Home >Specials >India's Bread Butter Economy >Where do the poorest Indians live?

Mumbai: India saw its most significant victories in the long war against poverty between 2004-05 and 2011-12. A net 137 million people, or 15% of the population, lifted themselves out of poverty, bringing down the national poverty rate to 22%.

While the pace of poverty decline varied across states, there has been some level of convergence across states over the past few years, with no stark outliers anymore. However, the poor themselves are a diverse group, and not all states have done equally well in lifting people out of extreme poverty.

As the accompanying chart shows, states with the highest concentration of extreme poverty in rural and urban parts are the same: Chhattisgarh, Odisha, Jharkhand, Bihar, Madhya Pradesh and Uttarakhand. Most of India’s extremely poor can be found in these states.

In our analysis here, we define the poorest as those who consume less than 600 per capita per month in the villages and below 860 per capita per month in the cities. These cut-offs help identify the poorest tenth of the Indian population. Since income figures are not easily available, all poverty estimates in India rely on consumption figures.

An important caveat is that, unlike the official poverty numbers estimated by the Planning Commission, we have not made state-specific price adjustments, and used these absolute cut-offs as a rough guide to identify extreme deprivation.

The high proportion of extremely poor in states with high tribal populations is not surprising. However, the high proportion of extreme poor in a state such as Chhattisgarh, which has won accolades for its impressive social security schemes, is a bit intriguing. About a third of Chhattisgarh’s population lies below our extreme poverty line. Odisha is a close second, with a little less than a third of its people falling below the national extreme poverty line.

There is another intriguing aspect to the data: while Bihar and Uttar Pradesh have similar poverty levels, Uttar Pradesh has among the least number of people living below the extreme deprivation line (roughly 1%) while Bihar is among the worst-off states in this respect, as the chart shows. The contrast between Uttar Pradesh and Bihar in this respect is as yet an unsolved paradox. Other states that have low proportion of the extremely poor such as Punjab and Kerala also have below average poverty rates, unlike Uttar Pradesh.

This is the fifth in a several-part series Mint will run over the next few weeks examining the key changes in consumption patterns across India over the past few years, based on the official statistics published by the National Sample Survey Office (NSSO). For the earlier stories, go to

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