Rural Poverty in Jharkhand: An Empirical Exploration of Socio-Economic Determinants Using High Frequency Panel Data

Abstract

In India, poverty reduction is one of the major objectives of economic development programmes. 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. There exists a substantial interstate and urban rural differential in the cost of goods and services. The present study envisages analyzing the nature, extent and severity of rural poverty across different household classes at selected villages in the state of Jharkhand. It also attempts to find out the determinants of poverty in the villages under study with the help of data obtained from four village’s viz. Dubaliya, Hesapiri, Dumariya and Durgapur under the project entitled Tracking change in rural poverty in household and village economies in Eastern India. For this study, we used a method known as FGT index to measure the incidence of poverty (headcount ratio), intensity of poverty (poverty gap ratio) and severity of poverty (squared poverty gap ratio). To find out the determinants of poverty, affecting the probability of an individual being poor, we estimated a Probit model using poverty as a dependent factor-a binary (poor-1 and non-poor-0) and a set of agricultural and socio-economic variables as explanatory variables. The severity of poverty was least (0.9%) in Dubaliya village, whereas it was highest in Durgapur village (15.4%) of Jharkhand where incidence and depth of poverty were also comparatively high. Even in case of poverty severity, labour class households and large farm households appears to be comparatively less affected than that of small and medium classes. However, in general, the pattern of severity is apparently mixed here. 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.