Poverty and inequality in Odisha, India

Abstract

Odisha has gone on from being the most underdeveloped Indian state to be the state that has recorded the highest decline in poverty among the states. We undertake decomposition analyses to assess the redistributive changes in poverty and inequality over the period 1993–1994 and 2011–2012 across regions and social groups, examining the NSSO Consumer Expenditure Survey data. We find that while Odisha has succeeded in substantially reducing both rural and urban poverty incidence, this change has not met desirable subgroup‐specific variations. Among regions, southern and northern Odisha have not kept pace with coastal Odisha in poverty reduction during the study period. The rate of poverty reduction for the Scheduled Tribes and the Scheduled Castes has been dismal. Overall, we found the growth effects on poverty reduction to be more prominent over inequality effects and population shift effects on poverty, although these effects varied in contexts. While inequality in urban regions rose, it declined in rural regions. While at the state‐level, the within‐group inequality has declined between 2004–2005 and 2011–2012 (coincident with the present Naveen Patnaik rule); the between‐group inequality has increased during the period. Rural Odisha has seen a reduction in both within‐group and between‐group disparities, whereas urban Odisha has fared the opposite.