September - October 2011

Orissa Review

Trends and Dimensions of

Rural Poverty in Orissa
Dr. R K Panda
Asima Sahu

Orissa shows the highest incidence of poverty at 46.6 per cent in 2004-05 among the
major states in the country. The overall percentage of poor has dropped by merely 2
percentage points from 48.6 per cent in 1993-94 to 46.6 per cent in 2004-05. Percentage
of rural poor has dropped 2.9 percentage points from 49.7 per cent in 1993-94 to 46.8 per
cent in 2004-05.This paper deals with the trends and dimensions of rural poverty in Orissa.
It shows that the trends of rural poverty are highly fluctuating over the entire period of
analysis from 1957 to 2005 in Orissa. The incidence of rural poor is 47% and the incidence
of calorie poor is 79% in 2004-05. The vulnerable sub-groups are southern region (73%)
and followed by northern region(59%), the scheduled tribes (76%) and scheduled castes
(50%) across social groups, the agricultural labourers (65%) and other labourers (52%)
across household type in rural areas in 2004-05.

Introduction:

period. The elasticity of poverty with respect to

per capita income is as low as 0.084 which
indicates very little percolation of growth to the
poor in the state. This unfortunate development
is surprising since realization of faster poverty
reduction has been a main argument for higher
growth itself. In fact, incidence of poverty is
recorded a downward trend since mid-1970s at
the all-India level. It looks like the development
experience of Orissa is an exception among the
major states of India.

Orissa has been one of the poorest states

among the 15 major states in India. It shows the
highest incidence of poverty at 46.6 per cent in
2004-05 among the major states in the country.
The incidence of poverty has hardly changed in
the State. The overall percentage of poor has
dropped by merely 2 percentage points from
48.6 per cent in 1993-94 to 46.6 per cent in
2004-05. Percentage of rural poor has dropped
2.9 percentage points from 49.7 per cent in 199394 to 46.8 per cent in 2004-05. Thus, poverty
has remained virtually invariant over a 11-year
period despite the fact that per capita income of
the state has increased by 48 per cent during this

Poverty in Orissa:
Development in Orissa began in the
1940s and escalated during the post
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independence era in the 1950s, with the

introduction of planned development. The state
has been operating on the assumption that the
development of Orissas immense reserve of
natural resources would lead to all round
development of the state and thereby also alter
the conditions of the poor. However, Orissa still
has a very large number of poor population. The
proportion of poor in Orissa has always remained
higher than the national average. There was not
much decline in the state poverty in 1970s. The
decline gained momentum in the 1980s and it
seems to be negligible in the 1990s. It declined
by less than 0.3 percentage points per annum for
rural Orissa. According to various Planning
Commission Reports, in Orissa 180 lakh people
were living below the poverty line in 1983, which
declined to 161 lakh in 1993-94 and it reached
at 179 lakh in 2004-05. A large reduction took
place particularly between the period 1983 to
1987. Thus, the number of poor in Orissa has
risen after 1993-94. Table-1 shows the
percentage of poor and rural poor living in Orissa
from 1973 to 2005.

Table-1 shows the percentage of poor living below

the poverty line in Orissa in total and in rural Orissa
from 1973-74 to 2004-05. Data reveals that in
1973-74, 66.2 percentage of people were living
below the poverty line in the state, which
increased to 70.1 per cent in 1977-78, declined
to 65.3 per cent in 1983, to 55.6 per cent in
1987-88, to 48.6 per cent in 1993-94 and again
declined to 46.6 per cent in 2004-05. Poverty in
Orissa started declining after 1978; decline was
more pronounced between 1977-78 and 198788 (i.e. 14.5 percentage points). Similarly, in rural
Orissa, 67.2 per cent of people were living below
the poverty line, which increased to 72.4 per cent
in 1977-78, again reduced to 67.5 per cent in
1983, to 57.6 per cent in 1987-88, and to 49.7
per cent in 1993-94 and finally reduced to 46.8
per cent in 2004-05. Between 1993-2005,
poverty has declined only 2 percentage points and
rural poverty has declined 2.9 percentage points.
Though, poverty is reducing over the period in
Orissa, the rate of reduction is not significant and
the percentage of poor is too high.
Rural poverty in Orissa is still very high
after six decades of Independence of the country.
An earlier study by Mahendra Dev (1992) had
revealed that in between 1961- 62 to 1986-87,
around 65 percent of rural population in Orissa
were living below poverty line instead of the
quoted figure of 48.3 percent as estimated by the
Planning Commission. Dubey, A. (2002) made a
study on Calorie Consumption and Nutritional
Deficiency in India: A Disaggregated Analysis from
1993-94 and 1999-00. According to NSS data,
there seems to be substantial differences between
the income/consumption measures and calorie
poverty measures. The average normative calorie
requirements (which form the basis for the Indian
poverty norm), have undergone changes since it
was derived. The norm appears to have declined

Table-1: Percentage of poor in Orissa from

1973-2005
Year

Total

Rural

1973-74

66.2

67.3

1977-78

70.1

72.4

1983

65.3

67.5

1987-88

55.6

57.6

1993-94

48.6

49.7

2004-05

46.6

46.8

Source: Government of Orissa, Economic

Survey, 2009-10
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Orissa Review

over the 1980s and 1990s. According the calorie

poverty measure, poverty in Orissa as a whole
declined between 1993 and 1999. The trend for
coastal Orissa is similar for the two measures
(decline by about 15 percentage points). But for
both the southern and northern region, the calorie
measure shows important differences, with (a) a
decline in the 2nd half of the 1990s, and (b) much
smaller differences between coastal and other
parts of Orissa. Therefore, this paper made an
attempt to study trends and various dimensions
of rural poverty in Orissa. It has divided into two
parts. First part deals with the trends of rural
poverty from 1957 to 2005 and the second part
deals with the various dimensions of poverty in
rural Orissa.

Trends of Poverty in Rural Orissa:

After the discussion of poverty scenario
in Orissa, the present paper is to study the trends
and various dimensions of rural poverty in Orissa.
There are three measures of poverty i.e. (i) head
count ratio which measures the incidence of
poverty, (ii) poverty gap which measures depth
of poverty and (iii) squared poverty gap which
measures severity/intensity of poverty. These three
measures over the period from 1957-58 to 200405 in rural Orissa based on the NSSO survey
reports are shown in the Table-2 and Figure-1.

Table-2: Trends of Poverty in Rural Orissa (1957-58 to 2004-05)

Sl.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

NSSO Survey
Period
1957-58
1958-59
1959-60
1960-61
1961-62
1963-64
1964-65
1965-66
1966-67
1967-68
1968-69
1969-70
1970-71
1972-73
1973-74
1977-78
1983

Head
Ratio

Count Poverty
Gap Index

73.18
71.88
69.65
72.61
79.84
59.35
69.18
73.74
72.31
74.70
74.43
79.03
74.12
74.20
77.05
72.38
68.43

23.18
18.96
19.49
20.12
13.90
17.95
18.52
18.28
19.00
19.98
24.30
22.90
22.17
23.69
17.66
20.44
16.96
103

Squared Poverty
Gap Index
11.12
8.47
7.72
8.28
5.91
7.46
7.54
7.80
7.96
8.44
11.07
10.63
10.16
10.95
7.10
8.95
7.12

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Orissa Review

18
19
20
21
22
23
24
25

1986
1987-88
1989-90
1990-91
1992-93
1993-94
1999-00
2004-05
Mean
S.D

67.53
58.62
57.64
51.79
46.39
49.81
48.13
46.9
66.51
10.72

11.95
11.69
8.45
5.37
8.19
11.93
10.77
12.1
16.72
5.33

4.46
3.84
2.40
1.53
2.53
3.96
3.45
4.24
6.92
2.90

Source: i) The World Bank (1997), India: Achievements and Challenges in Reducing Poverty,
Washington DC. And published results of NSS, New Delhi, ii) NSS Reports of different rounds
Table-2 represents the long- term fluctuation in
the three indicators like poverty incidence, poverty
gap index and squared poverty gap index for rural
Orissa during the period 1957-58 to 2004-05.
Data reveals that the poverty ratio figures are
highly fluctuating over the entire period of analysis
from 1957 to 2005 in rural Orissa. On the other
hand, poverty gap index and squared poverty gap
index reflect almost the same picture with different

rates of decline. The incidence was highest in

1961-62 (79.84 per cent) and lowest in 199293 (46.39 per cent). The poverty gap was highest
in 1968-69 (24.31 per cent) and lowest in 199091 (5.38 per cent) and squared poverty gap was
highest in 1957-58 (11.13 per cent) and lowest
in (1990-91). From 1957-58 to 1973-74 the
incidence of poverty was very much fluctuating in
Orissa. But since 1973-74 it started reducing
significantly.

Figure-1: Poverty Trends in Rural Orissa

Source: Table-2
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Orissa Review

The Figure-1 shows the long- term trends

in poverty indicators like poverty incidence, gap
index and squared poverty gap index for rural
Orissa from 1957-58 to 2004-05. All the three
trends of poverty are highly fluctuating over the
entire period of analysis.

Incidence of Poor and Calorie Poor by Region:

The NSSO data divides the entire Orissa
into three agro-climatic regions i.e, Coastal,
Northern and Southern. For that reason the
analysis is based on those regions. According to
NSS data, the incidence of poor has experienced
a large fall from 45 per cent in 1993- 94 to 27
per cent in 2004-05 in Coastal region. Southern
region has experienced an increase in poverty by
4 percentage points from 68.8 per cent in 199394 to 72.7 per cent in 2004-05 and the Northern
region has witnessed the biggest rise in incidence
of rural poverty by 13 percentage points from
46 per cent in 1993-94 to 59 per cent in 200405.

Coastal

Poor
(%)

Calorie
Poor (%)

27.4

64.6

27.1

40.1

22.8

Northern

59.1

79.1

44.0

37.0

Rural poverty is also associated with

social differentiation. Orissa has a very high
percentage of scheduled tribe population, i.e.
22.13 per cent in 2001 as compared to only 8.01
per cent in All-India level, while the proportion of
scheduled caste population is around the all-India
average (i.e.16.53 in Orissa and 16.33 in India).

Share

Calorie
Poor (%)

28.9

Incidence of Poor and Calorie Poor by Social

Groups:

Table-3: Incidence of Poor and Calorie Poor

by region in Rural Orissa in 2004-05

Poor
(%)

91.5

Table-3 shows the incidence of poor

and calorie poor by different regions in Rural
Orissa in 2004-05. Data reveals that the
incidence of poor is found to be highest in
southern region (i.e. 91.5 per cent), 59 per cent
in northern region and 27 per cent in coastal
region of the state. Similarly, calorie poor is found
to be more in Southern region i.e. 91 per cent,
79 per cent in Northern region and 64.6 per
cent in Coastal region of rural Orissa. The share
of poor are found to be more in northern region
(44 per cent), 28 per cent in southern and 27
per cent in coastal region of Orissa. It indicates
that there exists very marginal differences
between southern and coastal region with regard
to the share of poor. But the share of calorie
poor is more in Coastal region i.e. 40 per cent,
37 per cent in Northern region and 23 per cent
in Southern region during 2004-05 in rural
Orissa. Thus, the incidence of poor and calorie
poor are highest in rural part of southern region.
The share of poor is highest in rural part of
northern region and the share calorie poor is
highest in rural part of Coastal region.

Poverty is a multi-dimensional concept.

Here the study discussed incidence of poor and
calorie poor across regions, by different social
groups and by different type of households in rural
Orissa. The estimation based on poor category
refers to Monthly Per Capita Expenditure (MPCE)
below the poverty line provided by the Planning
Commission and calorie poor category refers to
those below 2400 per capita in rural areas.

HCR

72.7

Source: Mishra S. (2009)

Dimensions of Poverty:

NSS Region

Southern

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Orissa Review

Table-4: Incidence of Poor and Calorie

Poor by Social Groups in Rural Orissa in
2004-05
Social Group

HCR
Poor
(%)

Similarly, the poverty in terms of calorie

intake is very high among these backward caste
people. The head count ratio is 89 per cent among
the scheduled tribe population, 73 per cent among
the scheduled castes population, 70 per cent
among other backward castes and 65 percent
among others. The share of calorie poor is found
to be more among other backward caste
population (36.9 per cent) followed by scheduled
tribe population (30.6 per cent) rather than
scheduled caste population (17.3 per cent) and
others (15.2 per cent). Thus, incidence of poor
and calorie poor are highest among scheduled tribe
population. The share of poor found to be highest
among scheduled tribe population and calorie
poor found to be highest among other backward
caste population in rural Orissa.

Share

Calorie
Poor (%)

Poor Calorie
(%)
Poor (%)

Scheduled Tribe 75.8

89.1

41.5

30.6

Scheduled Caste 49.9

73.5

18.7

17.3

Other Backward 37.1

Castes

69.9

31.1

36.9

Others

65.3

8.7

15.2

23.5

exclusively due to fall in other backward

categories and Others categories.

Source: Mishra S. (2009)

Table-4 shows the Incidence of Poor and Calorie

Poor by Social Groups in Rural Orissa in 200405. Data reveals that very high incidence of
poverty prevails among the scheduled tribe and
scheduled caste population in the state. The head
count ratio is as high as 76 per cent among the
scheduled tribe population and 50 per cent among
the scheduled caste population compared to 37
per cent for Other Backward Caste group and
23 per cent for others in 2004-05. The scheduled
tribe and scheduled caste population account for
60 per cent of the number of poor in the state as
a whole while their share in total population is
only 43 per cent (25.6% and 17.6% of the total
rural population are scheduled tribes and
scheduled castes respectively as per the NSSO
estimates in 2004-05). What is more important
is the fact that proportion of scheduled tribe
remaining below the poverty line has increased
from 71 per cent in 1993 to 76 per cent in 2004.
There is no change in poverty percentage among
scheduled caste population between 1993 and
2004. The two percentage points fall witnessed
in poverty ratio for the entire population is

Incidence of Poor and Calorie Poor by

Household Type:
Table -5: Incidence of Poor and Calorie
Poor by Household Type in Rural Orissa in
2004-05
Household Type

HCR
Poor
(%)

Calorie
Poor (%)

HHT-1

32.8

68.1

13.3

17.3

HHT-2

64.5

82.2

38.6

30.9

HHT-3

52.0

84.1

11.5

11.7

HHT-4

46.1

72.6

32.7

32.3

HHT-9

19.8

62.4

39

7.8

Source: Mishra S. (2009)

106

Share
Poor Calorie
(%)
Poor (%)

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Orissa Review

Table-5 represents the incidence and

share of poor and calorie poor by household type.
The present study is based on rural households.
So it is important to see what type of households
are falling under poverty in rural areas. In rural
areas, household type (HHT) 1 denotes Selfemployed households in non-agriculture, HHT-2
denotes agricultural labourer households, HHT3 denotes other labourer households, HHT-4
denotes self-employed households in agriculture
and HHT-9 denotes other households
respectively.

incidence of poor and calorie poor is highest in

rural part of southern region followed by northern
region. The share of poor is found to be highest
in rural part of northern region and calorie poor is
highest in rural part of Coastal region. Among
different type of households in rural Orissa, the
share of poor and calorie poor are highest among
the agricultural labourer households and selfemployed households in agriculture.
References :
Dubey, A. (2002), Calorie Consumption and
Nutritional Deficiency in India: A Disaggregated
Analysis (1993-94 and 1999-00), Draft paper.

Understandably, agricultural labourer

households and other labourer households in rural
Orissa have a greater incidence of poor (i.e. 64
per cent and 52 percent respectively) and calorie
poor (i.e. 82 per cent and 84 per cent
respectively) in 2004-05. But the percentage of
poor and calorie poor are more among the
agricultural labourer households (38.6 per cent
and 30.9 per cent respectively) and self-employed
households in agriculture (32.7 per cent and 32.9
per cent respectively).

GOO (2008), Economic Survey 2007-08, Department

of Economics and Statistics.

Mahendra, Dev. S. (1992), Rural Poverty of India:

Incidence, Issues, and policies, Asian
Development Review, Vol. 10, No.1.

Panda M (2008), Economic Development in Orissa:

Growth Without Inclusion?, IGIDR,WP-2008-025.

Mishra S. (2009), Poverty and Agrarian Distress

Conclusion:

in Orissa IGIDR, WP-2009-006.

World Bank (1997), India, Achievements and

To sum up, Orissa has been one of the

poorest states in India. Poverty reduction has not
been impressive in the state especially rural
poverty which is a matter of concern. In Orissa,
between 1993 to 2005, the number of poor has
increased though there is very small decline in
percentage of poor. The trends of rural poverty
are fluctuating over the entire period of analysis
from 1957 to 2005 in Orissa. Incidence and share
of poor are highest among scheduled tribe
population and incidence of calorie poor is highest
among scheduled tribe population but the share
of calorie poor is highest among other backward
caste population in rural Orissa. Region-wise, the

Challenges in Reducing Poverty, Report No.

16483-IN, May 27, Country Operations, Industry
& Finance Division, Country Department II, South
Asia region.

Dr. R.K. Panda, Former Professor of Economics, P.G.

Department of Analytical and Applied Economics, Utkal
University, Bhubaneswar.
Mrs. Asima Sahu, C/o -Jayadeva Sahu, P.A. to Director
Directorate of Economics & Statistics Heads of Deptt.
Bldg., 4th Floor, Bhubaneswar-751001, E-mail:
[email protected].

Art is like a border of flowers along the course of civilization. Lincoln Steffens
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