medium households. Among various determinants of poverty, obtained by estimating a probit model, considering poor as 1 and non-poor 0, it was found that length of education and number of earning members in family had significant poverty reducing effect, implying that for taking a poor household out of poverty promotion of education and creation of more employment opportunities to provide employment to a large number of household members are essential. It also emanates that big family size and increased dependency on agriculture would induce poverty and it is therefore imperative that family planning policies and alternative non-farm employment programme should receive due priority in any poverty alleviation programme in the state.