Rural Poverty in India: Alternative Indices and Sensitivity Analysis

Abstract

In this paper, we have used consumption expenditure survey data for 2011-2012, 2022-2023 and 2023-2024 focussing on rural poverty. Apart from the headcount ratio, we have used alternative indices of poverty measures suggested in the literature. These measures often emphasize relative dimensions of poverty by segregating groups of the poor from the non-poor and generating ordinal rank weights. Four poverty indices have been estimated as given by Sen, Thon, Takayama and Srivastava. The poverty indices show that, in general, the rural poverty index has fallen sharply over time between 2011-2012 and 2022-2023. We have undertaken a sensitivity analysis with respect to all the poverty measures, including the headcount ratio, to examine whether there is a lot of bunching around the poverty line such that small increases in the poverty line lead to large increases in the incidence of poverty. Our results show that the nature of sensitivity changes according to the years under consideration. The fall in rural poverty indicates the impact of social support measures adopted by the central and state governments for lower-income groups in recent years.