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ESTIMATION OF DISTRICT LEVELPOVERTY IN UTTARAKHAND

Rajendra P. Mamgain

M.H. Suryanarayana

Submitted to

Directorate of Economics and StatisticsDepartment of Planning

Government of Uttarakhand

GIRI INSTITUTE OF DEVELOPMENT STUDIES(An Autonomous Institute Funded by ICSSR and Govt. of Uttar Pradesh)

Sector - O, Aliganj Housing SchemeLUCKNOW - 226024, (U.P.) INDIA

Phones: (0522) 2321860, 2325021Telefax: (0522) 2373640

E-mails: [email protected];[email protected] 2017

mailto:[email protected]

mailto:[email protected]

PREFACE

Measurement of poverty and its elimination has been a core strategy of the development

planning process in India since the beginning of its plan process. However, measuring

poverty and its eradication has been a daunting challenge. Despite significant progress in the

methodology of the measurement of poverty in India, the poverty estimates suffer due to

paucity of data at more disaggregated level for effective policy interventions. In recent

periods, with the availability of large data sets from NSSO quinquennial rounds on

consumption expenditure both for central and state samples, it is possible to make robust

estimates of poverty at district level for most Indian states. Keeping this in view, we have

attempted to estimate district-wise poverty and inequality in Uttarakhand on the request of

Directorate of Economics and Statistics (DES), Government of Uttarakhand.

The study brings out several interesting features of poverty and inequality in

Uttarakhand, which may be useful in prioritising action plans and resource allocations to

eradicate poverty and promote inclusive development. The study has observed remarkable

economic progress and resultant reduction in poverty in Uttarakhand particularly after its

formation on November 9, 2000. However, high economic growth stands accompanied with

widening regional disparities over the years. This is also reflected in significant variations in

average per capita consumption expenditure acrossthe districts of the state. The incidence of

poverty in the state declined by almost three times from 32.7 per cent in 2004-05 to 11.3 per

cent in 2011-12, which has been much faster than its neighbouring state Himachal Pradesh

and parent state, Uttar Pradesh. Among social groups, the incidence of absolute poverty was

the least among the Other Social Groups (OSGs), followed by the Other Backward Classes

(OBCs) and highest for Scheduled Castes (SCs) in 2004-05. The percentage point reduction

in poverty in Uttarakhand between 2004-05 and 2011-12 was the maximum among SCs

(30.34) followed by OBCs (29.06), the Scheduled Tribes (STs) (20.52) and OSGs (18.88).

There was a more or less uniform reduction (around 65 per cent) in incidence of poverty

among all the social groups in rural Uttarakhand.

Our estimates show significant variations in the incidence of poverty across districts

in Uttarakhand ranging as high as 28.5 per cent in Pauri Garhwal and lowest 9.2 per cent in

Dehradun. In most of the hill districts the incidence of poverty is above the state average. The

incidence of rural poverty is generally the lowest in the richest quartile group of districts,

namely Dehradun, Udham Singh Nagar and Nainital. The marginal distribution of incidence

of rural poverty across districts is nearly symmetrical while those pertaining to extent of

inequality and cost of living are highly negatively skewed ones. This would mean that at least

half of the districts are densely located with respect to high extent of relative inequality and

cost of living. Rural-urban disparity in mean monthly per capita expenditure (MPCE) is the

lowest in Nainital (108.45) --- the richest in terms of rural mean MPCE but poorest fourth in

terms urban mean MPCE. Such disparity is the highest in Haridwar (212.13), which is the

third poorest rural district but second poorest urban district. The median disparity is highest

in Uttarakashi (172.10), which falls in the rural upper middle and urban lower middle quartile

group. These patterns show a failure of urban development to catch up with rural prosperity

leading to a development process far removed from the Kuzents’ inverted-U postulate.

Relative rural-urban spatial cost of living too throws up a picture different from the

conventional perception. In a majority of the districts, the rural spatial cost of living exceeds

the urban one.

The study points out that since most of the economic opportunities are concentrated in

plain areas of the state, hill areas are almost lagging on various indicators of economic

progress. Work opportunities are marred with seasonality and low levels of productivity

particularly in hill region of the state. The growth in non-farm employment opportunities has

been largely concentrated in the plain districts of the state. Due to lack of economic

opportunities and quality employment, the hill areas of the state have been experiencing

accelerated pace of long term exodusto plain areas of the state and other parts of the country.

It further warns that neglecting productive employment opportunities at the cost of

redistributive measures would not prove beneficial in the long run as it has serious economic

and political consequences particularly emanating from large scale job related exodus from

hill districts of the state.

The study states that creation of gainful employment opportunities with reasonable

social safety measures are critical in eradication of poverty and reduction in vulnerabilities of

population belonging to various regions and sub-groups of population in Uttarakhand. Thus,

along with creation of employment opportunities, skill development of both men and women

is crucial for various trades and occupations to improve their employability and productivity.

The study could be possible due to generous financial support from Directorate of

Economics and Statistics (DES), Government of Uttarakhand. We would like to specially

thank DES for its valuable support. We are grateful to Dr. Manoj Pant, Joint Director, DES

for extending his cooperation and support at various stages of the study. Our sincere thanks

are due to Shri Shushil Kumar, Director, DES and Shri Pankaj Naithani, Additional Director,

DES for their valuable suggestions and encouragement in completing the study. We are also

thankful to Shri G.S. Pande, Deputy Director and other officers of DES for their inspiring

support.

The Giri Institute of Development Studies (GIDS) provided unstinted support in the

smooth conduct of the study. We express our gratitude to Prof. S.R. Hashim, Chairman, Giri

Institute of Development Studies (GIDS), Lucknow for his valuable guidance. We are also

grateful to Dr. Himanshu and Prof. Amitabh Kundu for their valuable inputs. We

acknowledge the vital research support provided by Shri Vachaspati Shukla during the initial

stages of the study.

We are also grateful to Professor Surendra Kumar, Director, GIDS for extending his

full cooperation during the entire duration of the study. We express our gratitude to all our

colleagues in GIDSCol. (Retd.) D.P. Singh, Finance and Administrative Officer, Mr. R.S.

Bisht, Office Superintendent, and Mr. Sunil Srivastava, Accountant - for efficient project

management services. We also thank Mr. K.K. Verma for typesetting and formatting the

study report.

We hope the findings of the study would be useful to policy planners and line

department organisations of Government of Uttarakhand, and NGOs in prioritising their

strategies and actions towardsquicker eradication of poverty and minimising vulnerabilities of

population in Uttarakhand. It would also be useful to researchers and students interested in

the issues of poverty, inequality and regional development in India.

Rajendra P. Mamgain

M.H. Suryanarayana

CONTENTS

PrefaceContentsList of TablesList of FiguresList of Abbreviations

Chapter I: IntroductionThe Context 1Why is Poverty Estimation Required? 2Approaches of Estimation of Poverty at District Level 3Policy Initiatives 7Objectives of the Study 9Chapter Plan 9

Chapter II: Uttarakhand Economy: An OverviewIntroduction 11Growth and Regional Inequalities 12Demographic Changes in Uttarakhand 17Education Development in Uttarakhand 23Health and Basic Amenities 28Summing Up 30

Chapter III: Levels of Living in Uttarakhand: Select DimensionsIntroduction 39Population Composition: Social Groups 39Distributional Profiles 40Relative Profiles of Consumption Distributions 43Absolute Deprivation 49Mainstreaming/Marginalization 54Summary 68

Chapter IV: Deprivation in Uttarakhand: A District-wise ProfileIntroduction 71Data Base and Methodology 72Inter-district Disparities in Consumption 72Relative Inequality: District-wise Nominal ConsumptionDistribution

80

District-wise Estimates of Poverty 83Rural-Urban Profile 89Incidence of Poverty across Hills and Plains 91Deprivation and its Determinants 92Findings and Recommendations 93

Chapter V: Explaining Poverty in the Framework of Employment and itsQualityIntroduction 97Employment in Uttarakhand 98Structure and Quality of Employment 102Demand Side Dynamics of Employment 112Correlates of Poverty and Employment 114Summing Up 115

Chapter VI: Summary and Conclusions 121Deprivation and Inequality-A Comparative Picture 122District-wise Poverty and Inequality in Uttarakhand 125Eradicating Poverty and Reducing Vulnerability through CreatingQuality Employment

127

References 133

List of Tables

Table2.1 Distribution of Rural Households by Monthly Income of Highest

Earning Member (Rs.)16

2.2 Select Demographic Features of Uttarakhand and India, 2011 182.3 Share of Migrant Population in Uttarakhand 212.4 Literacy Rate in Uttarakhand, 2011 252.5 Educational Level of Population, 2011 262.6 Select Indicators of Health, 2015-16 293.1 (a) Distribution (%) of Population across Social Groups: Rural Sector

for Select States40

3.1 (b) Distribution (%) of Population across Social Groups: Urban Sectorfor Select States

40

3.2 (a) Measures of Average MPCE and Inclusion/Exclusion in/from theNational Mainstream: Rural Sector

41

3.2 (b) Measures of Average MPCE and Inclusion/Exclusion in/from theNational Mainstream: Urban Sector

41

3.3 (a) Levels of Average MPCE in Uttarakhand relative to Select StateAverages (Percentage difference): Rural Sector

44

3.3 (b) Summary Statistics on NSS Per Capita Consumer ExpenditureDistribution: Rural Sector (2004/05 & 2011/12)

44

3.3 (c) Extent of Inequality in the Rural Sector: 2004/05 &2011/12 453.4 (a) Levels of Average MPCE in Uttarakhand relative to Select State

Averages (Percentage difference): Urban Sector46

3.4 (b) Summary Statistics on NSS Per Capita Consumer ExpenditureDistribution: Urban Sector (2004/05 & 2011/12)

47

3.4 (c) Extent of Inequality in the Urban Sector: 2011/12 483.5 Extent of Mainstream Inclusion: Rural and Urban Sectors 493.6 Estimates of Poverty Lines by State and Method (Rs MPCE) 513.7 Estimates of Poverty by Sector, State and Method 533.8 (a) Estimates of Deprivation in the Rural Sector: Incidence, Depth and

Severity (2004/05 vs. 2011/12)54

3.8 (b) Estimates of Deprivation in the Urban Sector: Incidence, Depth andSeverity (2004/05 vs. 2011/12)

54

3.9 (a) Summary Statistics on Per Capita Monthly Consumer ExpenditureDistribution by Social Groups: Rural Uttarakhand

58

3.9 (b) Summary Statistics on Per Capita Monthly Consumer ExpenditureDistribution by Social Groups: Urban Uttarakhand

59

3.10 (a) Estimates of Deprivation: Incidence, Depth and Severity by SocialGroup: Rural Sector (2004/05 & 2011/12)

60

3.10 (b) Estimates of Deprivation: Incidence, Depth and Severity by SocialGroup: Urban Sector (2004/05 & 2011/12)

62

3.11 (a) Measures of Inter-Group Inclusion/Exclusion: Rural Uttarakhand 643.11 (b) Measures of Inter-Group Inclusion/Exclusion: Urban Uttarakhand 643.12 (a) Extent of Mainstreaming/Marginalization by social groups: Rural

Sector66

3.12 (b) Extent of Mainstreaming/Marginalization by Social Groups: UrbanSector

67

4.1 (a) Summary Profiles of District-wise Consumer ExpenditureDistribution: Rural Uttarakhand 2011/12 (At current local prices)

74

4.1 (b) Summary Profiles of District-wise Consumer ExpenditureDistribution: Rural Uttarakhand 2011/12 (At average state levelrural prices)

75

4.2 (a) Summary Profiles of District wise Consumer ExpenditureDistribution: Urban Uttarakhand 2011/12 (At current local prices)

78

4.2 (b) Summary Profiles of District wise Consumer ExpenditureDistribution: Urban Uttarakhand 2011/12 (At average state levelurban prices)

79

4.3 (a) Extent of Inequality in MPCE Distribution: Districts wise - RuralUttarakhand (2011/12) (At current local prices)

81

4.3 (b) Extent of Inequality in MPCE Distribution: District wise - UrbanUttarakhand (2011/12) (At current local prices)

82

4.4 District wise Estimates of Price-adjusted Poverty Lines:Uttarakhand 2011/12 (Rs.)

84

4.5 District-wise Estimates of Poverty: Uttarakhand (2011/12) (%) 854.6 District-wise Estimates of Poverty: Uttarakhand (2011/12) (%) 864.7 Poverty Profiles across Districts: Rural and Urban Uttarakhand

(2011/12)88

4.8 Rural-Urban Disparities in Economic Profiles 904.9 Estimates of Poverty by Hills and Plains: Uttarakhand: 2011/12 914.10 Estimates of Poverty (Incidence, depth and severity) across social

groups by Hills and Plains: Uttarakhand: 2011/1292

4.11 Poverty and its Determinants 935.1 Gender-wise Work Participation Rates in Uttarakhand, 2011 (in %) 995.2 District-wise Percentage Share of Marginal Workers in Uttarakhand 1025.3 Occupational Distribution of Workers (Main+Marginal), 2011 1035.4 Sector-wise Composition of Employment in Rural Areas of Hilly

Districts of Uttarakhand, 2005106

5.5 Per Capita GSDP in Uttarakhand by Sector, 2004-05 (at 1999-2000constant prices)

111

5.6 Growth in Number of Enterprises* and Employment between 2005and 2013 (% change)

113

5.7 Correlation Matrix 117

List of Figures

Figure2.1 Per capita NSDP at Constant Prices (Rs.) 13

2.2 Sectoral Composition of GSDP in Uttarakhand (2002-14) at 2004-05 Prices

14

2.3 Per capita NDDP, 2012-13 (at 2004-05 prices), (Rs. ‘00) 152.4 % SC/ST Population, 2011 192.5 District-wise Age Composition of Population, 2011 202.6 Literacy Rates (%), 2011 202.7 Literacy Rates, 2011 242.8 District-wise Literacy Rates, 2011 242.9 Percentage of Persons with Secondary and above Education among

Youth (15-29 yrs), 201127

3.1 Incidence of Poverty (%) across Social Groups: Rural Uttarakhand 613.2 Incidence of Poverty (%) across Social Groups: Urban Uttarakhand 624.1 Mean Levels of Living across Rural and Urban Districts:

Uttarakhand76

4.2 Extent of Inequality across Districts: Uttarakhand (2011/12) 834.3 Incidence of Poverty across Districts: Uttarakhand (2011/12) 854.4 Spatial Cost of Living Indices across Districts: Uttarakhand

(2011/12)87

5.1 % share of Workers in Population, 2011 995.2 District-wise WPRs (%) 1005.3 Workforce Participation Rates, 2011-12 1015.4 Sctoral Composition of Employment, 2011-12 (%) 1045.5a Nature of Employment, 2011-12--Rural 1075.5b Nature of Employment, 2011-12--Urban 1075.6 Nature of Employment across Social Group of Workers in

Uttarakhand, 2011-12108

5.7 % Rural Households with Salaried Workers, 2011 1105.8 Relative Index of Productivity of Foodgrains per hectare, 2014-15 112

ABBREVIATIONS

BPL Below Poverty Line

CSO Central Statistical Office

DES Directorate of Economics and Statistics

GoI Government of India

GoUK Government of Uttarakhand

GSDP Gross State Domestic Product

IC Inclusive Coefficient

ICIMOD International Centre for Integrated Mountain Development

ICP Inclusive Coefficient in a Plural Society

MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act

MPCE Monthly per Capita Consumer Expenditure

NDDP Net District Domestic Product

NFHS National Family & Health Survey

NLM National Livelihood Mission

NSSO National Sample Survey Organisation

OBCs Other Backward Classes

OSGs Other Social Groups

PLBs Poverty Level Baskets

SAS Small Area Statistics

SCs Scheduled Castes

SEC Sixth Economic Census

SECC Socio-Economic Caste Census

SGSY Swarnjayanti Gram SwarojgarYojana

STs Scheduled Tribes

ToR Terms of Reference

WPR Work Participation Rate

1

Chapter - I

INTRODUCTION

I. THE CONTEXT

Measurement of poverty and its elimination has been a core strategy of the

development planning process in India since its First Five Year Plan. Household surveys for

consumption expenditure have been the main instruments of poverty measurement. The

debate on methodological issues for measurement of poverty has passed through many

critical stages. The first systematic attempt to measure poverty began in India after the

recommendations of Planning Commission Expert Committee under the chairmanship of Prof.

Y. K. Alagh in 1979. The Committee set the rural and urban poverty lines at Rs. 49.09 and Rs.

56.64 per capita per month at 1973-74 prices, respectively (Planning Commission, 2009).

These lines were based on the assumption of different calorie requirements and related

poverty level baskets (PLBs) for rural and urban consumption. Subsequently, the Lakdawala

methodology of the estimation of poverty lines formed the basis of poverty estimates

nationally and across states until 2004-05. The Planning Commission appointed another

committee to look into the matter under the chairmanship of Prof. Suresh Tendulkar,

popularly known as Tendulkar Committee in December 2005. The Tendulkar Committee

recommended the adoption of the consumption basket underlying the Alagh-Lakdawala

national urban poverty line in 2004-05 as the PLB and aligned it with the national rural

poverty line by using an appropriate price index. In this way the rural and urban poverty lines

got fully aligned around a common PLB. Such change led to an upward adjustment of the

national rural poverty line and correspondingly the national rural poverty estimate. The

Tendulkar Committee estimates also invited public uproar over poverty estimates that led the

Planning Commission to appoint yet another committee under the chairmanship of Professor

C. Rangarajan to estimate poverty. The Rangarajan Committee submitted its report in June

2014. It recommended separate consumption baskets for rural and urban areas which include

food items that ensure recommended calorie, protein and fat intake, and non-food items like

clothing, education, health, housing and transport. The Rangarajan Committee once again de-

linked the rural and urban poverty lines. Based on its methodology, the Rangarajan

2

Committee raised the Tendulkar national rural poverty line from Rs. 816 per-capita per

month at 2011-12 prices to Rs. 972 and that of the national urban poverty line up from Rs.

1000 per capita per month at 2011-12 prices to Rs. 1407 (Planning Commission, 2014).

As is well known, poverty estimates are based on monthly per capita expenditure data

collected systematically by NSSO in its quinquennial surveys on consumption expenditure

since 1972-73. The sample size allows one to estimate poverty at state level, separately for

rural and urban areas, and at NSSO region level with certain degree of confidence. The

sample size does not allow estimation of poverty at district and sub-district level. Thus, due

to the lack of district level poverty estimates based on NSSO consumption expenditure, the

state governments are handicapped in directing their welfare and development programmes to

eradicate poverty at household and area levels.

II. WHY IS POVERTY ESTIMATION REQUIRED?

A recent (March 2016) document of NITI Ayog underscores the importance of measuring

poverty due to the following three mainreasons:

a. Identification of the poor through a comparison of the poverty line with household (or

individual) expenditure;

b. Tracking poverty in a region over time and comparing it across regions at a point in

time; and

c. Estimation of the required expenditure on anti-poverty programmes and their

allocation across regions.

The present method of poverty estimation only helps in assessing the number of poor and

the progress made in poverty reduction at the national and state levels over a period of time

based on poverty level basket (PLB) of household per capita consumption expenditure. It

becomes rather irrelevant for household level interventions for poverty redressal. For this

state governments have been using a variety of alternative criteria to identify below poverty

line (BPL) households through periodic censuses of households. The Socio-economic Caste

Census 2011 (SECC-2011) is expected to be one of the leading sources of data for

identification of poor households and helping them under various welfare schemes of central

and state governments. However, such censuses cannot be undertaken on quinquennial basis

3

due to time and costs. These, however, can be made the basis for government interventions

towards the well-being of households only for few years butcertainly not for a long period of

one decade. This makes the job of policy makers all the more difficult in addressing the

question of poverty due to lack of an authentic database on a yearly or biannual basis. The

periodic NSSO surveys on consumption expenditure with relatively larger sample size

sufficient for capturing patterns at disaggregated levels, say at district/zonal level can bridge

the gap between poverty estimation and related resource allocations. However, there are

many issues related to sample size and its adequacy to capture regional and social diversities,

poverty estimation procedures and resource allocation for eradication of poverty.

III. APPROACHES OF ESTIMATION OF POVERTY AT DISTRICT LEVEL

1. Calculating poverty on pooled sample by using Tendulkar Committee Method

With the initiatives of Central Statistical Office (CSO), Government of India, various state

governments have started compilation and pooling of both central and state samples of NSSO

rounds on consumption expenditure (Schedule 1.0) and employment and unemployment

(Schedule 10.0). With the help of pooled samples it is possible to make a robust estimation at

a more disaggregated level, such as regional or district levels. The Department of Statistics,

Government of Uttarakhand has pooled the census and state sample data of NSSO for 68th

Round (2011-12). Keeping in view the available methods of poverty estimation, we have

estimated district-wise poverty in Uttarakhand by broadly following the Tendulkar

Committee approach. However, we can also provide alternative estimates of poverty by using

the method of latest Rangarajan Committee (2014). This would require a reasonably larger

sample size of households in each district of Uttarakhand. Experts have argued that for a

large number of districts in the country it is possible to make district level poverty estimates

(Sastry, 2003). The NSSO’s central sample size for Uttarakhand in its 68thRound on

Household Consumption Expenditure was 1048 households in rural areas and 736 households

in urban areas of the state. The state sample size was almost similar to the central sample size.

Thus, double sample size definitely helps in estimation of poverty and its reliability at least at

the district level. The details of district-wise sample size of 68th NSSO Round (central, state

and pooled) are given in Chapter 5 on district-wise estimation of poverty.

4

One of the major limitations of the Tendulkar Committee method, particularly in the

context of hill areas, is that by taking urban poverty line basket of household per capita

consumption to estimate poverty in rural areas, it fails to capture the high cost of living for

rural population in hill areas (Papola, 2002).

2. Calculating poverty by using Tendulkar Committee approach through smallarea estimation approach

Small area typically refers to the part of a population for which reliable statistics of interest

cannot be produced due to small sample sizes. Demands for reliable small area statistics

(SAS) are increasing with growing governments’concerns over issues relating to distribution,

equity and disparity. One can apply this (Tendulkar Committee) method also for obtaining

district level poverty estimates for area level models and provide the estimation procedure,

along with the method of obtaining the estimates of Mean Square Error (MSEs) of estimated

parameters. However, such methods suffer from several limitations and are generally not

helpful in implementing poverty alleviation programmes at household and sub-regional levels

within a district.

3. Calculating multidimensional poverty by using Socio-economic Caste Censusdata

The estimation of poverty based on calorie intake and then converting it into monetary value

has been criticised for its inadequacy in capturing various forms of drudgeries, vulnerabilities

of livelihoods and higher cost of living in mountain areas (Papola, 2002). For example, while

using urban consumption expenditure basket for estimation of rural poverty by Tendulkar

Committee, the estimates of percentage of poor in rural areas of Uttarakhand turned out to be

substantially low at 32.2 per cent during the year 2004-05 as compared to earlier estimates by

the Planning Commission using Lakdawala method (39.6 per cent). This was mainly due to

the fact that cost of living in rural as well as urban areas in hill regions is comparatively much

higher than in plain urban areas. Due to lack of price adjustment for cost of living separately

for hill areas, poverty levels generally come down, and, thus could provide misleading

conclusions.

It is now a well established fact that poverty is largely multi-dimensional in its nature

(Radhakrishna et. al., 2010; Alkrine, 2009, Papola, 2002). Apart from low levels of

consumption (calorie intake), a household may face severe deprivations in terms of

5

ownership of productive assets, availability and quality of employment, education, health,

communication, accessibility to facilities and geographic conditions. A sizeable number of

households in mountain areas including Uttarakhand suffer from such deprivations, more so

in hill regions (Papola, 2002). The estimates of multi-dimensional poverty could provide

useful insights on poverty in Uttarakhand.

4. Limitations of consumption-based approach of estimation of poverty inmountain areas

Calorie intake based poverty estimates are generally criticized for their limitations to capture

various forms of poverty, particularly in the context of hill/mountain regions. It is well known

that for populations living in mountain areas it is absolutely necessary to have a higher

minimum energy and calorie intake apart from requirement of minimum clothing, including

warm clothing and permanent shelter, to protect themselves from the extremities of weather

and climate as compared to those living in plain areas (Papola, 2002). For example, energy

requirement for traveling a distance of one km in hill areas is far more than in plain areas.

Thus, the use of common consumption norms to measure the well-being of people along

these parameters generally places many people in hills/mountains above the poverty line even

without fulfilling their basic needs (Papola, 2002). Papola (2002) shows how a poverty line

taking into account (i) higher energy/calorie intake, (ii) greater non-food needs such

asclothing and shelter for survival, and (iii) higher prices prevalent in mountain areas, jumps

up by about 70 per cent compared to plain areas. The poverty ratios based on state price index

are alsoproblematic as they do not capture the local cost of living, particularly in hill areas.

This is simply associated with the high cost of transportation of goods and services to

mountain areas as compared to plain areas.

Calculation of poverty based on multidimensional approach too is not free from its

limitations. It ignores the quality of productive assets such as land. Although landlessness is

not a major issue in hill areas such as in Uttarakhand, yet the quality of land differs in terms

of its size and spread. More than one-tenth of land holdings in the hill districts of

Uttarakhand are less than 0.25 hectare size, which could be termed almost landless; another

half of the land holdings are between 0.25 to 0.5 hectare sizes (Mamgain, 2004). Similarly,

the productivity of agricultural land is abysmally low (less than half) in hill areasas compared

to plain areas (Mamgain, 2004). Thus, the condition of most people engaged in agriculture in

6

the hill districts is not much different than those working as agricultural labour in the plain

districts.

Malnutrition is generally high among population residing in hill areas as compared to

those living in plain areas. Hilly terrain imposes an additional burden on people’s health and

nutrition, and aggravates the problem of under-nutrition (ICIMOD, 2016). A study by

International Centre for Integrated Mountain Development (ICIMOD) (2016) estimated

lower calorie intake among hill population in the north-eastern region of India (for rural areas

2,098 kcal/day per capita in hill areas vs. national rural average of 2,147 kcal/ day; for urban

areas 2092 vs. 2123, respectively). Using the child malnutrition parameterfor estimation of

poverty inIndian states, Radhakrishna et.al., (2010) show a jump in the percentage of poor

households to over 71 per cent in rural areas and 48 per cent in urban areas of Uttarakhand

during the year 2004-05. These ratios are very high as compared to Himachal Pradesh (57.7

per cent for rural areas and 30.7 per cent in rural areas) but marginally lower than national

average. However, the nutritional norm of poverty measurement is not free from criticism. It

is argued how per capita calorie intake among richer sections of population has been

decreasing and that for poor sections improving over the years though not substantially, both

in rural and urban areas. This requires a broader approach as calorie norm may no longer be

relevant nowadays for defining the minimum subsistence (Suryanarayana, 2010).

In brief, poverty is a multidimensional phenomenon that goes beyond inadequate

income to include deprivation of basic human capability including education, health and

living standards (Alkire, and Robles, 2015). In recent years asound body of literature has

emerged in estimating poverty by using the multidimensional approach (see Alkire and

Foster, 2011). Calculation of multidimensional poverty requires comprehensive data about

households on their economic, social, and regional dimensions. However, availability of such

detailed data and that too on reasonably short intervals at a more disaggregated level such as

district-wise orCD Block-wise, is a major concern while making poverty estimates.

Nonetheless, poverty estimates, as mentioned earlier, are very useful to understand the

progress of an economy and society and act as a guiding principle in resource allocations and

interventions.

7

IV. POLICY INITIATIVES1

Towards accelerating balanced regional development in the country, development of hill

areas has been a policy priority in the national planning process since long. For the first time,

a Special Hill Area Development Programme for the development of hill regions in the

country was initiated in the Sixth Plan period and it has since continued in subsequent plans.

Uttarakhand was accorded a special category status in 2002 by the Planning Commission.

The state government undertook several policy measures and programmes for the

development of Uttarakhand. Some of the state government’s initiatives are critically

examined in the following sections.

Under its industrial policy, the state government provided several incentives in the

form of tax concessions, concessional finance, industrial plots and other basic infrastructure

to attract industries. These measures led to tremendous progress in industrial development in

Uttarakhand albeit in the plains. The number of industries registered under the Factories

Sector Act increased by over seven times from 698 in 2001-02 to 2843 in 2011-12.

Employment in these factories jumped 8.4 times from 40880 to 342385 during this period

(CSO, ASI data).

Unfortunately, the industrial development policy of the state remained skewed

infavour of plain areas. Since the industrial policy could hardly benefit hill areas in terms of

attracting industries therein, a separate Hill Industrial Development Policy was announced in

2008 to attract industries to the hill districts. However, this policy remained anon-starter till

2011, when Government of Uttarakhand amended the 2008 policy and extended special

incentives like upto 90 per cent tax rebate, transport subsidy and rebate on power tariff till

2025. It also decided to set up 11 industrial hubs at district headquarters in hilly districts.

Notwithstandinginitial hiccups, the policy picked up momentum and began attracting

industries and investment in the state though not on the desired scale. The policy also

facilitated creation of over 3000 small (mainly micro) units and provided employment for

over 10500 people. MSMEs were mainly created in the herbal, floriculture, flour mills,

1 This section draws on Mamgain and Reddy, 2016.

8

handlooms, mineral water, pharmaceuticals, auto repair and steel fabrication. Between April

2012 and November 2013, 763 new units were set up, attracting investments of USD 11.6

million employing a total of 2,690 people (India Brand Equity Foundation, 2014). There are

several issues related to creation of quality infrastructure such as roads, industrial plots,

buildings and power supply which still need to be addressed.

The state government’s Veer Chandra Singh Garhwali Paryatan Swarozgar Yojana

(Veer Garhwali Tourism self-employment scheme) for promoting tourism related enterprise

development is a credit-cum-subsidy scheme under which assistance is given for fast food

centres, setting up of retail outlets for local handicrafts, transport, motels, hotels, equipment

for adventure sports, setting up of tourist information centres with PCs, restaurants, and so on.

However, the potential of tourism and other related activities has yet to be harnessed fully for

creation of employment and income in the hill districts of Uttarakhand. At present, most of

the tourism is religious in nature, and itwas severely affected due to the disaster in Kedar

valley in June 2013. There are several places and locations in hill districts which are yet to be

explored and developed fully for attracting tourist inflows into the region. There isserious

lack of quality road connectivity, suitable accommodation, drinking water and trained human

resources. Little is known about state-sponsored skill development initiatives, particularly in

the rural areas of the state.

The experience of implementation of public employment programmes, namely,

Mahatma Gandhi National Rural Employment Guarantee Programme (MGNREGA) has been

amixed one. Though employment was provided to almost all demanding households, it could

provide only about 41 days of employment as against the guarantee of 100 days. In hill

region, about half of employment generated was performed by women, whereas in plain

region, the share of women was less than 23 per cent. Also, the implementation of MNREGA

in Uttarakhand has been criticized by villagers due to irregular availability of work and

delays in payment of wages.

The experience of Swarnjayanti Gram SwarojgarYojana (SGSY) or Golden Jubilee

village self-employment scheme, and its recent format, National Livelihood Mission (also

9

called Aajivika Mission) in creation of self-employment has also been a mixed one. The State

Rural Livelihood Mission was started with the primary objective of reducing poverty by

enabling poor households to access gainful self-employment and skilled wage employment

opportunities, resulting in appreciable improvement in their livelihoods on a sustainable basis,

through building strong grassroots institutions for the poor.

However, there has been very little visible progress towards improving livelihoods,

particularly in hill districts of the state, despite the existence of several development

programmes aimed at improving income and reducing poverty and vulnerability. Mamgain

and Reddy (2016) show how in their sample villages there was hardly any evidence of use of

better farming practices in crop production, horticulture, poultry, dairy and fishery production.

This is mainly due to lack of agricultural extension services available to villagers to improve

their farm practices and productivity. Hardly any upscaling efforts are being made to improve

farming practices and small enterprise development in a large part of Hill Region. This has

resulted in an ever-increasing exodus from hill areas of Uttarakhand in recent years.

V. OBJECTIVES OF THE STUDY

Keeping in view the Terms of Reference (ToR) of Department of Economics and Statistics

(DES), Government of Uttarakhand, the present study aims to generate district-wise poverty

estimates, separately for rural and urban areas for Uttarakhand. It also aims to provide

poverty estimates for various social groups across hill and plain areas in the state. The study

also makes a critical analysis of poverty and inequality and offers few suggestions. Given the

constraints of access to other data sources, such as SECC and NFHS-4, the present exercise

of poverty estimation is largely based on NSSO 68th round pooled data on consumption

expenditure for Uttarakhand for the year 2011-12.

VI. CHAPTER PLAN

Apart from the introductory chapter, an overview of the Uttarakhand economy is presented in

Chapter II. It brings out significant regional disparities in various development indicators,

particularly in the context of hill and plain areas of the state. Chapter III provides measures

of absolute deprivation and inequality at the macro, sectoral and district levels. It deals with

10

the extent of inclusion of different social groups with reference to robust measures of average

and extent of deprivation among them. Chapter IV gives the estimates of district-wise poverty

and inequality based on the pooled data of central and state samples of NSSO 68th Round

Consumption Expenditure Survey data for the year 2011-12. Chapter V analyses the nature

and quality of employment in Uttarakhand and related income inequalities. It argues that due

to poor quality of employment, most households resort to long duration migration which is

not making any significant multiplier impact on the local economy, particularly in source

areas (hill districts). The last Chapter VI provides summary and conclusions and related

policy implications.

11

Chapter - II

UTTARAKHAND ECONOMY: AN OVERVIEW2

I. INTRODUCTION

Increase in income inequalities is a distinct feature of economic growth in India and its

regions over the last six decades of its development planning (Planning Commission, 2013).

The persistence of such inequalities is largely attributable to the slow pace of development of

basic economic and social infrastructure across several regions and unequal access to income

opportunities. This has fuelled demands for smaller states from time to time. The arguments

in support of small states were linked to better governance and resulting economic efficiency

in the use of state resources leading to improved income opportunities. The genesis of

Uttarakhand on November 9, 2000,as a new state of the Indian Union from Uttar Pradesh is

also largely linked with the economic backwardness of the region. The major aspirations of

common people from the new state included, among others, creation of better employment

opportunities to arrest the existing large scale out-migration of able-bodied youth, mainly

educated males, from the Hill Regions3 of Uttarakhand. Other expectations included

improved access to infrastructure facilities such as electricity, road, telecommunications,

health, education, and better governance to lead to better living conditions for the peopleofthe

state in general and in hill districts in particular (Mamgain, 2004).

The development experience of Uttarakhand over nearly one and half decade with

respect to achieving high economic growth and reduction in the poverty has been quite

encouraging. However, the economic growth is mainly centred in the three plainsdistricts

while the ten hill districts remain far behind in this increasing economic prosperity (GoUK,

2013-14Annual Plan). Most of the economic opportunities have tended to concentrate in

plain areas of the state. As a result, the population in Hill Region of the state has yet to

struggle hard for eking out livelihoods largely from agriculture by involving large numbers of

their household into the labour force (Mamgain, 2004). Consequently, the pace of out-

2 This chapter draws substantively from Mamgain and Reddy (2016). The first author is one of the authors ofthis report.

3Ten districts with hilly terrain namely, Almora, Bageshwar, Chamoli, Champawat, Nainital, Pithoragarh, PauriGarhwal, Rudraprayag, Tehri Garhwal and Uttarkashi are referred as Hill Region. the remaining three districts,namely, Dehradun, Hardwar and Udham Singh Nagar are in the plain areas of Uttarakhand.

12

migration could not slow down from the hill districts; rather it has accelerated during the

recent years, as reflected in Population Census 2011. A very slow growth of population in

most of the hill districts, and an absolute decline of 17,868 persons in the population of

Almora and Pauri Garhwal districts between 2001 and 2011 is a testimony of huge out-

migration (Mamgain and Reddy, 2016). Historically, these districts have had well developed

social indicators in comparison to many other districts. The extent of out-migration has been

so huge that many villages are left with single-digit populations in 2011. In brief, there are

significant regional inequalities in Uttarakhand, which have perpetuated over the years.

In this chapter we present a brief overview of Uttarakhand economy with special

focus on regional growth and inequalities on select indicators of development. After the brief

introduction, Section II portrays growth and structure of income and regional inequalities in

Uttarakhand. The demographic features and changes therein are analysedin Section III with a

concern on distress-driven out-migration due to lack of opportunities for economic and social

development in the ten hill districts. In Sections V and VI we examine the social progress in

education, health and basic amenities in the state. The last Section VII sums up the major

points emerging from our analysis.

II. GROWTH AND REGIONAL INEQUALITIES

In this section we have analysed the pattern and structure of economic growth and regional

inequalities in Uttarakhand to understand the dynamics of growth, employment and poverty.

Since its formation, Uttarakhand has witnessed an impressive growth of over 9 per cent in its

gross state domestic product (GSDP) during the period 2001-02 to 2011-12 (at 2004-05

prices). As a result, real per capita income of the state almost increased 4.5 times from Rs.

19,164 in 2001-02 to Rs. 92,911 in 2011-12. The per capita income in Uttarakhand has

bypassed the national level income since 2005-06 onwards and that in Himachal Pradesh,

since 2008-2009. The per capita income in Uttarakhand is more than three times that of its

parent state, Uttar Pradesh (Fig. 2.1) (Mamgain and Reddy, 2016).This progress definitely

justifies the argument of formation of smaller states like Uttarakhand for faster development.

13

Note:For years 2000-2001 to 2004-2005, at 1999-2000 prices; for the period 2004-05 to 2011-12, at 2004-2005prices; for the period 2011-12 to 2015-16, at 2011-12 prices.

Source:Calculated from CSO Data.

A look into the composition of the economic growth of the state shows that it is largely

contributed by a rapid growth of GSDP in secondary and tertiary sectors. However, in recent

years the growth of secondary sector hovered around 12 per cent and that of services sector at

around 8 to 9 per cent. Growth in agriculture sector was low yet fluctuated over the years. As

a result, the structure of GSDP has changed considerably in the state. The share of

agriculture in GSDP declined substantially by about 17 percentage points-- from 27 per cent

in 2000-01 to 9.8 per cent in 2013-14. The corresponding increase of about 17 percentage

points was in the share of secondary sector and another 10 percentage points in case of

service sector (Figure 2.2). The credit for this impressive growth largely goes to the Industrial

Policy of Uttarakhand which provided several incentives to attract private industries in the

state.

14

Fig. 2.2: Sectoral Composition % of GSDP in Uttarakhand (2002-14) at 2004-05 Prices

Source: Authors’ calculation based on CSO Data.

Regional Disparities in Per Capita Income

The impressive economic growth in Uttarakhand has been unevenly distributed across its

districts. Income inequalities across the hill and plain districts are revealing:For example, per

capita income (measured in terms of per capita net district domestic product) in Uttarkashi

district is about 2.5 times less than that in Dehradun and Udham Singh Nagardistricts (Figure

2.3). All the hill districts except Nainital have per capita district domestic product much less

than the state average. Surprisingly, Rudraprayag district, well known for its tourism, also has

low income. One of the explanations for it could that income from services is not generally

reflected in the district domestic product figures. Reasons for such income inequality could

be easily explained with the pattern of enterprise development in Uttarakhand. According to

the Sixth Economic Census, 2013, 41.7 per cent of income generating enterprises (excluding

crop production, plantation, defence and compulsory social security activities) are located in

three plains districts, whereas the population in hill districts is mainly dependent on

15

agriculture and allied activities and that too largely as subsistence with abysmally low levels

of productivity (Mamgain, 2004).

Fig. 2.3: Per capita Net District Domestic Product, 2012-13 (at 2004-05 prices)(Rs. ‘00)

Source: Directorate of Economics and Statistics, Government of Uttarakhand.

The Socio-economic Caste Census-2011 data throws up an interesting picture about

the monthly income of a highest earning member of a household in rural areas. Though such

income data suffer with the limitations of under-reporting and intensive probe on the part of

surveyors, however it brings out interesting patterns of income distribution of highest earning

members among rural households. The data show a highest 80 per cent of rural households in

Uttarakashi having less than Rs. 5000 monthly income of their highest earning members.

Other districts with such low income of rural households are Almora, Champawat and Tehri

Garhwal. The lowest proportion of such rural households was in Dehradun and Rudraprayag

districts. While Dehradun district has the advantage of urbanization as well as tourism,

Rudraprayag district has the advantage of tourism. As compared to India, the proportion of

low earning member households is significantly lower in Uttarakhand (Table 2.1). Similarly,

the proportion of rural households with a highest monthly income range of more than Rs.

10,000 was almost double in Uttarakhand as compared to the national average. The

proportion of such high income rural households significantly varies across districts of the

state with Dehradun on the top (27 per cent) and Tehri Garhwal at the bottom (9.6 per cent).

Such variations in monthly income of highest earning members in rural households can partly

be explained with the relatively higher proportion of rural population in salaried jobs in

16

districts having higher proportion of middle and high income range households. The

variations in the range of monthly household income across districts also indicate the

limitations of per capita income based on district domestic product.

Table 2.1: Distribution of Rural Households by Monthly Income ofHighest Earning Member (Rs.)

District Less than Rs. 5,000 Between Rs. 5,000and Rs 10,000

Rs. 10,000 or more

Uttarkashi 80.10 9.05 10.84

Chamoli 60.07 24.21 15.72

Rudraprayag 53.74 31.32 14.94

Tehri Garhwal 70.94 19.47 9.59

Dehradun 48.95 23.95 27.10

Pauri Garhwal 59.17 23.87 16.96

Pithoragarh 62.83 19.78 17.39

Bageshwar 66.37 20.99 12.64

Almora 73.30 16.24 10.47

Champawat 73.12 14.03 12.85

Nainital 61.78 20.90 17.31

Udham Singh Nagar 65.02 22.24 12.74

Hardwar 62.56 27.00 10.44

State Total 63.41 21.86 14.72

All India 74.52 17.18 8.25

Source: Socio-economic Caste Census, 2011.

Incidence of Poverty

The incidence of poverty declined significantly in Uttarakhand along with its high economic

growth. The percentage of poor population in the state decreased to 11.3 per cent in 2011-12

from 31.8 per cent in 2004-05 (Planning Commission, 2007, 2014).This could be possible

due to improved distribution of food grains through public distribution system in the state and

partly due to improved incomes of rural households through public employment programmes.

The state has definitely performed well in poverty reduction as compared to its parent state,

17

Uttar Pradesh (see Table 3.8 in chapter III. Poverty and inequality are analysed in details in

Chapters III and IV).

III. DEMOGRAPHIC CHANGES IN UTTARAKHAND

Population Growth

With a population of 10.09 million in 2011, Uttarakhand ranked at 20th position among Indian

states. Nearly 70 per cent of the state’spopulation lives in its rural areas. About 48.4 per cent

of the population resides in ten hill districts (generally referred as Hill Region). Thus, more

than half of the state’s population resides in the remaining three districts of Hardwar,

Dehradun and Udham Singh Nagar (Table 2.2) The state has witnessed significant changes in

its demographic structure, particularly during the decade of 2001-2011—a period of high

economic growth. It has registered a moderate growth in its population (1.74 per cent per

annum) during the decade 2001-11, which is comparatively higher than the national average.

However, the Hill Regionwitnessed much lower growth in population (0.70 per cent) as

compared to plains districts (2.74 per cent). Much of this growth in population in plains

districts is contributed by migration from hill districts and also from the neighbouring Uttar

Pradesh. In fact, there has been an absolute decline in population in two districts -- Almora

and Pauri Garhwal during the period 2001-2011 (registering a negative compound annual

growth of -0.13 and -0.14 respectively). Other hill districts with very low population

growths are Tehri Garhwal, Bageshwar, Chamoli, Rudraprayag and Pithoragarh. Population

growth of over 2.27 per cent in Nainital district is largely centeredaround the Haldwani area,

falling in the plain areas of the district. Overall, the share of Hill Regionin the population of

Uttarakhand has declined substantially by about five percentage points between 2001 and

2011 (Mamgain and Reddy, 2016). While population in Hill Region predominantly resides in

rural areas, a sizeable 42 per cent of population in three plain districts of the state resides in

urban areas. In other words, these three districts have emerged as predominant centres of

economic activities in Uttarakhand.

There has been a notable change in the social composition of population across the

hills and plain regions of the state. SCs and STs constitute over 21.6 per cent of total

population of Uttarakhand (Table 2.2). The share of SCs in the population of the state has

increased from 17.8 per cent in 2001 to 18.7 per cent in 2011. The opposite is true in case of

STs. The proportion of SC population is comparatively more in hill region which increased

18

by almost one percentage point over 2001. The opposite is true for STs, whose share in hill

region population declined substantially during the decade 2001-2011 (Mamgain and Reddy,

2016). SC/STs are proportionately low in Uttarakhand as compared to national average and

much lower than the neighbouring Himachal Pradesh state (Fig. 2.4), implying lesser

magnitude of vulnerable population in the state.

Table 2.2: Select Demographic Features of Uttarakhand and India, 2011

Sl. No. Variable Uttarakhand IndiaHill areas Plain areas Total

1. Population (in million) 48.50 52.36 100.86 1210.862. 0-6 years population (%) 13.18 13.68 13.44 13.603. Population growth rate

(2001-2011)0.70 2.82 1.74 1.64

4. Sex ratio (all agegroups)

1037 900 963 943

5. Sex ratio (0-6 agegroup)

894 888 890 919

6. SC population (%) 20.91 16.78 18.76 16.67. ST population (%) 1.05 4.60 2.89 8.68. Muslim population (%) 3.80 23.35 13.95 14.239. Urban population (%) 17.06 42.43 30.23 31.210. Literacy Rate (%) 80.87 76.90 78.82 73.011. %Workers (main plus

marginal) in totalpopulation (WPR)

43.71 33.47 38.39 39.8

12. WPR- Male 48.32 50.84 49.67 53.3

13 WPR-Female 39.26 14.16 26.68 25.5

Source: Calculated from Primary Census Abstract, India and Uttarakhand, 2011.

The proportion of SCs, STs and Muslims varies substantially across the districts of

Uttarakhand. Over one-fourth of population in Bageshwar, Pithoragarh, Uttarkashi and

Almora belong to SCs. Udham Singh Nagar, Tehri Garhwal and Pauri Garhwal districts have

comparatively lesser proportion of SC population (Annexure Table 2.2). Thehighest

percentage of ST population is in Udham Singh Nagar district (7.46%) followed by Dehradun

(6.58%). Muslims constitute nearly 14 per cent of the total population in Uttarakhand. Their

share is highest (over 34 per cent) in Hardwar district and lowest (0.55) in Bageshwar district.

Muslim population is largely concentrated in the plain areas of the state. Together, the SC, ST

and Muslim population, is as high as 56 per cent of population in Hardwar district. In the

three plains districts, the three groups constitute 44.7 per cent of population. Evidence shows

a higher incidence of poverty among SCs and STs across the country (Thorat and Dube,

19

2013). It is also true in case of Uttarakhand and, it underlines the magnitude of vulnerability,

particularly in districts with higher proportion of such population. In other words, a huge

diversity in the socio-religious composition of population across various districts in

Uttarakhand has implications for poverty and welfare measuresbe undertaken by the

government in the state.

Note: UP=Uttar Pradesh, HP=Himachal Pradesh, UK=Uttarakhand.Source: Primary Census Abstract, 2011, Registrar General of India, New Delhi.

Age Composition and Dependency

The age-composition of the population varies across districts in Uttarakhand. Proportionately

children (0-14 years) are more in Uttarakashi, Champawat, Hardwar and Udham Singh Nagar

districts. The proportionof the aged population (above 60 years) is highest in Pauri Garhwal

and Almora districts (over 12 per cent). The share of aged population is comparatively higher

in hill region of the state. Nearly 60 per cent of the population is in the age-group 15-59 years

and itsproportion does not vary significantly across various districts except in Dehradun (63.7

per cent) (Figure 2.5, Annexure Table 2.3). However, the proportion is comparatively low in

hill districts as compared to plain districts. In other words, the higher proportion of children

and older population reflects the high dependency ratio requiring more resources to support

the dependent population.

20

Source:Census of India, 2011

Literacy Rate

With a literacy rate of over 78.8 per cent, Uttarakhand is much ahead of thenational

average (73 per cent). Literacy level of population in hill areas ismuch higher than in plain

areas of the state; however, such differences have significantly reduced over the last decade

with a faster improvement in literacy levels in the plains districts too. Gender-wise, literacy

level of females is lower than males both in hills and plains, but more so in plain areas (Fig.

2.6) (Annexure Table 2.4). However, the state still lags behindits neighbouring hill state,

Himachal Pradesh in literacy levels.

Source:Census of India, 2011.

21

Outmigration and its Magnitude

Over one-fourth of population in Uttarakhand was migrant population in 2011. It did not

include those who had migrated due to marriage. This ratio is quite high compared to the all-

India figure of about 19 per cent. Gender-wise, the incidence of migration, excludingmarriage

related, is high among males (nearly 28 per cent males are migrants) (Table 2.3). Empirical

studies show that out-migration (i.e. people moving away from a given region to other

regions for employment, education and better quality of life)is a widespread phenomenon in

Uttarakhand, particularly in the Hill Region, and more so in the previous decade, 2001-2011.

Table 2.3: Share of Migrant Population in Uttarakhand@

State/Region Persons Males Females

Uttarakhand

Total 24.8 27.8 20.9

Rural 21.9 26.4 17.4

Urban 25.4 29.6 21.4

India

Total 19.0 21.7 16.1

Rural 14.9 17.6 12.1

Urban 19.9 22.4 17.2

Note:@ Population Census defines migrants as those persons whose place of enumeration is different than theirplace of last residence. These migration figures exclude migration due to marriage. Among the total migrantpopulation about 42.6 per cent migrated due to marriage.

Source:Calculated from Population Census, 2011, D-5 series (provisional)

A net decline in population of Almora and Pauri Garhwal districts between 2001 and

2011, and a very slow growth of population in other hill districts is a testimony of

oumigration from hill areas of the state (Mamgain and Reddy, 2016). A maximum absolute

decline in population is witnessed in small villages, which inhibited a large share of

population. The magnitude is so huge and widespread that about 375 villages representing

2.75 per cent of total villages in the Hill Region stand almost abandoned as a result of out-

migration. These villages have nearly turned into “ghost villages” (Mamgain and Reddy,

2016). Although, there has been a history of high incidence of migration from Hill Region yet

a large number of migrants tended to return to their villages at a later period. This process of

return migration seems to have stopped now. A number of studies in the past show out-

22

migration as a widespread phenomenon among rural households in the Hill Region of

Uttarakhand (Bora, 1996; Mamgain, 2004; Mamgain and Reddy, 2016; Mehta, 2016). More

recently, Mamgain and Reddy (2015) show as high as 88 per cent of sample rural households

reporting at least one member migrating for employment from the villages in Pauri Garhwal

and Almora districts. Most of the migrants are educated young men belonging to higher

castes in the hill districts of Uttarakhand. The percentage of SCs is proportionately less

among migrants. This is mainly due to weak social networks of SCs at the place of

destination. However, their proportion among migrants has substantially increased in recent

years.

The reasons for migration excluding marriage largely include employment, education

and better quality of life. According to Population Census, 2011, nearly 40 per cent of male

population in Uttarakhand migrated for work and another 5.5 per cent for education. This

proportion is much higher than the national average (31.3 per cent) (RGI, 2017). As muchas

64 per cent of females and 33.3 per cent of males moved along with their households within

Uttarakhand, mainly to urban areas. This also reconfirms the findings of micro studies about

a large number of households moving out of the villages to urban areas of the state or other

parts of the country. Mehta (2016) has showedthat nearly three-fourths of migrants from the

hill districts have migrated outside Uttarakhand.

Yet another dimension pertains to complete outmigration of households from villages.

Mamgain and Reddy (2016) show how over half of the number of existing households in

their sample villages had permanently out-migrated over the last decade. One can see a

number of locked and depilated houses and barren parcels of erstwhile cultivated land in

several villages in the hill districts of Uttarakhand. Almost half of the Brahmin households

have out-migrated completely from their villages both in Pauri Garhwal and Almora districts.

The trend is much less among SC households, mainly due to their poor incomes.

The impact of migration on local economy and society has been significant. Most of

the migrants from hill region could get employment in low paid salaried jobs such as

domestic helps, security guards, peons, office attendants, etc. Remittances by them contribute

significantly (about 26 per cent) to migrant households’ incomes. These are particularly

crucial in poor and relatively low income group households,contributing nearly 50 per cent

and 38 per cent of household incomes in their native places. If we include the income from

pension, which of course is income largely from return migration, the household income rises

by nearly 40 per cent (Mamgain, et al. 2005). However, remittance income is largely spent on

23

daily consumption requirements. The other important heads under which remittance income

is spent include education and health. Since the average amount of remittances are small,

these are hardly able to generate any multiplier effect at the village economy level except

opening up of a few grocery shops to serve the consumer demand. Moreover, the consumer

items sold in such grocery shops are mostly procured from outside the hill region. Even

vegetables and milk and milk products, which were earlier available within villages, are

nowprocured from plain areas of the state. Thus, remittances used to finance such

consumption are again ploughed back to plain areas and areunable to create any multiplier

impact in the local village economy (Mamgain and Reddy, 2016).

IV. EDUCATION DEVELOPMENT IN UTTARAKHAND

Education is regarded as an important asset for the overall well-being of human beings. It

significantly contributes to the economic growth (Shultz, 1961). Dreze and Sen (1986) argue

that literacy is a basic tool of self-defence in a society where social interaction often involves

the written media. Similarly, education and social change are closely inter-linked

(Ramchandran, 1997). Education is also regarded as an important driver for attaining

inclusive development (Planning Commission, 2007). This section presents the educational

development of population in Uttarakhand from the perspective of its role in poverty

eradication and income generation.

Literacy Levels

Uttarakhand has made tremendous progress in improving literacy levels during the past five

decades. Literacy level in the state has jumped by more than four times from 18 per cent in

1961 to 78.8 per cent in 2011. The pace of improvement in literacy has been much faster in

the state than the all India average. In 1961, literacy rate in Uttarakhand was 18 per cent

compared to the all-India level of 28 per cent. This pattern has not only reversed butby 2011

the literacy rate in Uttarakhand stands six percentage points higher than the all India level.

However, literacy in the state is much lower than in Kerala and Himachal Pradesh at 82.8 per

cent, but ishigher than Uttar Pradesh (67.7) by 11 percentage points (Fig 2.7).

24

Source: Census of India, 2011

Region–wise, literacy rate in hill districts was higher by about six percentage points

than plains districts (Table 2.4). Such difference has narrowed substantially over the last

decade 2001-2011. District-wise, Dehradun ranks at top in literacy levelwhereas Udham

Singh Nagar has the lowest literacy level, lagging behind Dehradun by about 10 percentage

points. Gender gap in literacy rates is highest in Uttarkashi (26.4 percentage points), followed

by Tehri Garhwal, Champawat, Rudraprayag and Chamoli (Figure

2.8).

25

Table 2.4: Literacy Rate in Uttarakhand, 2011 (7 years and above population)

Region Person Male Female

Hill 80.9 91.6 70.8

Plain 76.9 83.8 69.2

Total 78.8 87.4 70.0

Source: Census of India, 2011

Educational Attainments of Working Age Population

With the expansion of educational facilities the educational levels of Uttarakhand population

has improved at a faster pace as compared to many Indian states, thereby placing it above the

national average on this indicator of development. We have specifically considered here the

15-59 age-group of population for explaining their educational attainments and regional

differences therein.

About one-fifth of working age population (15-59 yrs.) was illiterate in Uttarakhand in 2011.

A fairly high 43 per cent of population had had secondary and above level education (Table

2.5). Over 14 per cent of the working age population had graduate and abovelevel education.

As expected, the proportion of illiterate persons is much less among youth (15-29 yrs.)

population as compared to those in higher age-group 30-59 years. About half of the youth

population was educated as compared to nearly 36 per cent in the age-group 30-59 years. The

proportion of persons with technical diploma was low but more so in the age-group 30-59

years. This also shows a need for expanding access to diploma level education for improving

the employability of population in the state, particularly that of youth.

26

Table2.5: Educational Level of Population, 2011

Educational levelAge-group (yrs.)

15-29 30-59 15-59Illiterate 9.95 29.69 20.20Literate without educational level 1.48 2.15 1.83Below Primary 2.33 3.15 2.76Primary 12.87 14.73 13.83Middle 23.35 14.32 18.66Secondary 21.00 11.08 15.85Hr. Secondary 14.98 9.06 11.91Non-tech diploma 0.07 0.07 0.07Tech. diploma 0.69 0.41 0.55Graduate and above 13.13 15.14 14.18Unspecified 0.14 0.20 0.17Educated (Secondary and above) 49.88 35.76 42.55Source: Calculated fromPopulation Census-Uttarakhand, 2011

Let us look at the share of population with secondary and above education. This is

important as after secondary level education, vistas are open for various educational streams.

At this stage, education and its quality turns out to be a major determinant of occupational

diversification and earnings of an individual in the labour market (Mamgain, 2017). Viewed

from this perspective, about half of the youth population possessed secondary and above

education in 2011. However, there are sizeable differences of such human capital among

youth across the districts in Uttarakhand—ranging between the highest 63.3 per cent in Pauri

Garhwal to lowest 40 per cent in Hardwar. The other plains district, Udham Singh Nagar also

lags behind on this indicator by remaining second last in the ranking of districts (Fig 2.9).

The proportion of graduates and above ranged from a highest 20.3 per cent in Dehradun

tolowest 8.7 per cent in Bageshwar. There were only four districts-- Dehradun, Nainital,

Chamoli and Pauri Garhwal -- lying above the state average of graduates among youth.

27

Fig. 2.9: Percentage of Persons with Secondary and above Education among Youth(15-29 yrs), 2011

Source : Population Census-Uttarakhand, 2011

Access to Quality Education: A Big Challenge

Uttarakhand has witnessed a huge growth in the number of higher and technical educational

institutions in recent years. But such growth is concentrated in few areas. More so, the

anecdotal experience shows that access to such higher professional and technical education

institutions is extremely poor for students belonging to remote and less developed regions in

Uttarakhand.. Educational development in Uttarakhand, like any other state in India, is facing

thetough challenge of employability of its graduates (World Bank, 2011). There is a lack of

quality technical institutions such as ITIs for providing job oriented education at the lower

spectrum of skill training in the state. Thus, many students are forced to quit education in

desperation. Further, many of the trades being taught in these institutions have hardly any

market demand and region-specificity. This results in higher incidence of unemployment

among the graduates of these institutions (Mathur and Mamgain, 2004).

There is a great gap in the quality of school education in government schools and

private schools and between rural and urban areas. In many cases education in government

schools has become a subject of neglect. These schools are generally criticized for

deterioration in thequality of education. Many of the schools in remote areas face anacute

28

shortage of teaching resources. There is a rapid growth in private schools with most of them

providing quality education, particularly in the urban areas. This has created a big gap in the

output from these institutions and those run by government. Thus, the educational outcome

particularly from rural areas of the state is facing a big challenge in finding place in

competitive education and labour markets. As a result, many of the pass outs from these

institutions are turning into lowly educated and trained individuals landing in low paid

occupations.

In brief, apart from achieving 100 per cent literacy levels, Uttarakhand requires a

massive expansion of its educational infrastructure for skill development so as to prepare its

population for future skill demands. Since the state has a comparative advantage in terms

higher educational levels of its youth, it would require lesser efforts to harness this advantage.

V. HEALTH AND BASIC AMENITIES

Health is one of the important dimensions of human well-being and measuring

multidimensional poverty as well. It is well documented how poor health of household

members perpetuates poverty, especially when they have to bear the burden of their health

care due to lack of public health facilities (Sen and Dreze, 2013; Krishna, 2010) The

condition of Uttarakhand on select health indicators is mixed when compared with

neighbouring Himachal Pradesh and Uttar Pradesh, and India. For example, total fertility rate

and infant mortality rate in the state are almost similar to the national average but quite higher

than Himachal Pradesh. With regards to institutional births irrespective of public or private

facility, Uttarakhand and Uttar Pradesh are at similar stage (about 68 per cent), which is

much behind Himachal Pradesh and national average at 76.7 per cent and 78.9 per cent

respectively (Table 2.6). As regards child health, the position of Uttarakhand is

comparatively better than national average but substantially behind Himachal Pradesh. More

worrisome is the high percentage of severely wasted children (weight-for-height) in

Uttarakhand (9 per cent) as compared to Uttar Pradesh, necessitating targeted interventions

on a larger and wider scale. Nonetheless, Uttarakhand has made significant progress in terms

of access to improved drinking water and sanitation facilities.

29

Table 2.6: Select Indicators of Health, 2015-16

Indicator Uttarakhand HimachalPradesh

UttarPradesh India

Total fertility rate (children perwoman) 2.1 1.9 2.7 2.2

Infant mortality rate (IMR) 40 34 64 41Under-five mortality rate (U5MR) 47 38 78 50Mothers who had full antenatal care(%) 11.5 36.9 5.9 21.0

Institutional births (%) 68.6 76.4 67.8 78.9Institutional births in public facility(%) 43.8 61.6 44.5 52.1

Children age 12-23 months fullyimmunized (BCG, measles, and 3doses each of polio and DPT) (%)

57.7 69.5 51.1 62.0

Children under 5 years who arestunted (height-for-age) (%) 33.5 26.3 46.3 38.4

Children under 5 years who are wasted(weight-for-height) (%) 19.5 13.7 17.9 21.2

Children under 5 years who areseverely wasted (weight-for-height)(%)

9.0 3.9 6.0 7.5

Children under 5 years who areunderweight (weight-for-age) (%) 26.6 21.2 39.5 35.7

Households with an improveddrinking-water source (%) 92.9 94.9 96.4 89.9

Households using improved sanitationfacility (%) 64.5 70.7 35.0 48.4

Source: NFHS-4 (2015-16).

District-wise, there are significant regional disparities in the health indicators in

Uttarakhand. For example, the percentage share of institutional births in the state ranges

between a highest 83.7 per cent in Dehradun and the lowest 53.3 per cent in Chamoli. This is

largely due to the relatively inadequate access to health facilities in remote hill areas.

Similarly, the proportion of wasted children under 5 years (weight-for-height) ranges

between a lowest of 9 per cent in Nainital and a highest 46 per cent in Tehri Garhwal. The

proportion of anemic women (15-49 years) was lowest in Pithoragarh (42.3 per cent) and

highest in Hardwar (55.3 per cent) during 2015-16 (NFHS-4). The high values of standard

deviation in case of malnutrition, institutional deliveries and sanitation speak about the

disparities across districts in the state. Surprisingly, Hardwar district lags much behind others

in most of the health development indicators despite having a fairly high per capita district

domestic product (Annexure Table 2.7). Access and availability of drinking water is a major

issue particularly in all hill districts. The micro studies show how lack of adequate drinking

30

water has perpetuated out-migration from many villages in hill districts (Mehta, 2016). This

again shows that high income level of a given economy generally is not sufficient condition

to eradicate multidimensional poverty.

VI. SUMMING UP

Uttarakhand has achieved remarkable progress in attaining high economic growth after its

formation in November 2000. The growth has been largely led by manufacturing sector and

also by the construction and services sector. However, growth is not evenly spread across

different regions of the state. Most of the hill districts severely lag behind the three plains

districts including Dehradun in economic development. Like in other parts of the country,

disparities in economic development have widened in Uttarakhand. This is also reflected in

various other development indicators such as education, health and basic amenities. Although

the situationin hill districts on educational development front is far better than two plains

districts of Hardwar and Udham Singh Nagar, yet there are hardly any employment

opportunities for the educated labour force in hill areas. As a result, most of the hilly districts

have experienced a huge out-migration of able-bodied population in search of livelihood.

Moreover, out-migration in terms of sending remittances has hardly made any multiplier

impact on the economy in source areas of migration. Such significant regional disparities in

development outcomes only reinforcethe need to understand poverty in Uttarakhand not

simply based on income/consumption approach but it should be analysed in its

multidimensional forms. Lastly, the general indicators of development used to assess

progress in mountain economies may sometimes lead to confusing interpretations. For

example, the availability of infrastructure per one lakh population would have little meaning

if it is not linked with the distance and altitude in the context of hills. This is because

travelling a distance of one kilometre would require altogether different time and energy in

hill and plain areas. Thus, the available data used for calculation of poverty in the contexts of

hill regions fall rather inadequate, and therefore need to be interpreted with utmost care.

31

Annexures

Annexure Table 2.1: District-wise Population in Uttarakhand

District

Population (in No.)

Share of Rural

population (%)

2001 2011 CAGR 2001 2011

Almora 630567 622506 -0.13 91.28 89.89

Bageshwar 249462 259898 0.41 97.19 96.54

Chamoli 370359 391605 0.56 86.49 84.69

Nainital 762909 954605 2.27 64.74 61.05

Champawat 224542 259648 1.46 84.89 85.00

Pauri Garhwal 697078 687271 -0.14 87.09 86.21

Pithoragarh 462289 483439 0.45 87.01 85.71

Rudraprayag 227439 242285 0.63 99.12 95.87

Tehri Garhwal 604747 618931 0.23 90.08 88.69

Uttarkashi 295013 330086 1.13 92.20 92.73

Hill region 4524405 4850274 0.70 85.63 83.27

Hardwar 762909 954605 2.27 69.18 63.33

Dehradun 1282143 1696694 2.84 47.04 44.49

U. S. Nagar 1235614 1648902 2.93 67.39 64.40

Plains region 3280666 4300201 2.74 61.46 57.56

Uttarakhand 8489349 10086292 1.74 74.33 69.77

Source:Primary Census Abstract, Population Census, 2001 and 2011.

32

Annexure Table 2.2: Proportion of SC/ST/Muslim Population in Uttarakhand, 2011

District %SC %ST %Muslims %SC/ST/Muslim

Uttarkashi 24.41 1.06 1.08 26.55

Chamoli 20.25 3.13 1.12 24.51

Rudraprayag 19.68 0.16 0.61 20.45

Tehri Garhwal 16.5 0.14 1.19 17.83

Dehradun 13.49 6.58 11.91 31.98

Pauri Garhwal 17.8 0.32 3.34 21.47

Pithoragarh 24.9 4.04 1.24 30.18

Bageshwar 27.73 0.76 0.55 29.04

Almora 24.26 0.21 1.25 25.71

Champawat 18.25 0.52 3.35 22.11

Nainital 20.03 0.79 12.65 33.46

Udham Singh Nagar 14.45 7.46 22.58 44.49

Hardwar 21.76 0.33 34.28 56.37

Hill region 20.91 1.05 3.80 25.76

Plain region 16.78 4.6 23.35 44.73

Uttarakhand 18.76 2.89 13.95 35.61

Source: Primary Census Abstract, Population Census of India, 2011.

33

Annexure Table 2.3: Age-wise Distribution of Population in Uttarakhand, 2011

District 0-14 15-29 30-59 60+ 15-59

Uttarkashi 33.1 28.2 29.9 8.7 58.14

Chamoli 30.7 27.9 31.4 9.9 59.37

Rudraprayag 31.4 27.2 30.2 11.2 57.40

Tehri Garhwal 32.4 27.1 29.8 10.7 56.98

Dehradun 27.3 29.8 33.9 9.1 63.68

Pauri Garhwal 29.3 26.1 31.9 12.7 58.05

Pithoragarh 30.1 26.5 32.5 10.9 59.00

Bageshwar 31.0 25.7 31.6 11.7 57.28

Almora 30.3 26.2 31.1 12.4 57.32

Champawat 33.4 27.0 30.5 9.1 57.52

Nainital 29.6 29.3 32.8 8.3 62.11

Udham Singh Nagar 32.7 30.5 29.8 7.0 60.30

Hardwar 33.6 30.2 28.9 7.3 59.08

Hill region 30.7 27.3 31.4 10.5 58.72

Plains region 31.3 30.2 30.8 7.8 60.95

Uttarakhand 31.0 28.8 31.1 9.1 59.88

Source: Primary Census Abstract, Population Census of India, 2011.

34

Annexure Table 2.4: District-wise Literacy Rates in Uttarakhand

District 2001 2011

Person Male Female Person Male Female

Almora 73.64 89.2 60.56 80.47 92.86 69.93

Bageshwar 71.29 87.65 56.98 80.01 92.33 69.03

Chamoli 75.43 89.66 61.63 82.65 93.4 72.32

Champawat 70.39 87.27 54.18 79.83 91.61 68.05

Nainital 63.75 73.83 52.01 73.43 81.04 64.79

Pauri Garhwal 77.49 90.91 65.7 82.02 92.71 72.6

Pithoragarh 75.95 90.06 62.59 82.25 92.75 72.29

Rudraprayag 73.65 89.81 59.57 81.3 93.9 70.35

Tehri Garhwal 66.73 85.33 49.42 76.36 89.76 64.28

Uttarkashi 65.71 83.6 46.69 75.81 88.79 62.35

Hardwar 78.36 86.32 69.55 83.88 90.07 77.29

Dehradun 78.98 85.87 71.2 84.25 89.4 78.54

U. S. Nagar 64.86 75.22 53.35 73.1 81.09 64.45

Uttarakhand 71.6 83.3 59.6 78.8 87.4 70.00

Source: Primary Census Abstract, Population Census, 2001 and 2011.

36

Annexure Table 2.5a: District-wise Educational Level of Youth (15-29 Yrs.), 2011

District Illiterate

Literatewithout

educationallevel

BelowPrimary

Primary Middle Secondary

Hr.Secondary

Non-techdiploma

Tech.diploma

Graduateand above

Unsp-ecified Educated

Uttarkashi 9.29 1.48 1.70 10.53 27.84 21.41 15.61 0.02 0.67 11.30 0.15 49.01Chamoli 3.57 1.79 0.92 8.69 28.25 24.96 17.75 0.05 0.55 13.35 0.11 56.67Rudraprayag 3.19 1.60 0.83 7.82 27.09 26.94 20.33 0.04 0.46 11.55 0.15 59.32TehriGarhwal 7.13 1.60 1.39 9.99 27.52 24.90 17.13 0.04 0.61 9.51 0.18 52.18Dehradun 7.95 1.83 2.11 10.28 18.32 20.63 17.56 0.08 0.78 20.34 0.13 59.39PauriGarhwal 4.00 1.27 1.00 7.75 22.63 28.21 21.02 0.06 0.76 13.23 0.07 63.28Pithoragarh 4.57 1.79 1.79 11.47 30.64 23.71 14.92 0.01 0.34 10.67 0.10 49.64Bageshwar 4.27 1.56 1.50 12.60 31.01 25.34 14.68 0.01 0.26 8.66 0.10 48.96Champawat 6.68 0.79 2.03 14.88 30.62 19.93 13.39 0.02 0.47 11.13 0.06 44.94Nainital 7.71 1.03 2.13 11.79 23.52 20.83 16.25 0.07 0.80 15.77 0.11 53.72Udham SinghNagar 16.23 1.46 3.31 15.71 21.14 18.36 12.49 0.06 0.49 10.54 0.21 41.94Hardwar 16.29 1.49 3.59 17.99 20.82 16.75 10.53 0.14 1.01 11.25 0.14 39.68Almora 3.21 1.09 1.10 11.16 31.50 24.85 15.72 0.04 0.53 10.68 0.12 51.82Hill 5.59 1.35 1.49 10.57 27.21 23.99 16.87 0.04 0.60 12.18 0.12 53.68Plain 13.60 1.59 3.03 14.80 20.12 18.50 13.41 0.10 0.77 13.93 0.16 46.71Uttarakhand 9.95 1.48 2.33 12.87 23.35 21.00 14.98 0.07 0.69 13.13 0.14 49.88Source: Population Census, 2011

37

Annexure Table 2.5b: District-wise Educational Level of Population (30-59 Yrs.), 2011

District Illiterate

Literatewithout

educationallevel

BelowPrimary

Primary Middle Secondary

Hr.Secondary

Non-techdiploma

Tech.diploma

Graduateand above

Unsp-ecified Educated

Uttarkashi 37.41 2.92 3.21 13.05 15.82 7.37 7.74 0.02 0.24 11.93 0.30 27.29Chamoli 25.30 2.67 3.41 19.38 17.79 10.46 7.69 0.03 0.24 12.94 0.08 31.37Rudraprayag 27.19 2.66 2.97 18.72 17.93 10.43 8.50 0.03 0.20 11.17 0.20 30.32TehriGarhwal 36.85 4.36 2.65 12.77 13.31 9.51 8.76 0.02 0.27 10.87 0.64 29.43Dehradun 20.81 2.46 2.53 11.34 11.98 13.07 11.71 0.08 0.54 25.34 0.14 50.75PauriGarhwal 22.29 1.66 2.73 16.94 16.27 14.11 10.78 0.04 0.36 14.72 0.09 40.01Pithoragarh 23.42 2.24 5.38 19.68 19.93 10.47 8.25 0.02 0.23 10.25 0.13 29.22Bageshwar 28.28 2.44 4.81 18.91 17.59 11.75 9.05 0.01 0.14 6.83 0.18 27.78Champawat 30.38 1.58 4.91 19.33 17.49 9.30 7.15 0.03 0.33 9.37 0.12 26.19Nainital 21.70 1.39 3.52 15.05 14.48 12.05 11.45 0.06 0.46 19.68 0.15 43.70Udham SinghNagar 39.72 1.80 3.29 13.89 12.22 9.78 7.16 0.05 0.26 11.59 0.23 28.86Hardwar 37.99 1.82 2.30 13.22 12.99 10.07 7.09 0.16 0.73 13.44 0.19 31.49Almora 26.86 1.89 4.06 18.73 17.21 11.29 9.17 0.02 0.21 10.36 0.20 31.05Hill 26.83 2.27 3.65 16.82 16.35 11.11 9.37 0.03 0.30 13.06 0.21 33.87Plains 32.39 2.04 2.68 12.76 12.40 11.05 8.76 0.10 0.52 17.12 0.18 37.55Uttarakhand 29.69 2.15 3.15 14.73 14.32 11.08 9.06 0.07 0.41 15.14 0.20 35.76Source: Population Census, 2011

38

Annexure Table 2.6: Estimates of Human Development Index (HDI) andInequality adjusted HDI

State HDI IHDI Ratio Loss (%)

Andhra Pradesh 0.485 0.332 0.685 31.546

Assam 0.174 0.341 0.718 28.174

Bihar 0.447 0.303 0.679 32.055

Chhattisgarh 0.449 0.291 0.649 35.142

Gujarat 0.514 0.363 0.705 29.495

Haryana 0.545 0.375 0.688 31.180

Himachal Pradesh 0.558 0.403 0.722 27.810

Jharkhand 0.464 0.308 0.663 33.665

Karnataka 0.508 0.353 0.696 30.443

Kerala 0.625 0.520 0.832 16.781

Madhya Pradesh 0.451 0.290 0.643 35.735

Maharashtra 0.549 0.397 0.722 27.750

Odisha 0.442 0.296 0.669 33.107

Punjab 0.569 0.410 0.720 28.035

Rajasthan 0.468 0.308 0.660 34.019

Tamil Nadu 0.544 0.396 0.727 27.275

Uttar Pradesh 0.468 0.307 0.655 34.473

Uttarakhand 0.515 0.345 0.670 33.025

West Bengal 0.509 0.360 0.707 29.302

India 0.504 0.343 0.680 31.996

Source: Surayanarayana, et al. 2015

39

Annexure Table 2.7: District-wise Select Indicators of Health in Uttarakhand, 2015-16

Select indicators of health Uttarakhand Almora Bageshwar

Chamoli

Champawat

Dehradun

Garhwal

Haridwar

Nainital

Pithoragarh

Rudraprayag Tehri US

nagarUttarkash

iMothers who had full antenatalcare (%) 11.5 18.7 10.7 5.9 11.1 18.9 11.9 7.6 20.5 14.7 5.7 7.2 5.8 9.6

Institutional births (%) 68.6 66.3 55.9 53.3 73.3 83.7 74.5 62.8 64.7 73 66.5 71.1 67.5 65.1Institutional births in publicfacility (%) 43.8 57.8 49.6 49.4 54.1 49.5 59.7 23.8 41.2 65.3 59.8 59.4 39.5 58.9

Children age 12-23 months fullyimmunized (BCG, measles, and 3doses each of polio and DPT) (%)

57.7 60.6 60.2 62.2 68.4 60.7 61.2 55.3 59 74.2 70.3 51.1 47.4 72

Children under 5 years who arestunted (height-for-age) (%) 33.5 32.9 25.1 33.7 30.5 28.5 22.9 39.1 32.1 30.6 29.9 30.1 37.8 35.2

Children under 5 years who arewasted (weight-for-height) (%) 19.5 14.4 26.3 18 17.4 30.1 27.4 12.3 9 20.6 18.4 46.9 12 39.4

Children under 5 years who areseverely wasted (weight-for-height) (%)

9 7.7 13.5 7.2 6.1 12 18.1 5.3 3.7 9.2 7.5 28.1 3.5 23.6

Children under 5 years who areunderweight (weight-for-age) (%) 26.6 22.5 27.2 22.3 21.2 30.7 27.9 24.7 17 16.6 25.9 44.2 27.1 40.3

Households with an improveddrinking-water source (%) 92.9 83.9 83 93.2 89.5 99.5 88.1 99.1 95.9 83.9 86.5 77.4 97.6 75.1

Households using improvedsanitation facility (%) 64.5 65 67.4 62.4 59.5 75.6 66.2 56.9 73 62.7 67.6 65.8 56.2 48.5

Women whose BMI belownormal (BMI <18.5kg/m) (%) 18.4 24.8 24.9 15.2 20.6 16.2 16.6 20.7 17.2 13.5 14.8 18.1 19.1 16.9

Children age 6-59 months whoare anaemic (<11.0g/dl.) (%) 59.8 48.6 49 53.6 46.1 50.6 58.1 71.1 58 42.3 58.6 59.9 64.6 76.2

Anaemic women (15-49 yrs) (%) 45.2 32.9 41.3 37.6 35.6 41.9 42.4 55.3 38.4 34.5 38.4 44.6 52.3 52.6Source:NFHS-IV, 2015-16, National Family and Health Survey, International Institute of Population Sciences, Mumbai.

40

Chapter - III

LEVELS OF LIVING IN UTTARAKHAND:SELECT DIMENSIONS

I. INTRODUCTION

Estimates of household consumer expenditure are widely used as a critical measure of

standard of living and welfare in developing countries whereas estimates of income fraught

with conceptual and methodological issues. Hence, this chapter seeks to examine welfare

related issues in the context of development of Uttarakhand with reference to estimates of per

capita household consumer expenditure, its distribution and extent of deprivation as reflected

in different statistical measures. This chapter presents comparative profiles of the NSS

(National Sample Survey) estimates of distribution of household monthly per capita

consumer expenditure for Uttarakhand (the state under review) and Uttar Pradesh (its parent

state), Himachal Pradesh (an adjacent hilly state to its northwest), and all-India which present

the general background for macro-economic policies.

The chapter is organised into seven sections. After a brief introduction in Section I,

Section II provides the context with reference to the composition of the population in terms

of social groups and their implications for sample estimates. Section III provides estimates of

the distributional profiles and their interpretations. Section IV analyses measures of absolute

deprivation at the macro and sector levels. Section V deals with the extent of inclusion of

different social groups with reference to robust measures of average, and the extent of

deprivation amongthem (Section VI). The final Section VII summarizes the chapter.

II. POPULATION COMPOSITION: SOCIAL GROUPS

The social composition of households is generally defined in terms of (i) the Scheduled

Tribes (STs); (ii) the Scheduled Castes (SCs); (iii) the Other Backwards Classes (OBCS); and

(iv) ‘others’(Other Social Groups (OSGs). Unlike the all-India profile, the fourth category of

‘others’ constitutes the dominant section of the population in both rural and urban sectors of

the hilly states of Uttarakhand and Himachal Pradesh; they account for about half the

population (Table 3.1). The STs constitute about five per cent of the population while the SCs

about a quarter and the OBCs about one-sixth of the population in these two states. The STs

constitute less than one per cent of the population in rural and urban Uttar Pradesh (UP). The

OBCs, on the other hand, account for half of the rural and urban populationin Uttar Pradesh

41

and India as a whole. The SCs account for a quarter of the rural UP population. Statistically,

the implications would be as follows. The estimates of different variables for the ST

population in Uttar Pradesh in particular would be less robust and hence less reliable in a

statistical sense. Hence the discussion on Uttar Pradesh would not touch upon the estimates

for the STs.

Table 3.1 (a): Distribution (%) of Population across Social Groups: Rural Sector forSelect States

SocialGroup

2004-05 2011-12

UttarakhandHimachalPradesh

UttarPradesh

AllIndia Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

ST 5.92 5.09 0.49 10.57 4.73 7.64 1.29 11.12SC 22.93 26.98 25.42 20.93 24.43 23.51 26.57 20.8OBC 17.74 15.48 54.7 42.77 16.05 19.81 55.5 45.04OSGs 53.4 52.46 19.39 25.72 54.79 49.04 16.63 23.04Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Table 1 3.1(b): Distribution (%) of Population across Social Groups: Urban Sector forSelect States

SocialGroup

2004-05 2011-12

UttarakhandHimachalPradesh

UttarPradesh All India Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

ST 1.23 2.67 0.45 2.92 1.79 3.85 0.72 3.47SC 16.34 18.85 13.65 15.65 13.23 19.03 13.56 14.62OBC 18.71 9.19 45.37 35.61 26.27 11.61 50.14 41.62OSGs 63.72 69.3 40.53 45.82 58.72 65.51 35.58 40.29Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00Source: Authors’ estimates based on the NSS 61st and 68th round central sample unit record data (ScheduleType I).

III. DISTRIBUTIONAL PROFILES

1. Uttarakhand: Inclusion in the National Mainstream

Every distribution could be examined with reference to its statistical properties like measures

of location as well as dispersion. Income/consumption distributions are highly skewed. An

order based average like the median would be an ideal measure of location. However, it is a

convention in economic policy papers to report levels of living in terms of mean based

estimates as they are simple to understand and interpret. A major limitation of these estimates

is that they could provide misleading relative profiles at times. However, for reasons like

convention and statistical robustness, we report both mean-based and order-based estimates

of averages of monthly per capita consumer expenditure (MPCE) in Uttarakhand, Himachal

42

Pradesh, Uttar Pradesh and all-India (Table 3.2). As could be expected for skewed

distributions, mean-based estimates are higher than the order-based estimates of average

consumption expenditure in all the states under review.

Table 3.2a: Measures of Average MPCE and Inclusion/Exclusion in/from the NationalMainstream: Rural Sector

Disparitymeasure

2004-05 2011-12Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh All India

Mean (Rs.) 648.94 835.57 539.29 579.18 1551.41 1800.60 1072.93 1287.17Disparity w.r.t.national meanMPCE (ηinter%) 12.04 44.27 -6.89 0.00 20.53 39.89 -16.64 0.00Median (Rs.) 555.72 688.25 465.84 486.16 1282.70 1495.91 931.15 1072.97Disparity w.r.t.national medianMPCE (ηinter%) 14.31 41.57 -4.18 0.00 19.55 39.42 -13.22 0.00

Table 3.2b: Measures of Average MPCE and Inclusion/Exclusion in/from the NationalMainstream: Urban Sector

Disparitymeasure


HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh


Mean (Rs.) 1027.58 1422.17 879.671104.6

0 2451.97 3173.232 1942.242 2477.00Disparity w.r.t.national meanMPCE (ηinter%) -6.97 28.75 -20.36 0.00 -1.01 28.11 -21.59 0.00Median (Rs.) 828.40 1201.10 662.68 838.66 1829.39 2639.11 1270.63 1865.54Disparityw.r.t.nationalmedian MPCE(ηinter%) -1.22 43.22 -20.98 0.00 -1.94 41.47 -31.89 0.00Notes: MPCE = Monthly per capita consumer expenditure(Mixed Reference Period).

w.r.t.= with reference to

Source: Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unit recorddata.

A pertinent question in this context would be to examine the extent of

inclusion/exclusion of Uttarakhand in the national mainstream in terms of both mean-based

and order-based measure of MPCE. This could be carried out in terms of estimates of inter-

group median disparities. For this purpose, one may define the following

measures.Letμndenote national mean/median and μsstate-specific mean/median. Disparity

43

between state-specific and the nation-specific averages could be examined by comparing the

respective estimates of median consumption MPCE as follows: 4

ηinter = [(μs/ μn)-1] … (1)

ηinter> 0 =>inclusion in the national mainstream and ηinter < 0 =>exclusion from the national

mainstream.The salient features of the estimates in Table 3.2 are as follows:

(i) Uttarakhand stands second among the three states under review in terms of

estimates of measures of average consumer expenditures for both rural and urban

sectors.

(ii) Both mean and order-based estimates exceed corresponding national averages in

the rural sectors of Uttarakhand and Himachal Pradesh; hence they indicate their

inclusion in the national mainstream. As regards the urban sector, only Himachal

Pradesh stands above the national average.

(iii) Uttarakhand has improved while both Himachal Pradesh and Uttar Pradesh have

declined in terms of percentage difference with respect to the national average in

both ruraland urban sectors. This would suggest that Uttarakhand’s pace of

progress is better than that of the rest of India; but it is not so for Himachal

Pradesh and Uttar Pradesh.

(iv) Himachal Pradesh seems to be doing exceptionally well wherein its averages

exceed the corresponding all India ones in the range between 28 to 40 per cent.

Conversely, the disparity estimates for Uttar Pradesh indicate its exclusion. In

other words, Uttarakhand is doing better than Uttar Pradesh in terms of economic

status relative to that of the nation as a whole.

It may be noted these estimates of average MPCEs are at local current prices and not adjusted

for inter-state price differences. Hence, the disparity estimates are in nominal terms only. The

relative profiles would differ to the extent the spatial cost of living differs across these states.

4 One may also consider the following modification for the measure of disparity: ηinter = [(μs/ αμm)-1]where 0 <α< 1

44

IV. RELATIVE PROFILES OF CONSUMPTION DISTRIBUTIONS

Economic welfare depends not only on the average, however measured, but also on the

salient distributional profiles. Hence, this sub-section would summarize the salient

distributional profiles of Uttarakhand vis a vis Himachal Pradesh, Uttar Pradesh and All India.

1. Rural sector

i. On an average, rural Uttarakhand is doing much better than rural Uttar

Pradesh: Its mean monthly per capita consumer expenditure (MPCE) exceeded

that of Uttar Pradesh by 20 per cent in 2004/05, which increased to about 45

per cent in 2011/12 (Table 3.3a). However, it does not compare well with

Himachal Pradesh; it fell short of the mean MPCE in Himachal Pradesh by 22

per cent in 2004/05 but has improved its relative status since then as the

percentage shortfall of Uttarakhand mean MPCE with respect to that of

Himachal Pradesh declined to 14 per cent in 2011/12. In the national context,

the mean MPCE of Uttarakhand exceeded that of all-India by 12 per cent in

2004/05 and 21 per cent in 2011/12.

ii. The estimates of all percentiles of consumption distribution for Uttarakhand

are less than the corresponding estimates for Himachal Pradesh in both

2004/05 and 2011/12 (Table 3.3b). Barring the 99 the percentile for the rural

sector in 2004/05, every percentile in Uttarakhand exceeds its counterpart in

all-India. Every percentile in Uttarakhand is uniformly higher than the

corresponding percentile in Uttar Pradesh in the two years under review

(Table 3.3b).

iii. The estimates of price-adjusted changes in percentiles between 2004/05 and

2011/12 reveal broadly the same extent of change across percentiles of all the

states under review; the only exception is Uttarakhand wherein the percentiles

in the 90s have increased by larger percentage points. This would be a clear

indication of an increase in the extent of inequality in rural Uttarakhand.

Table 3.3a: Levels of Average MPCE in Uttarakhand relative to Select State Averages(Percentage difference): Rural Sector

45

Disparitymeasure


HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh


Mean(Rs) 648.94 835.57 539.29 579.18 1551.41 1800.60 1072.93 1287.17Uttarakhandmean disparityw.r.t. differentstate meanestimates (ηinter%) 0.00 -22.34 20.33 12.04 0.00 -13.84 44.60 20.53Median 555.72 688.25 465.84 486.16 1282.70 1495.91 931.15 1072.97Uttarakhandmedian disparitywrt different statemedian estimates(ηinter%) 0.00 -19.26 19.29 14.31 0.00 -14.25 37.75 19.55Notes:MPCE = Monthly per capita consumer expenditure (Mixed Reference Period).

wrt = with reference to

Table 3.3b: Summary Statistics on NSS Per Capita Consumer Expenditure Distribution:Rural Sector (2004/05 & 2011/12)

2004/05 2011/12 Percentage real changePercentiles

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh

All

India1 296.40 314.85 208.53 197.42 681.39 704.26 399.16 424.65 48.82 48.10 14.87 32.55

5 344.24 372.68 266.50 259.74 791.37 823.91 524.30 554.54 48.82 45.50 20.19 30.95

10 372.23 421.41 297.09 295.00 848.39 931.32 586.71 639.10 46.85 45.42 20.94 34.09

25 449.13 520.46 364.89 369.73 1024.42 1156.16 723.39 808.64 47.02 46.56 21.70 36.16

50 555.72 688.25 465.84 486.16 1282.70 1495.91 931.15 1072.97 49.75 41.77 23.34 38.15

75 751.25 942.12 614.21 661.42 1739.92 2078.19 1217.02 1495.92 50.53 45.01 21.60 43.62

90 996.54 1325.54 845.64 924.47 2373.71 2910.71 1686.41 2089.60 57.13 44.01 22.87 43.48

95 1191.26 1707.11 1047.80 1175.59 3256.17 3832.85 2079.54 2651.95 92.27 48.94 21.92 43.03

99 1860.27 3042.87 1685.56 2013.84 5499.20 6289.03 3253.19 4361.08 114.54 31.10 16.45 34.01Smallest 115.75 209.31 73.74 14.11 517.69 611.89 139.92 44.11 - - - -Largest 9254.31 18998.28 18202.83 37838.91 19662.56 26622.37 20705.45 94253.73 - - - -Range 9138.56 18788.97 18129.09 37824.80 19144.87 26010.48 20565.53 94209.62 - - - -

IQR 302.12 421.66 249.32 291.69 715.50 922.03 493.63 687.28 - - - -

Mean 648.94 835.57 539.29 579.18 1551.41 1800.60 1072.93 1287.17 58.00 39.91 22.40 39.69Std.Deviation 366.77 635.41 329.25 410.13 917.57 1230.70 650.80 962.86 - - - -Skewness 6.43 8.50 10.40 8.93 3.85 6.32 6.50 13.54 - - - -Kurtosis 101.17 164.87 379.76 278.81 36.29 82.67 98.44 564.58 - - - -

Note:Percentage real changes are worked out with adjustment for changes in the cost of living index implicit inthe state-specific poverty lines estimates using Tendulkar methodology.

Source: Authors’ estimates at current prices based on the NSS 61stand 68th round central sample unit recorddata (Mixed reference Period).

iv. The extent of inequality in consumption distribution, however measured, was the

least in Uttarakhand in 2004/05 (Table 3.3c). The extent of relative nominal

46

consumption inequality increased in Uttarakhand by 2011/12; the percentage

pointsincrease was the highest inUttarakhand among the four cases under

review.Similar increase in the extent of inequality, though to a lesser extent, was

seen in rural all India. Uttar Pradesh too has experienced a marginal increase in

inequality by majority of the measures. Himachal Pradesh is the onlystate which

has experienced a reduction in inequality between these two points in time.

Table 3.3c: Extent of Inequality in the Rural Sector: 2004/05 &2011/12

Inequality measures20045-05 2011-12

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndiaRural

Uttarakhand

HP UP All India Rural

Relative meandeviation

0.172 0.206 0.179 0.199 0.187 0.200 0.179 0.204

Coefficient ofvariation

0.565 0.760 0.611 0.708 0.591 0.683 0.607 0.748

Standard deviationof logs

0.402 0.478 0.428 0.473 0.433 0.463 0.432 0.485

Gini coefficient0.239 0.289 0.252 0.281 0.261 0.279 0.254 0.287

Mehran measure0.317 0.376 0.335 0.369 0.339 0.365 0.337 0.379

Piesch measure0.201 0.246 0.211 0.237 0.221 0.236 0.212 0.242

Kakwani measure0.054 0.079 0.060 0.074 0.064 0.072 0.061 0.076

Theil index (GE(a),a = 1)

0.109 0.169 0.121 0.155 0.128 0.150 0.124 0.161

Mean LogDeviation (GE(a), a= 0)

0.093 0.138 0.104 0.1300.110 0.126 0.106 0.135

Entropy index(GE(a), a = -1)

0.090 0.135 0.103 0.130 0.105 0.124 0.106 0.138

Half (Coeff.Var.squared) (GE(a), a= 2)

0.160 0.289 0.186 0.2510.175 0.234 0.184 0.280

Source:Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unit recorddata (Mixed Reference Period).

2. Urban Sector

i. Urban Uttarakhand too is doing relatively better than other counterparts under

review (Table 3.4a). The shortfall of urban mean consumption in Uttarakhand vis

a vis that of Himachal Pradesh declined from 28 per cent in 2004/05 to 23 per cent

in 2011/12; the shortfall with respect to the all India mean MPCE declined from

seven per cent to just one per cent between these two years. On the other hand,

Uttarakhand is doing better than its parent state Uttar Pradesh in both the

yearsunder review.

47

Table 3.4a: Levels of Average MPCE in Uttarakhand relative to Select State Averages(Percentage difference): Urban Sector

Disparity measure


HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Mean (Rs) 1027.58 1422.17 879.67 1104.60 2451.97 3173.232 1942.242

2477.0

0

Uttarakhand mean

disparity wrt different

state mean estimates

(ηinter%) 0.00 -27.75 16.81 -6.97 0.00 -22.73 26.24 -1.01

Median 828.40 1201.10 662.68 838.66 1829.39 2639.11 1270.63

1865.5

4

Uttarakhand median

disparity wrt different

state median

estimates ( ηinter%) 0.00 -31.03 25.01 -1.22 0.00 -30.68 43.98 -1.94

Notes: MPCE = Monthly per capita consumer expenditure (Mixed Reference Period).wrt = with reference to

Source: Authors’ estimates at current prices based on the NSS 68th round central sample unit record data.

ii) All percentiles of the consumption distribution for urban Himachal Pradesh are

clearly higher than the corresponding percentiles for Uttarakhand, Uttar Pradesh and

all India (Table 3.4b). Only the upper percentiles (greater than or equal to the 50th

percentile) of all India are higher than those for Uttarakhand; finally only the 99th

percentile of Uttar Pradesh is greater than that for Uttarakhand in 2004/05. The profile

differs marginally for the year 2011/12. The 99-th percentile of Uttarakhand exceeds

those of Himachal Pradesh, all India, and Uttar Pradesh reflecting possible rapid

urban growthat the top (Table 3.4b).

iii) The price-adjusted estimates of changes in percentiles generally indicate higher values

at the upper ends indicating an increase in the extent of real consumer expenditure

inequality between the two points in time, more so in Uttarakhand.

48

Table 3.4b: Summary Statistics on NSS Per Capita Consumer Expenditure Distribution:Urban Sector (2004/05 & 2011/12)

2004/05 2011/12 Percentage real change

PercentilesUttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndia

1 338.72 371.15 240.18 267.92 700.83 864.32 512.78 578.05 27.18 57.30 36.62 43.055 418.61 660.12 324.19 361.89 957.92 1122.72 637.98 770.75 49.10 -5.50 19.91 40.2710 467.64 713.71 372.65 423.54 1075.22 1273.48 723.21 908.93 50.20 2.85 17.19 41.9025 598.26 889.19 473.45 571.32 1302.67 1734.78 924.65 1254.85 38.01 19.52 18.42 46.9350 828.40 1201.10 662.68 838.66 1829.39 2639.11 1270.63 1865.54 41.10 44.14 14.86 49.7375 1246.72 1690.81 1003.66 1303.39 2863.38 3786.63 2031.40 2869.45 49.94 48.37 25.52 47.4490 1843.59 2375.15 1524.64 2034.42 4012.96 5574.70 3522.45 4511.92 37.94 59.13 54.16 49.0795 2412.22 2907.65 2128.15 2699.61 5625.18 7657.05 6604.11 6282.13 53.46 87.76 133.44 60.0099 3539.76 6050.12 4048.86 4788.85 13730.12 12493.44 10188.42 11358.83 208.15 30.92 74.76 64.48

Smallest 188.78 258.36 68.53 19.77 553.23 535.39 373.64 53.00 - - - -Largest 8195.85 7025.75 11880.27 29156.71 20563.76 59818.32 67458.10 70132.97 - - - -Range 8007.07 6767.39 11811.74 29136.95 20010.53 59282.93 67084.46 70079.97 - - - -IQR 648.47 801.62 530.21 732.07 1560.71 2051.85 1106.75 1614.60 - - - -Mean 1027.58 1422.17 879.67 1104.60 2451.97 3173.23 1942.24 2477.00 58.89 47.55 43.91 51.53Std. Deviation 714.27 852.22 770.96 926.93 2109.38 2656.58 2232.04 2333.75 - - - -Skewness 3.37 2.79 4.67 4.21 3.99 7.14 10.40 6.84 - - - -Kurtosis 22.99 15.26 38.05 39.39 24.45 105.75 260.62 115.87

Note: Percentage real changes are worked out with adjustment for changes in the cost of living index implicit inthe state-specific poverty lines estimates using Tendulkar methodology.

Source: Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unit recorddata (Mixed reference Period).

iv) The extent of relative inequality as measured by different inequality measures

increased between 2004/05 and 2011/12 (Table 3.4c). In general, the percentage

increase was the highest in Himachal Pradesh followed by Uttar Pradesh, Uttarakhand

and All-India respectively

3. Mainstream Inclusion

We define inclusion with reference to the order measure of average, that is, median

(Suryanarayana, 2008). We identify mainstream with an interval specified by a fraction, say,

from 60 per cent of the median up to its 140 per cent. Since median is an order-based average

and is the 50th percentile of the variable under review, we define an inclusion coefficient in

terms of the proportion of ‘bottom half of the population falling in the mainstream interval’.

Thus, we have a relative perspective on deprivation, that is, anyone whose income is less than

the threshold, that is, 60 per of the median is considered excluded and if their consumer

expenditure exceeds this threshold, that is considered included in the mainstream. An

49

improvement in the fraction of the bottom half of the population in the mainstream band

would indicate progressive inclusion in the mainstream economic activity and vice versa.

The complement of the inclusion coefficient would provide an estimate of the extent of

exclusion for a homogenous society. Symbolically we have an ‘Inclusive Coefficient’ (IC)

denoted by ‘’ is given by

50.

0

)(21

dxxf… (1)

Where 0 << 1 and ξ.50 such that

50.

50.

)(21)(

0

dxxfdxxf

where 0 ≤ ≤ 1

Table 3.4c: Extent of Inequality in the Urban Sector: 2011/12

Inequality measures20045-05 2011-12

Uttarakhand

HimachalPradesh

UttarPradesh

AllIndiaRural

Uttarakhand

HP UP All IndiaUrban

Relative mean deviation0.230 0.202 0.255 0.264 0.253 0.236 0.309 0.271

Coefficient of variation0.695 0.599 0.876 0.839 0.860 0.837 1.149 0.942

Standard deviation of logs0.534 0.496 0.585 0.621 0.575 0.581 0.664 0.637

Gini coefficient0.317 0.283 0.354 0.364 0.351 0.337 0.415 0.377

Mehran measure0.416 0.380 0.455 0.474 0.449 0.444 0.515 0.487

Piesch measure0.267 0.235 0.304 0.309 0.302 0.283 0.366 0.322

Kakwani measure0.090 0.073 0.113 0.117 0.111 0.102 0.153 0.125

Theil index (GE(a), a = 1)0.178 0.141 0.242 0.240 0.238 0.215 0.344 0.267

Mean Log Deviation (GE(a),a = 0)

0.160 0.131 0.203 0.215 0.199 0.188 0.279 0.232

Entropy index (GE(a), a = -1)

0.167 0.142 0.211 0.239 0.203 0.206 0.290 0.256

Half (Coeff.Var. squared)(GE(a), a = 2)

0.242 0.180 0.384 0.352 0.370 0.350 0.660 0.444

Source:Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unit recorddata (Mixed Reference Period).

50

The extent of inclusion of the bottom half of the rural population in the mainstream

was 93.40 per cent in Uttarakhand in 2004/05, which was the highest of the cases under

review (Table 3.5). In 2011/12, the extent of mainstream inclusion in the rural sectors of the

three states under review is higher than the corresponding estimate for rural All India (79.3%).

Mainstream inclusion increased in Himachal Pradesh but declined in the remaining three

cases by the year 2011/12.

The profile is different for the urban sector:The extent of inclusion in the mainstream

was the least in India as a whole; minimum in Uttar Pradesh and maximum in Himachal

Pradesh with Uttarakhand in between in 2004/05. Mainstream inclusion increased in

Uttarakhand and Uttar Pradesh and declined in Himachal Pradesh and all-India. The reasons

for such inclusion may be due to improved reach of government’s redistributive programmes

in rural areas of these states.

Table 3.5: Extent of Mainstream Inclusion: Rural and Urban Sectors

Year 2004-05 2011-12

StateUttarakhand

Himachal Pradesh

UttarPradesh

AllIndia

Uttarakhand

Himachal Pradesh

UttarPradesh

AllIndia

Inclusioncoefficient:Rural 0.934 0.818 0.868

0.812 0.915 0.853 0.846

0.793

Inclusioncoefficient:Urban 0.729 0.746 0.713

0.639 0.770 0.568 0.745

0.623

Source: Authors’ estimates based on the NSS 61st and 68th round central sample unit record data (MixedReference Period).

V. ABSOLUTE DEPRIVATION

This section presents official estimates of the extent of deprivation by rural and urban sectors

in the states of Uttarakhand, Himachal Pradesh, Uttar Pradesh and all India (Table 3.8). The

official estimates provide the extent of deprivation as measured by the percentage of

population living below the subsistence norm called poverty line. The norms for defining the

poverty lines could be different; depending upon the norm, we get different estimates of

poverty line (Table 3.7).The official approach to defining and measuring poverty has evolved

over time. Some salient features are as follows:

51

Lakdawala Approach

The conventional approach to measure poverty anchored the subsistence minimum in the

calorie intake norm (Government of India, 1993). An individual, as observed in empirically

estimated household consumption profiles, who cannot afford consumer expenditure that

could provide for a calorie intake of 2400 calories in the rural sector and 2100 calories in the

urban sector at the all-India level would be called poor. The corresponding consumer

expenditure percentiles are called the poverty lines. Having identified the consumption basket

that would ensure a subsistence minimum intake of calories and estimated its cost as a

measure of poverty line, estimates of poverty ratios are obtained as cumulative population

proportions less than the poverty line. Such poverty lines are obtained separately for rural and

urban all-India. Their state-sector-specific equivalents are obtained using appropriate spatial

cost of living indices. Poverty lines for subsequent years are obtained with price-adjustments

in terms of Laspeyers’base-year-poverty-line-consumption-basket-weighted cost of living

indices. One major limitation of this approach is that such price corrections make sense only

in a stationary setting but not in the development context of structural changes in the

economy involving changes in production and consumption patterns. Hence, there is no

guarantee that the inflation-adjusted poverty lines would guarantee the underlying original

calorie norm.This is precisely what several studies have found out for India and almost all the

states in India. Further, available empirical evidences do not corroborate any association

between calorie intake and health outcomes since calorie is only one of the critical

determinants of health outcomes, however defined and measured.

Tendulkar Approach

In order to address the limitations of the conventional approach, the Tendulkar approach

delinks the concept of poverty line from the calorie intake norm and bases it on some social

perception of deprivation of basic human needs. Accordingly, the two approaches differ in

terms of the information base, methods and interpretations (Government of India, 2009).

52

Rangarajan Approach

Even the Tendulkar approach is not devoid of conceptual and methodological inadequacies.5

Hence, the Government of India appointed the Rangarajan Committee which has defined

deprivation with reference to three basic nutrient requirements (calorie, protein and fats) and

other basic necessities. It too differs from the earlier approaches with respect to conceptual

and methodological details (Government of India, 2014).

We have calculated official estimates of rural and urban poverty for the states under review.

However, its own analysis would be based on MPCE estimates and poverty measures defined

following the Tendulkar committee recommendation on poverty line.

Table 3.6: Estimates of Poverty Lines by State and Method (Rs MPCE)

Rural Urban

YearUttarakhand HP

UttarPradesh

AllIndia

Uttarakhand HP

UttarPradesh All India Method

2004-05 478.02 394.28 365.84 356.30 637.67 504.49 483.26 538.60 Lakdawala2004-05 486.00 520.00 435.00 447.00 602.00 606 532.00 579.00 Tendulkar2009-10 720.00 708.00 664.00 673.00 899.00 888 800.00 860.00 Tendulkar2009-10 830.09 827.03 768.65 801.00 1169.82 1178.46 1130.76 1198.00 Rangarajan2011-12 880.00 913.00 768.00 816.00 1082.00 1064 941.00 1000.00 Tendulkar2011-12 1014.95 1066.60 889.82 972.00 1408.12 1411.59 1329.55 1407.00 RangarajanSource: Government of India (2014)

For the conceptual and methodological reasons mentioned in the preceding bullet points, it

would not make much sense to comment on the time series estimates of deprivation presented

in Table 3.7. However, following good academic and policy convention, one may highlight

some of the salient features as follows:

(i) As per the Lakdawala approach, the incidence of poverty was the highest in

Uttarakhand, followed by Uttar Pradesh and Himachal Pradesh in the rural, urban and

total economy as a whole in 2004/05. This profile is different from the one revealed

by the Tendulkar Committee method for the same year, which shows the incidence of

deprivation to be the highest in Uttar Pradesh followed by Uttarakhand and Himachal

Pradesh in the same year.

5 For conceptual and methodological limitations of the Tendulkar approach, see Suranarayana (2011),

53

(ii) Both the Tendulkar and Rangarajan Committees’ approaches show similar profiles of

deprivation across Uttarakhand, Himachal Pradesh and Uttar Pradesh. Deprivation is

the highest in Uttar Pradesh and the least in Himachal Pradesh. As per their estimates,

deprivation in Uttarakhand and Himachal Pradesh is less than the corresponding

estimates at the national level in both rural and urban sectors; however, the extent of

deprivation is more in Uttar Pradesh than in India as a whole in both rural and urban

sectors.

(iii) In general, both Tendulkar and Rangarajan Committee approaches bring out a

reduction in poverty in all the states at successive points of time under review (Table

3.7).

(iv) Table 3.8 presents estimates of incidence, depth and severity of poverty as measured

by the Pαclass of poverty measures. All these measures reveal identical profiles across

the states under review: Deprivation is the highest in Uttar Pradesh followed by

Uttarakhand and Himachal Pradesh. The extent of deprivation in Uttar Pradesh is

higher than that in the nation as a whole in both rural and urban sectors.

(v) Our estimates of depth and severity show profiles similar to the ones revealed by the

headcount measures for the following reason. They are estimated by making price-

adjustments for the poverty line only. Estimates of depth and severity measures need

to be adjusted for the differential impact of inflation across different expenditure

groups because of changes in consumption basket profiles. Such adjustments have not

been carried out for the estimates presented in Table 3.8. Hence, the estimates of

incidence, depth and severity measures of deprivation show similar profiles across

states.

(vi) Incidence of rural poverty declined by about 66 per cent in Himachal Pradesh and

Uttarakhand, 39 per cent in India as a whole and by 29 per cent in Uttar Pradesh

between 2004-05 and 2011-12.

(vii) As regards urban poverty, the reduction was much higher at the national level (47 per

cent) than in Uttar Pradesh (23 per cent) followed by Uttarakhand (20 per cent) and

Himachal Pradesh (5 per cent) respectively.

54

Table 3.7: Estimates of Poverty by Sector, State and Method

Rural SectorUttarakhand Himachal Pradesh Uttar Pradesh All India

Year % ofpersons

No.ofpersons(lakh)

% ofpersons

No. ofpersons(lakh)

% ofpersons

No. ofpersons(lakh)

% ofpersons

No. ofpersons(lakh)

Method

2004-05 40.8 27.11 10.7 6.14 33.4 473 28.33 2209.24 Lakdawala2004-05 35.1 23.3 25 14.3 42.7 604.7 41.8 3266.6 Tendulkar2009-10 14.9 10.3 9.1 5.6 39.4 600.6 33.8 2782.1 Tendulkar2009-10 22.5 15.6 11.2 6.8 46.3 706.5 39.6 3259.3 Rangarajan2011-12 11.6 8.2 8.5 5.3 30.4 479.4 25.7 2166.6 Tendulkar2011-12 12.6 8.9 11.1 6.9 38.1 600.9 30.9 2605 Rangarajan

Urban Sector2004-05 36.5 8.85 3.4 0.22 30.6 117.03 25.7 807.96 Lakdawala2004-05 26.2 6.4 4.6 0.3 34.1 130.3 25.7 807.6 Tendulkar2009-10 25.2 7.5 12.6 0.9 31.7 137.3 20.9 764.7 Tendulkar2009-10 36.4 10.9 22.5 1.5 49.6 215.1 35.1 1286.9 Rangarajan2011-12 10.5 3.4 4.3 0.3 36.4 10.9 13.7 531.2 Tendulkar2011-12 29.5 9.4 8.8 0.6 45.7 208.2 26.4 1024.7 Rangarajan

Total2004-05 39.6 35.96 10 6.36 32.8 590.03 27.5 3017.2 Lakdawala2004-05 32.7 29.7 22.9 14.6 40.9 735.5 37.2 4076.1 Tendulkar2009-10 18 17.9 9.5 6.4 37.7 737.9 298 3546.8 Tendulkar2009-10 26.7 26.5 12.3 8.3 47 921.6 38.2 4546.2 Rangarajan2011-12 11.3 11.6 8.1 5.6 29.4 598.2 21.9 2697.8 Tendulkar2011-12 17.8 18.4 10.9 7.5 39.8 809.1 29.5 3629.9 Rangarajan

Source: Government of India (2014)

55

Table 3.8a: Estimates of Deprivation in the Rural Sector: Incidence, Depth and Severity(2004/05 vs. 2011/12)

Poverty Measures

2004-05 2011-12 % reductionUttarakhand HP UP

AllIndia

Uttarakhand HP UP

AllIndia

Uttarakhand HP UP

AllIndia

Head-count ratio 35.13 24.97 42.68 41.89 11.7 8.48 30.4 25.73 -66.70 -66.04 -28.77 -38.58

Poverty Gap Index 5.78 4.21 9.15 9.66 1.25 1.03 5.68 5.05 -78.37 -75.53 -37.92 -47.72

FGT Index 1.4 1.11 2.77 3.17 0.20 0.18 1.61 1.5 -85.71 -83.78 -41.88 -52.68Note: The estimates of deprivation corresponding to the normative poverty lines by the Tendulkar methodology.Source: Authors’ estimates based on the NSS 61st and 68th round central sample unit record data (MixedReference Period).

Table 3.8b: Estimates of Deprivation in the Urban Sector: Incidence, Depth andSeverity (2004/05 vs. 2011/12)

Poverty Measures

2004-05 2011-12 % reductionUttara

khand HP UP

All

India

Uttara

khand HP UP

All

India

Uttara

khand HP UP

All

India

Head-count ratio 13.07 4.55 34.05 25.77 10.48 4.33 26.17 13.69 -19.82 -4.84 -23.14 -46.88

Poverty Gap Index 1.66 1.07 7.8 6.09 1.56 0.76 5.29 2.7 -6.02 -28.97 -32.18 -55.67

FGT Index 0.38 0.41 2.53 2.05 0.38 0.21 1.51 0.8 0.00 -48.78 -40.32 -60.98

Note:The estimates of deprivation corresponding to the normative poverty lines by the Tendulkar methodology.Source: Authors’ estimates based on the NSS 61st and 68th round central sample unit record data (MixedReference Period).

VI. MAINSTREAMING/MARGINALISATION

1. Conceptual Outline6

This Section examines the inclusive/exclusive profiles across social groups in the rural and

urban sectors of Uttarakhand. The moot question would pertain to conceptualization and

measurement: How do we define progress and inclusion in a plural society characterized by

social stratification? When there are different social groups, and welfare schemes exclusively

meant for some select social groups are pursued, it would be worthwhile to examine (i) the

extent of progress of each group as a whole in an absolute sense as well as relative to the

mainstream; and (ii) verify how far such programmes have enabled the deprived in these

groups to catch up with better-off in their own strata as well as with those in the mainstream.

6 The conceptual framework and methodological details outlined in this section are based largely onSuryanarayana (2008, 2016).

56

To address these dual objectives, we examined the following

(a) average progress, absolute as well as relative, made by each social group/region, and

(b) mainstreaming/marginalization of the deprived in each of the social groups independently

and also in a collective sense.

This would call for defining measures of strata (sub-stream)-specific as well as overall

(mainstream) progress; this may be done in terms of estimates of group (sub-stream)

specific as well as overall (mainstream) specific median. In a similar way, one may

measure inclusion/exclusion of the poorest in each social group in its own progress as well as

that of the mainstream by estimating the inclusion coefficients proposed in equation (1) with

reference to mainstream and sub-stream medians respectively. The measures corresponding

to these two concepts and their implications are as follows.

2. Measure of Inter-group Disparity (Inclusion/Exclusion)

Methodologically, verification of absolute progress would involve review of

status/improvement in median income/ consumption of the specific social group only.

Assessment of inclusion or improvement relative to the mainstream would involve estimates

of inter-group median disparities. For the latter, one may define the following measures.

Let μm denote mainstream (overall) median and μs sub-stream median. Disparity

between the sub-group and the mainstream could be examined by comparing the median

estimates. The following results would follow:

1) μs< αμm implies exclusion of the sub-group

2) μs> αμmwould imply inclusion

Let us define a measure of inclusion (ηinter) as follows:

ηinter = [(μs/ αμm)-1] … (2)

where 0 <α< 1; (0.6 in this study)

ηinter> 0 => Inter-group inclusion and ηinter< 0 => Inter-group exclusion

57

3. Measure of Mainstreaming/Marginalization

One may examine income/consumption of the bottom rungs of a given social group relative

to its own median (one aspect of the intra-group dimension, that is, inclusion in the sub-group

progress, namely, IC-subgroup) as well as the mainstream median (another aspect of the

intra-group dimension, that is, inclusion in the mainstream progress, namely, IC-mainstream).

These estimates may be worked out by defining the estimator (1) with respect to sub-

stream and mainstream median respectively. The former would give us a measure of

participation of the bottom rungs of the social group concerned in its own (group-specific)

progress while the latter with respect to mainstream progress.

It could so happen that there is some progress in terms of inclusion of the deprived

section of a given social sub-group in its own progress (median) but the progress is quite

unsatisfactory when measured with reference to the community as a whole. Such differences

in progress could be measured by taking the ratio (ω) of IC – mainstream to IC-Subgroup,

which may be called Inclusive Coefficient in a Plural society (ICP). ICP would take the value

‘one’ when the extent of inclusion is the same with respect to both sub-group and mainstream

median; a value less than one would imply that the extent of inclusion in the mainstream is

less than the extent of inclusion in the sub-group’s own progress; it would be an indication of

marginalization . If one could consider IC-sub-group as a measure of inherent potential of the

social group under review, the extent of its marginalization in the economy could be defined

with reference to ICP (ω). A given social group is marginalized if its ω < 1 and the extent of

marginalization is given by (ω-1). If ω> 1, (ω -1) would be > 0, which would indicate

mainstreaming of the social group in the economy.

The estimators would be as follows:

Define inclusion coefficient (1) with respect to both mainstream median (ψm) and sub-stream

median (ψs); their ratio ω would provide a measure of sub-group inclusion from its

distributional perspective.

Define ηintra= (ω – 1) … (3)

We have ηintra> 0 => mainstreaming and ηintra< 0 => marginalization

58

Marginalization: First, Second & Third Degree

Marginalization: First Degree

When the distribution for a certain social group, say SG1, lies entirely to the left of the

distribution corresponding to the rest of the population (RoP) such that the following

conditions hold:

(i) P99(SGr) < P1(SGrop) where P99(SGr) = 99th income/consumption percentile of the

social group under review (SGr) and P1(SGrop) = 1st income/consumption

percentile of the rest of the population (SGrop)

(ii) ηintra = (-) 1

Marginalization: Second Degree

– ηinter< 0

– ηintra< 0

Marginalization: Third Degree

– ηinter> 0

– ηintra< 0

Given this framework, estimates of median across different social groups could be

worked out using the latest available NSS data sets on consumption distribution for the years

as those in Table 3.3. For this purpose, the following social groups (for which data are

available) are considered: Scheduled Tribes (STs), Scheduled Castes (SCs), Other Backward

Castes (OBCs) and others, of whom the first three are generally considered to be

marginalized.

4. Results

Social Groups: Absolute Standards of Living and Deprivation

Going by measures of absolute standard of living in terms of MPCE across percentiles for

different social groups in rural Uttarakhand, both mean and order based estimates indicate

that the OSGs are the most well-off, followed by OBCs and SCs, in 2004/05 as well as in

2011/12 (Table 3.9a). The profile of the STs changes abruptly between 2004/05 and 2011/12;

59

this could be due to statistical reasons.7The profile holds the same for the urban sector too

(Table 3.9b).

Table 3.9a: Summary Statistics on Per Capita Monthly Consumer ExpenditureDistribution by Social Groups: Rural Uttarakhand

Rural 2004-05 2011-12Percentiles ST SC OBC Others Total ST SC OBC Others Total

1 311.70 271.72 300.26 298.46 296.40 678.77 700.12 680.4 688.91 681.39

5 367.60 327.76 333.69 369.57 344.24 808.47 753.18 742.28 821.81 791.37

10 387.46 345.25 345.96 393.81 372.23 844.47 817.96 841.85 925.95 848.39

25 460.49 404.92 420.84 472.93 449.13 1034.71 938.67 1110.88 1143.15 1024.42

50 521.81 498.39 539.20 604.38 555.72 1288.66 1061.4 1414.27 1365.81 1282.70

75 640.18 647.84 769.73 778.60 751.25 1678.34 1494.91 1739.92 1828.74 1739.92

90 827.39 946.67 941.22 1064.93 996.54 3093.51 1918.66 2171.87 2638.38 2373.71

95 1147.33 1113.83 1173.02 1318.07 1191.26 3093.51 4650.09 2423.97 3717.12 3256.17

99 1996.85 1749.98 1721.17 1942.55 1860.27 4091.54 5499.2 3624.68 5002.82 5499.20

Smallest 311.70 165.75 269.12 115.75 115.75 678.77 557.2 569.89 517.69 517.69

Largest 2158.01 2619.62 2616.00 9254.31 9254.31 6897.43 19662.56 6039.95 11677.86 19662.56

Range 1846.31 2453.87 2346.88 9138.56 9138.56 6218.66 19105.36 5470.06 11160.17 19144.87

IQR 179.70 242.92 348.89 305.67 302.12 643.63 556.24 629.04 685.59 715.50

Mean 599.69 576.74 615.77 696.43 648.94 1562.16 1417.37 1443.86 1641.76 1551.41

Std. Deviation 268.01 277.12 282.43 423.46 366.77 843.11 1101.90 584.90 902.26 917.57

Skewness 3.00 2.74 1.94 7.03 6.43 2.31 4.99 1.82 3.07 3.85

Kurtosis 14.80 14.86 8.64 101.66 101.17 11.54 52.05 9.85 19.02 36.29

7 For statistical reasons, the discussion on the results would not touch upon the estimates for STs inUttarakhand, Himachal Pradesh and Uttar Pradesh.

60

Table 3.9b: Summary Statistics on Per Capita Monthly Consumer ExpenditureDistribution by Social Groups: Urban Uttarakhand

Urban 2004-05 2011-12Percentiles ST SC OBC Others Total ST SC OBC Others Total

1 440.72 293.45 364.89 340.65 338.72 645.36 909.85 700.83 769.60 700.83

5 525.82 376.39 379.25 462.43 418.61 645.36 1000.37 876.39 1038.82 957.92

10 525.82 418.61 421.16 525.12 467.64 645.36 1084.61 1000.45 1157.69 1075.22

25 582.23 486.77 539.02 691.93 598.26 1027.90 1165.21 1178.89 1549.62 1302.67

50 640.19 628.43 641.66 935.19 828.40 1302.74 1405.51 1485.65 2240.08 1829.39

75 749.95 793.26 974.09 1385.32 1246.72 1806.13 2133.53 2230.81 3267.29 2863.38

90 749.95 1241.65 1264.18 2029.50 1843.59 2980.70 2829.53 3139.11 4937.44 4012.96

95 2871.84 1468.51 1459.08 2701.48 2412.22 2980.70 3503.99 3593.53 6657.74 5625.18

99 2871.84 2648.67 1548.48 3617.06 3539.76 5167.47 5406.70 10996.54 16339.63 13730.12

Smallest 440.72 256.57 302.73 188.78 188.78 645.36 553.23 625.44 677.46 553.23

Largest 2871.84 5955.75 2806.72 8195.85 8195.85 5167.47 10773.79 10996.54 20563.76 20563.76

Range 2431.11 5699.18 2503.99 8007.07 8007.07 4522.11 10220.56 10371.10 19886.30 20010.53

IQR 167.72 306.49 435.07 693.39 648.47 778.23 968.32 1051.92 1717.67 1560.71

Mean 841.69 761.90 775.07 1173.44 1027.58 1643.18 1812.01 1915.51 2860.79 2451.97

Std. Deviation 647.36 620.22 337.28 775.73 714.27 932.11 1023.04 1485.07 2433.32 2109.38

Skewness 2.67 5.61 1.14 3.02 3.37 1.72 3.62 3.81 3.62 3.99

Kurtosis 8.41 44.21 4.16 19.60 22.99 7.13 24.14 21.03 19.77 24.45

Source: Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unit recorddata (Schedule Type I).

To measure the different dimensions (incidence, depth and severity) of deprivation,

we use the poverty lines estimated following the methodology proposed by the Tendulkar

Committee. Consistent with the estimates of absolute levels of living, we find the incidence

of absolute poverty to be the least among the OSGs, followed by OBCs and highest for SCs

in 2004/05. The percentage point reduction in poverty in Uttarakhand between 2004/05 and

2011/12 is the maximum among the SCs (30.34) followed by OBCs (29.06), STs (20.52) and

OSGs (18.88) (Fig. 3.1). Consistent with the increase in real consumption noted in Table 3.4a,

we find a more or less uniform reduction (around 65 percent) in incidence of poverty among

all the social groups in rural Uttarakhand (Table 3.10a). The relative profile of deprivation

across social groups is similar in Himachal Pradesh and Uttarakhand but with a difference.

The difference is that, unlike Uttarakhand, the extent of reduction in deprivation is highly

uneven across social groups in Himachal Pradesh and Uttar Pradesh: Incidence of poverty

declined by 88 per cent among the OBCs and by 62 per cent among the OSGs in Himachal

61

Pradesh and by 27 percent (OBCs) and 52 per cent (OSGs) in Uttar Pradesh. At the all India

level, percentage poverty reduction fell in the range between 38 and 42 per cent among SCs,

OBCs and OSGs.

Table 3.10a: Estimates of Deprivation: Incidence, Depth and Severity by Social Group:Rural Sector (2004/05 & 2011/12)

2004-05 2011-12 Reduction in poverty (%)

ST SC OBC OSGs Total ST SC OBC OSGs Total ST SC OBC Others TotalPovertyMeasures UttarakhandHead-countratio

32.44

46.24

43.46 27.89 35.13 11.92 15.90

14.40 9.01 11.7

-63.26

-65.61

-66.87 -67.69

-66.70

Poverty GapIndex 4.81 8.53 7.34 4.2 5.78 0.89 1.75 1.71 0.92 1.25

-81.50

-79.48

-76.70 -78.10

-78.37

FGT Index 0.97 2.24 1.82 0.96 1.4 0.10 0.27 0.31 0.15 0.20-

89.69-

87.95-

82.97 -84.38-

85.71

Himachal PradeshHead-countratio

35.37

39.45 19 18.28 24.97 9.48 16.45 2.28 7.00 8.48

-73.20

-58.30

-88.00 -61.71

-66.04

Poverty GapIndex 7.87 7.35 3.08 2.57 4.21 1.19 2.02 0.31 0.83 1.03

-84.88

-72.52

-89.94 -67.70

-75.53

FGT Index 2.86 2.05 0.74 0.57 1.11 0.25 0.37 0.06 0.14 0.18-

91.26-

81.95-

91.89 -75.44-

83.78

Uttar PradeshHead-countratio

41.99

56.48

42.17 26.01 42.68 27.01 41.11

30.72 12.47 30.4

-35.68

-27.21

-27.15 -52.06

-28.77

Poverty GapIndex 5.92

12.78 8.84 5.31 9.15 6.29 8.06 5.58 2.16 5.68 6.25

-36.93

-36.88 -59.32

-37.92

FGT Index 1.25 4.02 2.61 1.57 2.77 1.99 2.21 1.62 0.58 1.61 59.20-

45.02-

37.93 -63.06-

41.88

All IndiaHead-countratio

61.97

52.78

41.02 26.21 41.89 42.74 32.28

24.01 14.99 25.73

-31.03

-38.84

-41.47 -42.81

-38.58

Poverty GapIndex

18.12

12.64 8.79 5.18 9.66 10.41 6.54 4.4 2.38 5.05

-42.55

-48.26

-49.94 -54.05

-47.72

FGT Index 7.04 4.2 2.71 1.5 3.17 3.6 1.93 1.24 0.59 1.5-

48.86-

54.05-

54.24 -60.67-

52.68Note: The estimates of deprivation corresponding to the normative poverty lines by the Tendulkar methodology

Source: Authors’ estimates based on the NSS 68th round central sample unit record data (Schedule Type I).

62

Fig. 3.1: Incidence of Poverty (%) across Social Groups: Rural Uttarakhand

The relative profiles of absolute deprivation in urban Uttarakhand are slightly

different from those observed for the rural sector (Table 3.10b). Even though the relative

standing of the three social groups–SCs, OBCs and OSGs – is the same as for the rural one

for the year 2004/05, it changes for the year 2011/12:The SCs and OBCs interchange their

rank in terms of the extent of deprivation. This is because of a massive reduction in

deprivation (80 percent) among the SCs as compared to only 45 per cent among the OBCs.

Thus, unlike the rural sector, the extent of reduction in poverty across social groups in urban

Uttarakhand is highly uneven: the percentage point reduction in urban poverty was the

maximum among SCs (38.17) followed by OBCs (15.86), STs (13.32) and OSGs (11.51)

(Fig.3.2). The same profile could be found in Himachal Pradesh and Uttar Pradesh. As

regards Himachal Pradesh, poverty actually increased among the STs and SCs in urban areas.

Urban all India too has experienced uneven extent of reduction in poverty among the four

social groups under review.

63

Table 3.10b: Estimates of Deprivation: Incidence, Depth and Severity by Social Group:Urban Sector (2004/05 & 2011/12)

2004-05 2011-12 Reduction in Poverty (%)

ST SC OBCOthers Total ST SC OBC

Others Total ST SC OBC

Others Total

PovertyMeasures UttarakhandHead-countratio 39.05 47.46 34.97

17.93 26.20

25.73 9.29

19.11 6.42 10.48 -34.11

-80.43

-45.35

-64.19

-60.00

Poverty GapIndex 4.04 10.13 7.04 3.22 1.66 8.80 0.95 2.72 0.95 1.56 117.82

-90.62

-61.36

-70.50 -6.02

FGT Index 0.59 2.94 1.93 0.87 0.38 3.36 0.13 0.63 0.23 0.38 469.49-

95.58-

67.36-

73.56 0.00

Himachal PradeshHead-countratio 2.42 9.24 10.84 2.53 4.55 4.01 9.93 9.86 1.74 4.33 65.70 7.47 -9.04

-31.23 -4.84

Poverty GapIndex 0.69 1.67 2.62 0.71 1.07 0.31 2.21 1.61 0.22 0.76 -55.07 32.34

-38.55

-69.01

-28.97

FGT Index 0.20 0.50 0.77 0.34 0.41 0.04 0.73 0.28 0.06 0.21 -80.00 46.00-

63.64-

82.35-

48.78

Uttar PradeshHead-countratio 40.31 44.24 42.71

20.86 34.05

16.31

39.14

32.31 12.77 26.17 -59.54

-11.53

-24.35

-38.78

-23.14

Poverty GapIndex 10.55 11.58 9.77 4.28 7.8 5.16 8.31 6.5 2.44 5.29 -51.09

-28.24

-33.47

-42.99

-32.18

FGT Index 3.83 3.92 3.19 1.31 2.53 1.72 2.48 1.81 0.71 1.51 -55.09-

36.73-

43.26-

45.80-

40.32

All IndiaHead-countratio 35.05 40.03 31.46

15.89 25.77

23.27

21.57

16.23 7.38 13.69 -33.61

-46.12

-48.41

-53.56

-46.88

Poverty GapIndex 10.44 10.13 7.44 3.37 6.09 5.04 4.29 3.28 1.34 2.7 -51.72

-57.65

-55.91

-60.24

-55.67

FGT Index 4.2 3.58 2.49 1.05 2.05 1.59 1.29 0.98 0.36 0.8 -62.14-

63.97-

60.64-

65.71-

60.98Note: The estimates of deprivation corresponding to the normative poverty lines by the Tendulkar methodology

Source: Authors’ estimates based on the NSS 68th round central sample unit record data (Schedule Type I).

Fig. 3.2: Incidence of Poverty (%) across Social Groups: Urban Uttarakhand

64

Social Group Inclusion/Exclusion

One would seldom come across evidence for marginalization of the first degree anywhere in

India. The estimates of disparity ratios (ηinter ) clearly provide unambiguous evidence of inter-

group inclusion of all the social groups in the state mainstream in both rural and urban sectors

of Uttarakhand as well as the remaining states under review. The extent of inclusion varies

across social groups, however measured. The main findings are as follows:

Rural Uttarakhand:

(i) The extent of median inclusion in rural Uttarakhand was the highest for the OSGs

(81 per cent) in 2004/05 which declined to 77 per cent by 2011/12 (Table 3.11a).

It has been lowest for SCs, which declined from 49 per cent to 38 per cent in rural

Uttarakhand. The mean based estimates confirm this profile only for OSGs but not

for SCs. Given the robust property of the order-based estimates for skewed

distributions, one may confirm the findings based on the order-based estimates.

(ii) The OBCs improved their extent of mainstream median inclusion from 62 per cent

in 2004/05 to 84 per cent in 2011/12. The STs too improved their inter-group

median inclusion from 57 per cent to 67 per cent between the two years under

review. The mean based inclusion measures confirm this finding for STs only.

However, the estimates for STs may not be robust.

(iii) These results show that inclusion process for SCs was far behind as compared to

other social groups in rural Uttarakhand; and the reach of high economic growth

to SCs was less than satisfactory.

Urban Uttarakhand:

(iv) Both OBCs and OSGs improved their lot as measured by both mean- and order-

based measures inter-group inclusion (Table 3.11b).

(v) These two measures unambiguously reveal a reduction in inter-group inclusion of

the STs. The order based measure showed marginal improvement in the inter-

group inclusion of the SCs in urban areas of Uttarakhand.

65

Table 3.11a: Measures of Inter-Group Inclusion/Exclusion: Rural Uttarakhand

2004-05 2011-12

ST SC OBC Others Total ST SC OBC Others Total

Mean 599.69 576.74 615.77 696.43 648.94 1562.16 1417.37 1443.86 1641.76 1551.41DisparitywrtUtatrakhand TotalmeanMPCE(ηinter%) 54.02 48.12 58.15 78.86 67.82 52.27 55.11 76.37 -

Median 521.81 498.39 539.20 604.38 555.72 1288.66 1061.4 1414.27 1365.81 1282.70DisparitywrtUttarakhand TotalmedianMPCE(ηinter%) 56.50 49.47 61.71 81.26 67.44 37.91 83.76 77.47Source: Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unitrecord data sets (Schedule Type I).

Table 3.11b: Measures of Inter-Group Inclusion/Exclusion: Urban Uttarakhand

2004-05 2011-12

ST SC OBC Others Total ST SC OBC Others Total

Mean 841.69 761.90 775.07 1173.44 1027.58 1643.18 1812.01 1915.51 2860.79 2451.97DisparitywrtUtatrakhand TotalmeanMPCE(ηinter%) 36.52 23.58 25.71 90.32 11.69 23.17 30.20 94.46

Median 640.19 628.43 641.66 935.19 828.40 1302.74 1405.51 1485.65 2240.08 1829.39DisparitywrtUttarakhand TotalmedianMPCE(ηinter%) 28.80 26.43 29.10 88.15 18.69 28.05 35.35 104.08Source: Authors’ estimates at current prices based on the NSS 61st and 68th round central sample unitrecord data sets (Schedule Type I).

Social Group Mainstreaming/Marginalization

The extent of mainstreaming/marginalization of different social groups could be examined in

terms of estimates of ηintra coefficient (Table 3.12). The results are as follows:

66

Rural Sector:

(i) Uttarakhand: In 2004/05, mainstream inclusion was the maximum for STs in

rural Uttarakhand. The extent of mainstream inclusion for the bottom half of STs

and OSGs exceeded that for SCs and OBCs. This profile remained the same in

2011/12 but for some marginal decline in mainstream inclusion for STs, OBCs

and OSGs. As regards the SCs, main stream inclusion increased marginally

between the two years. The SCs and OBCs were the marginalized social groups in

2004/05; only SCs continued to be so in 2011/12.

(ii) Himachal Pradesh: The extent of mainstream inclusion was the highest for

OSGS in 2004/05; the OBCs replaced OSGs in this position in 2011/12.

Mainstream inclusion for STs and SCs is less than the average for the population

as a whole. However, the extent of mainstream inclusion improved for STs, SCs

and OBCs in 2011/12. Both SCs (13%) and STs (18%) are the marginalized

sections of the Himachal population; the extent of marginalization of the SCs,

however, declined from 27 per cent in 2004/05 to 18 per cent in 2011/12.

(iii) Uttar Pradesh: Among the SCs, OBCs and OSGs, the extent of mainstreaming

was highest for OSGs in 2004/05 followed by OBCs and SCs. The profile

remained the same in 2011/12 even though the extent of mainstreaming of OBCs

and SCs declined. The SCs are the most marginalized group whose extent of

marginalization increased between the two years under consideration. The OBCs

appear to be slightly marginalized in 2011/12 only.

(iv) All India: The extent of mainstreaming is the highest for OSGs, followed by

OBCs, SCs and STs. Barring the OSGs, mainstreaming has declined for all the

social groups. Both STs and SCs are the marginalized ones whose extent of

marginalization declined in 2011/12.

Urban Sector

Uttarakhand: In 2004/05, mainstream inclusion was the maximum for the STs in urban

Uttarakhand. The extent of mainstream inclusion for the bottom half of the STs and OSGs

exceeded that for the SCs and OBCs. This profile changed altogether in 2011/12 which saw a

drastic reduction for the STs and improvement for the SCs in mainstream inclusion The STs,

SCs and OBCs are the marginalized social groups in 2004/05 as well as 2011/12; however,

67

the extent of marginalization of the SCs and OBCs has declined between the years under

review (Table 3.12b).

Table 3.12a: Extent of Mainstreaming/Marginalization by Social Groups: Rural SectorRural 2004-05 2011-12

ST SC OBC Others Total ST SC OBC Others TotalUttarakhand

MainstreamInclusion 0.977 0.865 0.902 0.969 0.934 0.975 0.874 0.863 0.944 0.915SubstreamInclusion 0.977 0.955 0.938 0.908 0.934 0.975 0.992 0.768 0.903 0.915Mainstreamingvs.Marginalization(ηintra %) 0.00 (-)9.39 (-)3.80 6.78 0.00 0.00 (-)11.97 12.39 4.59 0.00

Himachal PradeshMainstreamInclusion 0.721 0.647 0.866 0.900 0.818 0.817 0.730 0.967 0.871 0.853SubstreamInclusion 0.756 0.886 0.866 0.82666 0.818 0.942 0.887 0.868 0.806 0.853Mainstreamingvs.Marginalization(ηintra %) (-)4.60 (-)26.92 0.00 8.89 0.00 (-)13.26 (-)17.64 11.39 8.07 0.00

Uttar PradeshMainstreamInclusion 0.958 0.804 0.874 0.934 0.868 0.772 0.752 0.862 0.948 0.846SubstreamInclusion 0.981 0.911 0.869 0.825 0.868 0.742 0.901 0.877 0.840 0.846Mainstreamingvs.Marginalization(ηintra %) (-)2.36 (-)11.68 0.55 13.18 0.00 3.98 (-)16.51 (-)1.70 12.89 0.00

All-IndiaMainstreamInclusion

0.546 0.743 0.844 0.923 0.812 0.559 0.716 0.820 0.923 0.793

SubstreamInclusion

0.814 0.861 0.840 0.786 0.812 0.790 0.796 0.807 0.779 0.793

Mainstreamingvs.Marginalization(ηintra %)

-32.87 -13.64 0.38 17.36 0.00 -29.33 -10.14 1.54 18.41 0.00

Himachal Pradesh: The extent of mainstream inclusion was the highest for the STs in

2004/05 and 2011/12. Mainstream inclusion for the SCs and OSGs was less than the average

for the population as a whole. The extent of mainstream inclusion has declined for all the

social groups between the two years under review. Both the SCs and OBCs are the

marginalized sections of the Himachal population; the extent of marginalization of SCs,

however, increased from 20 per cent to 82 per cent and that for OBCs from one per cent to 25

per cent.

68

Uttar Pradesh: Among the SCs, OBCs and OSGs, the extent of mainstreaming was the

highest for OSGs followed by OBCs and SCs in 2004/05 and 2011/12.The extent of

mainstreaming of these three social groups and the profile for the population as a whole

improved during this period. The SCs and the OBCs are the marginalized social groups.

All India: The extent of mainstreaming is the highest for OSGs, followed by OBCs, SCs and

STs. Mainstreaming improved for the STs and OSGs but declined for SCs and OBCs. The

STs, SCs and OBCs are the marginalized ones; the extent of marginalization of STs increased

while that of SCs and OBCs declined marginally in 2011/12.

Table 3.12b: Extent of Mainstreaming/Marginalization by social groups: Urban Sector

Urban 2004-05 2011-12

ST SC OBC Others Total ST SC OBC Others TotalUttarakhand

Mainstream Inclusion 0.934 0.473 0.660 0.812 0.729 0.485 0.786 0.602 0.850 0.770

Substream Inclusion 1 0.889 0.898 0.727 0.729 0.599 0.991 0.864 0.687 0.770Mainstreaming vs.Marginalization(ηintra %) -6.62 -46.84 -26.49 11.67 0.00 -19.03 -20.64 -30.34 23.73 0.00

Himachal Pradesh


Substream Inclusion 0.952 0.911 0.783 0.574 0.746 0.814 0.784 0.724 0.675 0.568Mainstreaming vs.Marginalization(ηintra %) 0.00 -19.73 -1.31 28.58 0.00 13.04 -81.91 -25.19 0.00 0.00

Uttar Pradesh


Substream Inclusion 0.748 0.798 0.790 0.672 0.713 0.114 0.850 0.851 0.592 0.745Mainstreaming vs.Marginalization(ηintra %) 0.00 -29.47 -21.19 28.52 0.00 505.26 -31.63 -19.13 49.85 0.00

All-India

Mainstream Inclusion0.445 0.416 0.559 0.789 0.639 0.417 0.425 0.553 0.784 0.623

Substream Inclusion0.569 0.727 0.711 0.600 0.639 0.605 0.687 0.675 0.606 0.623

Mainstreaming vs.Marginalization(ηintra %)

-21.72 -42.75 -21.32 31.62 0.00 -31.13 -38.15 -18.01 29.40 0.00

Source: Authors’ estimates based on the NSS 68th round central sample unit record data (Mixed ReferencePeriod).

Thus, the estimates of inclusion/exclusion and mainstreaming/marginalization

presented in Tables 3.12 and 3.13 provide unambiguous evidence of Third-degree

marginalization in the three states under review and India as a whole.

69

VII. SUMMARY

Defining a concept of deprivation and deriving a corresponding measure of it consistently

across heterogeneous regional contexts is an empirical challenge for studies on a state like

Uttarakhand. Therefore, this study has made an attempt to examine issues related to

deprivation and inequality in Uttarakahand from a statistical perspective as well as in terms of

conventional concepts and measures. In order to assess the challenges and achievements of

Uttarakhand, we carry out the analysis in a comparative setting involving its parent state,

Uttar Pradesh, the neighbouring hill state of Himachal Pradesh and the national context of

India. The major findings are as follows:

Uttarakhand stands second among the three states under review in terms of estimates

of measures of average consumer expenditures for both rural and urban sectors. It has

improved while both Himachal Pradesh and Uttar Pradesh have declined in terms of their

average consumption levels relative to that of the nation as a whole. This would suggest that

Uttarakhand’s pace of progress is better than that of the rest of India; not so for Himachal

Pradesh and Uttar Pradesh.

Inequality in rural nominal consumption distribution, however, measured, was the

least in Uttarakhand in 2004/05. The extent of relative nominal consumption inequality

increased in Uttarakhand by 2011/12; the percentage points increase was the highest in

Uttarakhand among the four states (all-India inclusive) under review. As regards urban

nominal consumption inequality, it increased in all the states under review; the percentage

increase was the highest in Himachal Pradesh followed by Uttar Pradesh, Uttarakhand and

All-India respectively.


was 93.40 per cent in Uttarakhand in 2004/05, which was the highest of the cases under

review. Mainstream inclusion increased in urban Uttarakhand and Uttar Pradesh but declined

in Himachal Pradesh and all-India. The reasons for such inclusion could be improved reach

of government’s redistributive programmes in rural areas of these states.

Estimates of absolute deprivation vary depending upon the concept and measure used.

This study has explored conventional as well as contemporary approaches in this respect. As

per the Lakdawala approach, the incidence of rural poverty was the highest in Uttarakhand,

followed by Uttar Pradesh and Himachal Pradesh in the rural, urban and total economy as a

70

whole in 2004/05. This profile is different from the one revealed by the Tendulkar Committee

method for the same year, which show the incidence of deprivation to be the highest in Uttar

Pradesh followed by Uttarakhand and Himachal Pradesh in the same year. In general, both

Tendulkar and Rangarajan Committee approaches reveal a reduction in poverty in all the

states at successive points of time under review. As regards urban poverty, the reduction was

much higher at the national level than in Uttar Pradesh followed by Uttarakhand and

Himachal Pradesh respectively.

Consistent with the estimates of absolute levels of living, we find the incidence of

absolute poverty to be the least among the OSGs, followed by OBCs and highest for SCs in

2004/05. The percentage point reduction in poverty in Uttarakhand between 2004/05 and

2011/12 was the maximum among the SCs (30.34) followed by the OBCs (29.06), the STs

(20.52) and the OSGs (18.88). There was a more or less uniform reduction (around 65

percent) in incidence of poverty among all the social groups in rural Uttarakhand. The

relative profile of deprivation across social groups is similar in Himachal Pradesh and

Uttarakhand but with a difference. The difference is that, unlike Uttarakhand, the extent of

reduction in deprivation is highly uneven across social groups in Himachal Pradesh and Uttar

Pradesh: Incidence of poverty declined by 88 per cent among OBCs and by 62 per cent

among OSGs in Himachal Pradesh, and by 27 per cent (OBCs) and 52 per cent (OSGs) in

Uttar Pradesh. At the all India level, percentage poverty reduction fell in the range between

38 and 42 per cent among SCs, OBCs and OSGs.

The relative profiles of absolute deprivation in urban Uttarakhand is slightly different

from the one observed for the rural one. Even though the relative standing of the three social

groups– the SCs, OBCs and OSGs – is the same as the rural one for the year 2004/05, it

changes for the year 2011/12 – the SCs and the OBCs interchange their rank in terms of the

extent of deprivation. This is because of a massive reduction in deprivation (80 percent)

among the SCs as compared to only 45 per cent among the OBCs. Thus, unlike the rural

sector, the extent of reduction in poverty across social groups in urban Uttarakhand is highly

uneven: the percentage point reduction in urban poverty was the maximum among SCs

(38.17) followed by OBCs (15.86), STs (13.32) and OSGs (11.51). The same profile could be

found in Himachal Pradesh and Uttar Pradesh. As regards Himachal Pradesh, poverty

actually increased among STs and SCs in urban areas. Urban all India too has experienced

uneven extent of reduction in poverty among the four social groups under review.

71

The extent of mainstream inclusion in rural Uttarakhand was the highest for OSGs

(81%) in 2004/05 which declined to 77 per cent by 2011/12. It has been the lowest for SCs,

which declined from 49 per cent to 38 per cent in rural Uttarakhand. The rural OBCs

improved their extent of mainstream inclusion from 62 per cent in 2004/05 to 84 per cent in

2011/12. The STs too improved their inter-group inclusion from 57 per cent to 67 per cent

between these two years under review. These results show that inclusion process for SCs was

far behind compared to other social groups in rural Uttarakhand; and the reach of high

economic growth to SCs was less than satisfactory. Both the OBCs and OSGs improved their

lot as measured by both mean- and order-based measures of inter-group inclusion in urban

Uttarakhand.

Mainstream inclusion was the maximum for STs in rural Uttarakhand in 2004/05. The

extent of mainstream inclusion for the bottom half of the STs and OSGs exceeded that for the

SCs and OBCs. This profile remained the same in 2011/12 but for some marginal decline in

mainstream inclusion for the STs, OBCs and OSGs. As regards the SCs, mainstream

inclusion increased marginally between the two years. The SCs and OBCs were the

marginalized social groups in 2004/05; only the SCs continued to be so in 2011/12.

Mainstream inclusion was maximum for the STs in urban Uttarakhand. The extent of

mainstream inclusion for the bottom half of the STs and OSGs exceeded that for the SCs and

OBCs. This profile changed altogether in 2011/12 which saw a drastic reduction for the STs

and improvement for the SCs in mainstream inclusion. The STs, SCs and OBCs were the

marginalized social groups in 2004/05 as well as 2011/12; however, the extent of

marginalization of the SCs and the OBCs declined between the years under review.

72

Chapter - IV

DEPRIVATION IN UTTARAKHANDA District-wise Profile

Having presented the macro profiles of levels of living, extent of mainstream and sub streaminclusion, extent of inequality, deprivation and marginalization across rural/urban sectors andby social groups for Uttarakhand in juxtaposition with those for Himachal Pradesh, UttarPradesh and All India, this Chapter presents empirical evidence on select distributional issuesat the district level in Uttarakhand. The reference year is 2011/12. To be specific, it seeks toexamine the following issues:

(i) What is the extent of inter-district disparities and observed profile in terms ofmonthly per capita household consumer expenditure?

(ii) What is the extent of nominal relative inequality in per capita household consumerexpenditure in the rural and urban sectors across districts and in the state as awhole?

(iii) How lopsided is the welfare outcome as reflected in estimate of incidence ofpoverty between hill and plain regions?

(iv) What is the profile of incidence of absolute poverty across social groups in hilland plain districts/regions?

(v) What are the major covariates of poverty across districts in rural and urbanUttarakhand?

In pursuit of empirical evidence for the questions raided above, the chapter is structured asfollows: Section Ideals with the data, its limitations and methodology of estimation ofpoverty at district-level for Uttarakhand. Section II analyses rural-urban disparities inmonthly per capita consumer expenditure (MPCE) across districts and their rural and urbanareas, in a comparative framework. Section IIIpresents estimate of extent of relativeinequality across districts by rural and urban sectors. Section IVprovides district-wiseestimates of poverty separately for rural and urban areas. Section Vexamines the rural urbanprofiles in different consumption related parameters. Section VI provides profiles of povertyacross social groups by hill and plain regions in rural and urban Uttarakhand. Section VIIanalyses the determinants of poverty. The final section concludes the chapter.

73

I. DATA BASE AND METHODOLOGY

The NSS is based on stratified multi-stage sample design. The stratification involves divisionof the state into different regions with respect to population and agro-economic parameters.Conventional NSS design is such as to generate samples representative at the regional level.The NSS samples at the district level are suspect to suffer from inadequate number of sampleobservations. As a result, samples at the district level would not show enough variability topermit robust statistical analysis. Hence, it has become customary for studies on state anddistrict level human development reports to pool state and central samples of NSS householdconsumption distribution to generate representative samples at the district level ( a la Minasand Sardana, 1990). For the current study on Uttarakhand, the Directorate of Economics andStatistics (DES), Government of Uttarakhand has pooled the central and state samples of NSS68th round data for Uttarakhand (Government of Uttarakhand (GoUK), 2016).8

NSS estimates are generally made available at current local prices. Hence there is a need torevise the estimates at some comparable prices for different district wise information. Theprice adjustments are carried out using district-wise cost of living indices estimated a la theFisher ideal index number. For this purpose, we have made use of unit values derived fromdistrict-wise NSS estimates of values and quantities of 102major items of consumptionreported in the pooled state-central samples for rural and urban sectors separately. We haveused the same spatial cost of living indices to work out district-specific poverty linescorresponding to the state level poverty lines of Rs 880 for therural sector and Rs 1082 forthe urban sector (vide methodology recommended by the Tendulkar Committee methodology(see Section 4 & Table 7)).

II. INTER-DISTRICT DISPARITIES IN CONSUMPTION

The district-wise estimates of mean MPCE (with and without adjustments for inter-districtvariations in prices) by rural and urban sectors in Uttarakhand are presented in Tables 4.1 and4.2 respectively. They show variability in the distribution for each district. Some salientfeatures are as follows:

8Please refer to GoUK (2016) for statistical details on pooling and estimates of relative standard errors. Weightsfor the pooling the state and central samples are worked out using the matching ratio method. This methodinvolves obtaining an aggregate estimate of pooled sample in proportion matching ratio m: n of central and statesample aggregate estimate; where, m and n are the allotted sample for central and state sample respectively forrural and urban sector. When the State’s participation is equal matching of central samples, the simple averageof two estimates may be a way of combining the estimates considering central and state samples as independentsamples. The sample sizes of households and person and persons across districts are provided in Annexure 1 ofthe chapter.

74

1. Rural Sector

(i) The average MPCE (at average state level prices) in rural Uttarakhand was Rs1460.10 in 2012/13. The district-wise average MPCE ranged from the minimum of Rs1292.03 (Pithoragarh) to Rs 1927.07 (Nainital) (Table 4.1b). Thus, Nainital andPithoragarh turn out to be the best-off and worst-off districts in the rural Uttarakhand.

(ii) The marginal distribution of rural mean MPCE across districts is positively skewed(Figure 1), which indicates high density of the poor half of the districts in a narrowrange at low levels of living and limited scattered prosperity across districts at theover a wide upper range. Nainital is even an outlier prosperous district in the ruralsector (Figure 4.1).

(iii)Pithoragarh, Pauri Garhwal, Haridwar and Dehradun hills constitute the poorestquartile group of districts in terms of average per capita consumer expenditure at statelevel prices; Rudraprayag, Chamoli, Nainital Hills and Tehri Garhwal form the lowermiddle quartile group; Bageshwar, Uttarkashi, Almora and Champawat belong to theupper middle quartile group;Dehradun, Udham Singh Nagar and Nainital form therichest quartile group in the rural sector of Uttarakhand (Table 4.7)

(iv) As per estimate at local prices, the poorest of the district-wise poorest sampleobservation across districts is located in Pithoragarh (Rs 424.4) while the richestamong the district-wise poorest is found in Nainital Hills (Rs 704.61). Conversely, thepoorest of among the district-wise richest is located in Nainital Hills (Rs 4271.23)while the richest among the district-wise richest rich is found in Dehradun (Rs19662.56) (Table 4.1a)

(v) MPCE (at local prices) distribution varied across districts with respect to its differentdimensions. While the range between the richest and the poorest was the minimum inNainital Hills (Rs 3566.62), inter-quartile range was the minimum in Tehri Garhwal(Rs 410.96) and standard deviation in Nainital Hills (Rs 563.72). The range betweenthe poorest and the richest was the maximum in Dehradun (Rs19092.67), inter-quartile range was the maximum in Nainital (Rs 986) and standard deviation inChampawat (Rs 1218.99).This clearly brings out how heterogeneous are the districtswith respect to even the factors governing the distribution of per capita householdconsumer expenditure (Table 4.1a).

75

Table 4.1a: Summary Profiles of District-wise Consumer Expenditure Distribution: Rural Uttarakhand 2011/12(At current local prices)

Percentiles Uttarkashi Chamoli Rudraprayag Tehri Garhwal Dehradun Pauri Garhwal Pithoragarh Bageshwar Almora Champawat Nainital Udham Singh Nagar Haridwar Nainital Hills Dehradun Hills State as a whole

1 551.17 714.35 487.38 667.67 602.71 502.68 424.4 476.32 543.12 633.72 597.82 681.39 445.47 704.61 678.77 502.68

5 578.19 807.1 726.41 847.48 602.71 565 538.48 557.2 634.22 765.06 841.85 820.19 601.32 766.11 781.81 622.9

10 578.19 843.49 781.14 874.22 838.38 686.27 755.63 677.95 709.44 790.85 877.46 923.28 601.32 837.33 921.29 753.18

25 914.49 1002.39 953.41 1056.09 1125.63 851.52 959.89 855.02 924.18 976.68 1213.53 1155.38 905.57 965.44 1083.23 950.91

50 1262.34 1230.83 1318.12 1206.12 1340.42 1067.89 1112.48 1165.04 1129.92 1310.86 1537.84 1453.66 1091.00 1300.27 1288.66 1232.14

75 1686.54 1627.46 1591.41 1467.05 2033.34 1706.26 1460.08 1535.25 1670.64 1708.88 2196.39 1869.57 1522.27 1739.16 1515.19 1697.84

90 2198.35 2267.28 2063.55 1893.02 3076.03 2195.74 1866.41 2173.59 2257.75 2724.97 3253.66 2328.64 2036.89 1801.42 1693.25 2249.08

95 2556.76 2576.44 2489.79 2230.07 3256.17 2694.59 2250.98 2680.91 2795.46 3676.5 3737.58 3673.26 3093.51 2681.39 2463.99 3093.51

99 5842.37 4086.18 3695.68 3801.4 4457.78 3951.95 3599.67 4091.54 4607.64 10066.66 4893.34 4469.88 5499.2 4238.81 7206.75 5002.82

Smallest 442 681.03 487.38 566.32 569.89 441.61 424.4 476.32 475.53 633.72 546.79 681.39 445.47 704.61 678.77 424.4

Largest 11677.34 4766.29 4810.81 5434.57 19662.56 6970.68 6626.62 6405.86 4715.19 10066.66 12749.86 11677.86 7571.72 4271.23 9207.68 19662.56

Range 11235.34 4085.26 4323.43 4868.25 19092.67 6529.07 6202.22 5929.54 4239.66 9432.94 12203.07 10996.47 7126.25 3566.62 8528.91 19238.16

IQR 772.05 625.07 638.00 410.96 907.71 854.74 500.19 680.23 746.46 732.20 982.86 714.19 616.70 773.72 431.96 746.93

Mean 1429.54 1426.53 1382.37 1354.70 1698.95 1353.30 1274.28 1331.35 1377.84 1581.95 1904.54 1638.13 1346.29 1375.29 1408.50 1460.10

Std. Deviation 1165.80 669.73 601.17 604.45 1005.71 749.73 596.18 759.33 737.19 1218.99 1054.97 862.67 936.28 563.72 797.92 873.55

Skewness 6.20 2.25 1.76 3.27 5.37 2.12 2.49 2.57 2.01 4.44 2.52 2.78 3.18 1.95 5.99 3.83

Kurtosis 53.21 9.32 7.84 18.39 82.66 10.28 14.40 13.02 7.97 28.21 18.17 14.98 15.43 9.19 47.80 35.82Note: NSSO collects sample separately from hill and plain areas of Nainital and Dehradun districts for capturing geographic-specific diversities in consumption expenditureand employment. These two sub-samples from hill and plain areas are then aggregated to arrive at district level estimates.Source:Authors’ estimates based on the NSS 68th round central and state sample pooled unit record data

76

Table 4.1b: Summary Profiles of District-wise Consumer Expenditure Distribution: Rural Uttarakhand 2011/12

(Atcurrent average state level rural prices)Percentiles Uttarkashi Chamoli Rudraprayag Tehri Garhwal Dehradun Pauri Garhwal Pithoragarh Bageshwar Almora Champawat Nainital

Udham SinghNagar Haridwar Nainital Hills Dehradun Hills State

1 536.78 670.73 466.85 666.35 553.46 480.98 430.31 490.97 595.12 608.80 604.89 692.63 428.98 689.20 633.71 502.68

5 563.10 757.82 695.81 845.80 553.46 540.61 545.98 574.34 694.94 734.97 851.81 833.72 579.06 749.35 729.91 622.9

10 563.10 791.99 748.24 872.49 769.88 656.64 766.15 698.80 777.36 759.75 887.84 938.51 579.06 819.01 860.13 753.18

25 890.62 941.19 913.25 1054.00 1033.66 814.75 973.26 881.32 1012.66 938.27 1227.88 1174.44 872.05 944.32 1011.32 950.91

50 1229.39 1155.68 1262.60 1203.73 1230.90 1021.78 1127.98 1200.87 1238.10 1259.31 1556.03 1477.64 1050.61 1271.82 1203.11 1232.14

75 1642.52 1528.09 1524.37 1464.14 1867.20 1632.59 1480.42 1582.47 1830.58 1641.67 2222.37 1900.42 1465.92 1701.11 1414.60 1697.84

90 2140.97 2128.84 1976.63 1889.27 2824.69 2100.93 1892.41 2240.44 2473.90 2617.80 3292.14 2367.06 1961.49 1762.01 1580.84 2249.08

95 2490.03 2419.13 2384.91 2225.65 2990.11 2578.25 2282.33 2763.37 3063.09 3531.91 3781.79 3733.87 2978.99 2622.73 2300.41 3093.51

99 5689.88 3836.68 3540.00 3793.87 4093.54 3781.32 3649.81 4217.38 5048.77 9670.76 4951.22 4543.63 5295.62 4146.08 6728.31 5002.82

Mean MPCE 1392.23 1339.43 1324.14 1352.02 1560.13 1294.87 1292.03 1372.30 1509.75 1519.73 1927.07 1665.15 1296.45 1345.21 1314.99 1460.10Note and Source: Same as in Table 4.1a.

77

Figure 4.1: Mean Levels of Living across Rural and Urban Districts:Uttarakhand

Nainital

1,00

01,

500

2,00

02,

500

3,00

0D

istri

ctw

ise

mea

n M

PCE

Rural & Urban SectorsLevels of Living: Uttarakhand

Rural Urban

Note: The estimates of MPCEs are at current local prices.

2. Urban Sector

(i) The average MPCE in urban Uttarakhand was Rs 2403.53 in 2012/13. The

price-adjusted district wise average MPCE ranged from the minimum of Rs

1951.26 (Champawat) to Rs 2791.77 (Nainital Hills) (Table 4.2b).

(ii) The marginal distribution of rural mean MPCE across districts is negatively

skewed (Figure 1); thus, the urban distributional profile is the reverse of the

one observed for the rural sector across districts.

(iii) Champawat, Udham Singh Nagar, Dehradun Hills, Nainital and Pauri

Garhwalbelong to the poorest quartile group; Chamoli, Pithoragarh, and

Uttarkashi form the lower middle quartile group; Rudraprayag, Dehradun,

Bageshwar, and Almora belong to the upper middle quartile group; Tehri

Garhwal, Haridwar, and Nainital Hills form the richest quartile group in the

urban sector (Table 4.7)

78

(iv) The poorest of the district-wise poorest sample observation across districts is

located in Nainital Hills (Rs 489.39) while the richest among the district-wise

poorest is found in Tehri Garhwal (Rs 1183.971). Conversely, the poorest of

among the district-wise richest is located in Rudraprayag (Rs 5327.95) while

the richest among the rich is found in Haridwar (Rs 20563.76) (Table 4.2a)

(v) MPCE (at current local prices) distribution varied across districts with respect

to its different dimensions. While the range between the richest and the

poorest was the minimum in Rudraprayag (Rs4709.97), inter-quartile range

was the minimum in Udham Singh Nagar (Rs 803.07) and standard deviation

in Rudraprayag (Rs 934.02). The range between the poorest and the richest

was the maximum in Haridwar (Rs19886.30), inter-quartile range was the

maximum in Nainital Hills (Rs 1884.98) and standard deviation in Haridwar

(Rs 2386.51) (Table 4.2a).

79

Table 4.2a: Summary Profiles of District wise Consumer Expenditure Distribution: Urban Uttarakhand 2011/12(At current local prices)

Percentiles Uttarkashi Chamoli Rudraprayag Tehri Garhwal Dehradun Pauri Garhwal Pithoragarh Bageshwar Almora Champawat NainitalUdham SinghNagar Haridwar

NainitalHills

DehradunHills State

1 897.43 753.41 617.98 1460.79 876.32 706.68 689.13 865.59 898.9 635.33 558.34 700.83 901.14 817.64 859.73 700.83

5 1149.49 946.34 936.68 1533.37 1019.56 766.93 788.33 938.53 1001.79 645.36 848.38 835.26 1027.26 948.17 918.87 942.94

10 1397.63 1210.01 1086.65 1617.16 1165.21 942.94 914.89 1161.25 1134.39 645.36 1072.08 1028.63 1191.53 1213.21 1091.95 1063.83

25 1760.87 1496.02 1941.67 1788.44 1367.19 1330.62 1396.33 1544.37 1434.6 765.61 1258.52 1141.46 1452.79 1488.02 1437.61 1286.47

50 2104.89 1977.17 2407.24 2163.41 1888.95 1885.85 2138.51 1973.13 2383.02 1128.6 1714.93 1437.14 2017.5 2452.72 1782.9 1800.36

75 2875.13 3034.5 3023.51 3423.86 3033.34 2622.73 2768.3 3070.37 2829.53 2601.4 2863.38 1944.53 3249.19 3373 2319.52 2813.36

90 3406.86 4486.22 3458.38 4518.53 4784.54 3426.74 4194.45 4111.64 3744.84 4956.75 3139.11 2858.79 5744.27 6228.15 2929.79 4105.4

95 4496.38 4784.09 4003.65 5396.36 6210.64 4370.16 5295.67 5874.13 4803.21 6955.9 4029.51 4049.1 7483.3 7687.34 3160.64 5855.14

99 7077.06 6370.11 5327.95 6137.6 12778 7826.27 7228.65 7282.03 10773.79 9368.43 7307.04 16339.63 11404.82 9322.93 7250.12 11774.45

Smallest 507.22 753.41 617.98 1183.97 695.68 535.34 650.65 724.89 687.04 608.51 512.87 519.92 677.46 489.39 553.23 489.39

Largest 11473.04 7293.52 5327.95 8106.3 13730.12 8970.35 7228.65 7286.14 10773.79 9763.92 9215.23 19318.37 20563.76 13263.66 9666.03 20563.76

Range 10965.82 6540.11 4709.97 6922.33 13034.44 8435.01 6578.00 6561.25 10086.75 9155.41 8702.36 18798.45 19886.30 12774.27 9112.80 20074.37

IQR 1114.26 1538.48 1081.84 1635.42 1666.15 1292.11 1371.97 1526.00 1394.93 1835.79 1604.86 803.07 1796.40 1884.98 881.91 1526.89

Mean 2420.49 2440.32 2431.74 2699.01 2591.22 2144.58 2328.19 2490.56 2422.42 2037.36 2124.77 1970.87 2869.94 2953.91 1987.12 2403.53

Std. Deviation 1104.34 1317.31 934.02 1248.92 1982.96 1244.41 1417.07 1357.98 1313.73 1944.98 1197.09 2158.10 2386.51 2041.22 954.37 2002.77

Skewness 3.05 1.26 0.33 1.42 2.90 1.95 1.52 1.39 2.88 2.24 2.05 4.83 3.11 1.85 2.77 3.58

Kurtosis 19.82 4.12 3.40 4.58 13.68 8.78 5.44 4.73 17.93 7.91 9.45 28.70 17.23 6.77 17.30 20.81

Source: Same as in Table 4.1

80

Table 4.2b: Summary Profiles of District wise Consumer Expenditure Distribution: Urban Uttarakhand 2011/12

(At current average state level urban prices)

Percentiles Uttarkashi Chamoli Rudraprayag Tehri Garhwal Dehradun Pauri Garhwal Pithoragarh Bageshwar Almora Champawat NainitalUdhamSingh Nagar Haridwar

NainitalHills

DehradunHills State

1 888.38 733.03 620.63 1472.50 830.92 707.03 704.40 877.37 938.36 608.48 549.17 710.89 863.92 772.76 892.89 700.83

5 1137.90 920.74 940.70 1545.67 966.74 767.31 805.80 951.30 1045.76 618.09 834.44 847.25 984.83 896.12 954.31 942.94

10 1383.53 1177.27 1091.31 1630.13 1104.84 943.40 935.16 1177.06 1184.18 618.09 1054.46 1043.40 1142.32 1146.62 1134.07 1063.83

25 1743.11 1455.54 1950.00 1802.78 1296.36 1331.27 1427.27 1565.39 1497.57 733.25 1237.84 1157.85 1392.78 1406.34 1493.06 1286.47

50 2083.66 1923.68 2417.57 2180.76 1791.09 1886.77 2185.90 1999.99 2487.62 1080.90 1686.75 1457.77 1934.17 2318.09 1851.67 1800.36

75 2846.13 2952.40 3036.48 3451.32 2876.19 2624.01 2829.64 3112.16 2953.73 2491.46 2816.33 1972.44 3114.99 3187.85 2408.99 2813.36

90 3372.50 4364.84 3473.22 4554.77 4536.66 3428.42 4287.39 4167.60 3909.22 4747.27 3087.53 2899.83 5507.01 5886.28 3042.80 4105.4

95 4451.03 4654.65 4020.83 5439.64 5888.88 4372.30 5413.02 5954.08 5014.05 6661.93 3963.30 4107.22 7174.21 7265.37 3282.55 5855.14

99 7005.67 6197.76 5350.81 6186.82 12116.00 7830.10 7388.83 7381.14 11246.70 8972.50 7186.98 16574.18 10933.75 8811.18 7529.77 11774.45

Mean 2396.08 2374.30 2442.17 2720.65 2456.98 2145.62 2379.78 2524.46 2528.75 1951.26 2089.85 1999.16 2751.40 2791.77 2063.77 2403.53Source: Same as in Table 4.1

81

III. RELATIVE INEQUALITY: DISTRICT-WISE NOMINAL CONSUMPTIONDISTRIBUTION

The district-wise estimates of the extent of inequality as measured by different estimators by

rural and urban sectors are presented in Tables 4.3 (Fig. 4.2).

Rural Sector

There is no consistent relation between levels of mean MPCE and extent of inequality in the

rural sector. The pairwise correlation between estimates of Lorenz ration and rural MPCE is

statistically insignificant (0.32). For instance, the extent of inequality in consumption

distribution is the highest in Haridwar even though it is the third poorest district in terms of

mean MPCE, belying the Kuznets inverted-U hypothesis (Table 4.6). The distribution of

estimates of Lorenz ratios across districts is negatively skewed (Fig. 4.2); the upper middle

quartile groups of districts (in terms of Lorenz ratios) constitute a dense group in a narrow

interval. In other words, the extent of inequality in nominal consumption distribution is quite

high in the top half of the districts.

Urban Sector

Estimates of average MPCE and Lorenz ratio do not show any pair wise association. The

pairwise correlation is statistically insignificant (-0.17). Though Champawat is the poorest

district in terms of average MPCE, the extent of relative inequality is the highest in this

district.

83

Table 4.3a: Extent of Inequality in MPCE Distribution: Districts-wise - Rural Uttarakhand (2011/12)

(At current local prices)

Inequality Measures Uttarkashi Chamoli RudraprayagTehriGarhwal Dehradun Pauri Garhwal Pithoragarh Bageshwar Almora

Champawat Nainital

UdhamSinghNagar Haridwar

NainitalHills

DehradunHills STATE

Relative mean deviation 0.209 0.161 0.156 0.140 0.202 0.203 0.159 0.195 0.192 0.205 0.201 0.173 0.214 0.148 0.133 0.191

Coefficient of variation 0.816 0.469 0.435 0.446 0.592 0.554 0.468 0.570 0.535 0.771 0.554 0.527 0.695 0.410 0.567 0.598

Standard deviation of logs 0.499 0.381 0.393 0.338 0.474 0.474 0.409 0.468 0.449 0.476 0.486 0.417 0.499 0.359 0.341 0.460

Gini coefficient 0.297 0.226 0.222 0.198 0.273 0.275 0.225 0.272 0.264 0.293 0.276 0.245 0.299 0.207 0.198 0.270

Mehran measure 0.392 0.301 0.307 0.261 0.366 0.370 0.306 0.365 0.352 0.372 0.374 0.326 0.389 0.286 0.262 0.359

Piesch measure 0.250 0.189 0.179 0.166 0.227 0.228 0.184 0.225 0.220 0.253 0.226 0.204 0.254 0.167 0.166 0.226

Kakwani measure 0.084 0.048 0.046 0.039 0.068 0.068 0.049 0.068 0.063 0.084 0.069 0.057 0.084 0.040 0.044 0.068

Theil index (GE(a), a = 1) 0.189 0.090 0.083 0.077 0.131 0.128 0.091 0.129 0.119 0.184 0.128 0.109 0.172 0.073 0.098 0.133Mean Log Deviation (GE(a),a = 0) 0.150 0.081 0.080 0.066 0.121 0.120 0.087 0.119 0.110 0.145 0.123 0.097 0.147 0.068 0.075 0.118Entropy index (GE(a), a = -1) 0.150 0.079 0.084 0.062 0.127 0.126 0.093 0.123 0.112 0.135 0.133 0.096 0.146 0.069 0.066 0.120Half (Coeff.Var. squared)(GE(a), a = 2) 0.332 0.110 0.094 0.099 0.175 0.153 0.109 0.162 0.143 0.296 0.153 0.139 0.242 0.084 0.160 0.179Source: Same as in Table 4.1

84

Table 4.3b: Extent of Inequality in MPCE Distribution: District-wise - Urban Uttarakhand (2011/12)(At current local prices)

Inequality Measures Uttarkashi ChamoliRudraprayag

TehriGarhwal Dehradun

PauriGarhwal Pithoragarh Bageshwar Almora

Cham-pawat Nainital

UdhamSinghNagar Haridwar

NainitalHills

DehradunHills STATE

Relative mean deviation 0.150 0.213 0.151 0.183 0.254 0.208 0.222 0.211 0.174 0.328 0.209 0.262 0.272 0.242 0.165 0.257

Coefficient of variation 0.456 0.540 0.384 0.463 0.765 0.580 0.609 0.545 0.542 0.955 0.563 1.095 0.832 0.691 0.480 0.833Standard deviation oflogs 0.389 0.496 0.449 0.402 0.559 0.526 0.565 0.499 0.470 0.735 0.501 0.542 0.609 0.605 0.413 0.576

Gini coefficient 0.213 0.283 0.213 0.238 0.340 0.293 0.314 0.284 0.258 0.436 0.281 0.354 0.369 0.341 0.232 0.351

Mehran measure 0.293 0.383 0.317 0.316 0.436 0.402 0.428 0.385 0.358 0.553 0.384 0.426 0.472 0.453 0.321 0.448

Piesch measure 0.173 0.233 0.161 0.199 0.292 0.239 0.257 0.234 0.207 0.377 0.230 0.318 0.317 0.284 0.188 0.303

Kakwani measure 0.045 0.072 0.045 0.052 0.104 0.077 0.088 0.072 0.063 0.166 0.072 0.124 0.120 0.103 0.051 0.111Theil index (GE(a), a =1) 0.084 0.130 0.076 0.094 0.211 0.143 0.161 0.131 0.119 0.335 0.134 0.308 0.245 0.196 0.095 0.233Mean Log Deviation(GE(a), a = 0) 0.079 0.127 0.087 0.088 0.183 0.141 0.161 0.128 0.113 0.309 0.129 0.218 0.216 0.191 0.089 0.198Entropy index (GE(a), a= -1) 0.083 0.137 0.112 0.087 0.186 0.158 0.184 0.139 0.124 0.349 0.142 0.194 0.226 0.219 0.094 0.202Half (Coeff.Var.squared) (GE(a), a = 2) 0.104 0.145 0.073 0.107 0.292 0.168 0.184 0.148 0.146 0.454 0.158 0.599 0.345 0.238 0.115 0.347Source: Same as in Table 4.1

85

.2.2

5.3

.35

.4.4

5Lo

renz

ratio

Rural and Urban ProfilesLorenz ratio across Districts: Uttarakhand

Rural Urban

Fig. 4.2: Extent of Inequality across Districts: Uttarakhand (2011/12)

IV. DISTRICT-WISE ESTIMATES OF POVERTY

The district-wise estimates of poverty correspondto the average state level poverty line of Rs.

880 per capita per month for the rural sector and Rs. 1082 for the urban sector (vide

methodology recommended by the Tendulkar Committee (GoI, 2014)) (Table 4.4). The

salient findings are as follows:

Less-than one-fifth (17.52 per cent) of the rural population in Uttarakhand lives in sub-

subsistence. This incidence is the minimum in the district of Udham Singh Nagar (9.40 per

cent) and maximum in Pauri Garhwal (29.89 per cent). As regards urban deprivation, the

state level average incidence is 11.51 per cent. It ranged from the minimum of nil in Tehri

Garhwal to the maximum of nearly half of the urban population (48.70 per cent) in

Champawat. The average incidence of poverty for the state as a whole (rural and urban

combined) is 16 per cent. It ranged from 9.22 per cent in Dehradun to 28.50 per cent in Pauri

Garhwal.

86

Table 4.4: District-wise Estimates of Poverty based on uniform state-level poverty lines:Uttarakhand (2011/12) (%)

NSS Code District Rural Urban Combined1 Uttarkashi 19.97 2.02 18.982 Chamoli 13.09 8.15 12.473 Rudraprayag 19.26 7.06 18.754 Tehri Garhwal 10.85 0.00 10.155 Dehradun 11.87 7.05 9.4215 Dehradun Hills 6.73 9.45 6.77

Dehradun Combined 11.16 7.06 9.226 Pauri Garhwal 29.89 20.66 28.507 Pithoragarh 16.74 15.97 16.648 Bageshwar 28.04 6.99 27.379 Almora 21.89 6.35 20.7310 Champawat 18.31 48.70 23.0312 Udham Singh Nagar 9.40 18.93 13.1313 Haridwar 23.50 5.89 19.4911 Nainital 10.03 10.04 10.0314 Nainital Hills 13.75 6.19 12.57

Nainital Combined 11.53 9.42 1086Uttarakhand 17.52 11.51 16.03

Note: The districtwise estimates of poverty are based on uniform application of state level poverty line Rs 880for the rural sector and Rs 1082 for the urban sector (vide Tendulkar methodology (GoI 2014))

These estimates do not account for inter-district variations in prices and hence, cost of living.

In order to obtain a realistic profile of district-wise poverty, there is a need to adjust state-

level poverty lines for rural and urban sectors for district-wise price variation. We have made

a limited attempt to address this need by estimating spatial cost of living indices based on

household budget data at the district level and corresponding adjustments in poverty lines

across districts (Tables (iii) and (iv) in the Annexure). The distribution of spatial cost living

indices across districts is negatively skewed with respect to both the lowest and lower middle

quartile groups in the rural sector. A regards the urban sector, the distribution is positively

skewed for the middle half of the quartile groups (Fig. 4.3).The district-wise poverty lines

corresponding to that at the state level are presented in Table 4.5 and the corresponding

poverty estimates in Table 4.6. Summary profiles of deprivation across districts are presented

in Table 4.7

87

Fig. 4.3: Spatial Cost of Living Indices (Fisher Index) across Districts: Uttarakhand

(2011/12).9

.95

11.

051.

1C

ost o

f Liv

ing

Inde

x

Rural and Urban ProfilesSpatial Cost of Living Indices across Districts: Uttarakhand

Rural Urban

Table 4.5: District wise Estimates of Price-adjusted Poverty Lines: Uttarakhand2011/12 (Rs.)

NSS Code District Rural Urban1 Uttarkashi 903.58 1093.032 Chamoli 937.23 1112.093 Rudraprayag 918.70 1077.384 Tehri Garhwal 881.75 1073.395 Dehradun 958.30 1141.126 Pauri Garhwal 919.71 1081.477 Pithoragarh 867.91 1058.548 Bageshwar 853.74 1067.479 Almora 803.11 1036.5010 Champawat 916.03 1129.7511 Nainital 869.71 1100.0812 Udham Singh Nagar 865.72 1066.6913 Haridwar 913.83 1128.6214 Nainital Hills 899.68 1144.8415 Dehradun Hills 942.58 1041.82

State 880.00 1082.00Note: The district specific poverty lines are obtained with price adjustments for the state-level poverty linesrecommended by the Tendulkar Committee (GoI 2014). Price adjustments are made using Fisher spatial cost ofliving indices for the food basket across districts.

88

Table 4.6: District-wise Estimates of Poverty: Uttarakhand (2011/12) (%)

NSS Code District Rural Urban Combined1 Uttarkashi 21.50 2.30 20.442 Chamoli 22.10 8.60 20.373 Rudraprayag 21.30 7.10 20.714 Tehri Garhwal 10.80 0.00 10.155 Dehradun 13.24 7.05 10.0915 Dehradun Hills 17.41 7.81 17.26

Dehradun Combined 13.81 7.06 10.626 Pauri Garhwal 30.90 20.7 29.367 Pithoragarh 15.80 16.0 15.858 Bageshwar 24.60 7.0 24.019 Almora 14.30 5.2 13.6210 Champawat 22.10 50.60 26.5512 Udham Singh Nagar 8.90 18.40 12.6013 Haridwar 27.60 5.90 22.6311 Nainital 7.91 10.04 8.7514 Nainital Hills 18.18 7.28 16.48

Nainital Combined 12.05 9.60 11.27Uttarakhand 17.5 11.5 16.88

Note: The estimates of poverty correspond to the district-specific poverty lines in Table 4.5.

Deprivation: Salient Features

The salient features of the deprivation profiles presented in Table 4.6 and Figures 1 to 4 are

as follows:

Rural Sector:

(i) Incidence of rural poverty is generally the lowest in the richest quartile group of

districts. Other indicators of deprivation like food share in household budget and cost

of living also report a favourable profile of these districts. In sum, the best-off

threedistricts, namely Dehradun, Udham Singh Nagar and Nainital seem to be doing

reasonably well in terms of all the indicators under review.

(ii) The marginal distribution of incidence of rural poverty across districts is nearly

symmetric while those pertaining to extent of inequality and cost of living are highly

negatively skewed ones. This would mean that at least half of the districts are densely

located with respect to high extent of relative inequality and cost of living.

89

Champawat

010

2030

4050

Hea

dcou

nt ra

tio (%

)

Rural and Urban ProfilesIncidence of Poverty across Districts: Uttarakhand

Rural Urban

Urban Sector:

1. In general, there is an inverse association between district-wise mean MPCE and

incidence of poverty.

2. Unlike the rural profiles, the marginal distributions the incidence of poverty, extent of

inequality and cost of living are positively skewed ones. This would mean that half of

the districts are densely located in a narrow range at the lower end of the distributions

of incidence of poverty, extent of relative inequality and cost of living.

Figure 4.4: Incidence of Poverty across Districts: Uttarakhand (2011/12)

91

Table 4.7: Poverty Profiles across Districts: Rural and Urban Uttarakhand (2011/12)

Rural Uttarakhand Urban UttarakhandQuartileGroup District

RuralMPCE

Lorenzratio

Incidence ofpoverty

SpatialCLI

Foodshare

QuartileGroup District

UrbanMPCE

Lorenzratio

Incidence ofpoverty

Spatial CLIUrban

Foodshare

Poorest

Pithoragarh 1292.03 0.22 15.83 0.99 54.02

Poorest

Champawat 1951.26 0.44 50.64 1.04 41.85

Pauri Garhwal 1294.87 0.28 30.90 1.05 49.06Udham SinghNagar 1999.16 0.35 18.36 0.99 50.20

Haridwar 1296.45 0.30 27.57 1.04 49.17DehradunHills 2063.77 0.23 7.81 0.96 43.38

DehradunHills 1314.99 0.20 17.41 1.07 49.74 Nainital 2089.85 0.28 10.04 1.02 46.27

Lowermiddle

Rudraprayag 1324.14 0.22 21.31 1.04 49.95

Lowermiddle

Pauri Garhwal 2145.62 0.29 20.66 1.00 39.77

Chamoli 1339.43 0.23 22.06 1.07 50.29 Chamoli 2374.30 0.28 8.59 1.03 42.91

Nainital Hills 1345.21 0.21 18.18 1.02 51.39 Pithoragarh 2379.78 0.31 15.97 0.98 41.44

Uppermiddle

Tehri Garhwal 1352.02 0.20 10.85 1.00 52.15

Uppermiddle

Uttarkashi 2396.08 0.21 2.30 1.01 39.80

Bageshwar 1372.30 0.27 24.56 0.97 55.62 Rudraprayag 2442.17 0.21 7.06 1.00 45.34

Uttarkashi 1392.23 0.30 21.50 1.03 48.52 Dehradun 2456.98 0.34 7.05 1.05 37.56

Almora 1509.75 0.26 14.30 0.91 49.82 Bageshwar 2524.46 0.28 6.99 0.99 45.92

Champawat 1519.73 0.29 22.12 1.04 48.26 Almora 2528.75 0.26 5.18 0.96 45.92

Richest

Dehradun 1560.13 0.27 13.24 1.09 43.06

Richest

Tehri Garhwal 2720.65 0.24 0.00 0.99 40.53Udham SinghNagar 1665.15 0.24 8.89 0.98 49.74 Haridwar 2751.40 0.37 5.89 1.04 36.04

Nainital 1927.07 0.28 7.91 0.99 40.33 Nainital Hills 2791.77 0.34 7.28 1.06 35.29

State 1460.10 0.270 17.50 1.00 48.85 State 2403.53 0.351 11.50 1.00 41.21Notes: Lowest welfare quartile group:

Lower middle welfare quartile group:

Upper middle welfare quartile group:

Top welfare quartile group:

Note: 1. Estimates based on pooled central and state samples2. Districts arranged in ascending order of mean MPCE by sector.

92

V. RURAL-URBAN PROFILE

1. Urban mean MPCE exceeds that of rural in all the districts. Rural-urban disparity

in mean MPCE is the lowest in Nainital (108.45), which is the richest in terms of

rural mean MPCE but poorest fourth in terms urban mean MPCE. MPCE disparity

is the highest is Haridwar (212.13), which is the third poorest rural district but

second richest district urban one. Finally, the median disparity in Uttarakashi

(172.10) falls in the upper middle quartile group in both rural and urban sectors

(Table 4.8). In other words, failure of urban development to catch up with the

rural prosperity seems to have led to a development process far removed from

theKuzents’ inverted-U postulate.

2. Extent of income/consumption inequality is generally higher in the urban than in

the rural sector. However, the profile is the reverse in the districts of Uttarakashi,

Rudraprayag and Almora. Among these three, Almora is the only district which

falls in the same upper middle quartile group in both the rural and urban sectors.

Uttarakashi falls in the rural lowest middle quartile group but urban topmost

quartile group while Rudraprayag falls in the rural lower middle quartile group but

urban upper middle quartile group. In other words, it appears that factors other

than level income/consumption could be influencing the relative inequality

profiles in the rural and urban districts of Uttarakhand. Rural-urban disparity is the

maximum in Nainital Hills and is one of the highest even the district of

Pithoragarh with the poorest rural district.

3. Incidence of urban poverty is generally less than that of rural one. However, the

profile is the reverse one in the majority of the districts, viz., Dehradun, Dehradun

Hills, Pauri Garhwal, Almora, Uttarkashi, Chamoli, Bageshwar, Rudraprayag,

Nainital Hills and Haridwar. As a result, we find rural poverty to be less than

urban one in the state as a whole.

4. Relative rural-urban spatial cost of living too throws up a picture different from

the conventional perception. In a majority of the districts, the rural spatial cost of

living exceeds the urban one.

5. Nainital is the only district where the household budget share of food exceeds the

corresponding parameter for the rural one.

93

Table 4.8: Rural-Urban Disparities in Economic Profiles

Rural sector Urban sector Rural-urban disparity

DistrictMeanMPCE

Lorenzratio

Incidence ofpoverty

SpatialCLI

Foodshare

MeanMPCE

Lorenzratio

Incidence ofpoverty

Spatial CLIUrban

Foodshare

MeanMPCE

Lorenzratio

Incidence ofpoverty

Spatial CLIUrban

Foodshare

Almora 1509.75 0.26 14.30 0.91 49.82 2528.75 0.26 5.18 0.96 45.92 167.49 97.74 36.23 104.97 92.16

Bageshwar 1372.30 0.27 24.56 0.97 55.62 2524.46 0.28 6.99 0.99 45.92 183.96 104.53 28.46 101.69 82.55

Chamoli 1339.43 0.23 22.06 1.07 50.29 2374.30 0.28 8.59 1.03 42.91 177.26 125.18 38.94 96.51 85.33

Champawat 1519.73 0.29 22.12 1.04 48.26 1951.26 0.44 50.64 1.04 41.85 128.39 148.90 228.92 100.31 86.70

Dehradun 1560.13 0.27 13.24 1.09 43.06 2456.98 0.34 7.05 1.05 37.56 157.49 124.49 53.29 96.85 87.23DehradunHills 1314.99 0.20 17.41 1.07 49.74 2063.77 0.23 7.81 0.96 43.38 156.94 117.12 44.84 89.89 87.21

Haridwar 1296.45 0.30 27.57 1.04 49.17 2751.40 0.37 5.89 1.04 36.04 212.23 123.21 21.37 100.45 73.29

Nainital 1927.07 0.28 7.91 0.99 40.33 2089.85 0.28 10.04 1.02 46.27 108.45 102.00 126.92 102.87 114.72

Nainital Hills 1345.21 0.21 18.18 1.02 51.39 2791.77 0.34 7.28 1.06 35.29 207.53 164.84 40.02 103.49 68.66PauriGarhwal 1294.87 0.28 30.90 1.05 49.06 2145.62 0.29 20.66 1.00 39.77 165.70 106.53 66.86 95.64 81.08

Pithoragarh 1292.03 0.22 15.83 0.99 54.02 2379.78 0.31 15.97 0.98 41.44 184.19 139.67 100.91 99.19 76.72

Rudraprayag 1324.14 0.22 21.31 1.04 49.95 2442.17 0.21 7.06 1.00 45.34 184.43 95.99 33.11 95.38 90.78TehriGarhwal 1352.02 0.20 10.85 1.00 52.15 2720.65 0.24 0.00 0.99 40.53 201.23 120.26 0.00 99.01 77.72Udham SinghNagar 1665.15 0.24 8.89 0.98 49.74 1999.16 0.35 18.36 0.99 50.20 120.06 144.64 206.52 100.21 100.92

Uttarkashi 1392.23 0.30 21.50 1.03 48.52 2396.08 0.21 2.30 1.01 39.80 172.10 71.60 10.68 98.38 82.02

State 1460.10 0.270 17.50 1.00 48.85 2403.53 0.351 11.50 1.00 41.21 164.61 130.00 65.71 100.00 84.36

Minimum 1292.03 0.198 7.91 0.91 40.33 1951.26 0.213 0.00 0.96 35.29 108.45 71.60 0.00 89.89 68.66

Quarile1 1319.57 0.223 13.77 0.99 48.79 2117.74 0.248 6.44 0.99 39.79 157.21 103.27 30.78 96.68 79.40

Quartile 2 1352.02 0.264 18.18 1.03 49.74 2396.08 0.284 7.28 1.00 41.85 172.10 120.26 40.02 99.19 85.33

Quartile3 1514.74 0.275 22.09 1.04 50.84 2526.60 0.340 13.01 1.04 45.63 184.31 132.42 83.89 101.07 89.00

Maximum 1927.07 0.299 30.90 1.09 55.62 2791.77 0.436 50.64 1.06 50.20 212.23 164.84 228.92 104.97 114.72Note:1.Districts arranged in alphabetical order.2. Rural-urban disparity is measured as the ratio urban to rural parameter/variable valuesKey:Lowest welfare quartile group: Lower middle welfare quartile group:Upper middle welfare quartile group: Top welfare quartile group:

94

VI. INCIDENCE OF POVERTY ACROSS HILLS AND PLAINS

There is a general perception that the hilly regions of Uttarakhand are economically

backward and poor. This is one reason which has motivated migration, both intra- and inter-

state migration, from these regions. The price-adjusted district-wise estimates of poverty by

this hill/plain classification corroborate this perception (Table 4.9).However, the differences

appear marginal; this could be because of inward remittances, which could have insulated the

poor against the burden of deprivation to some extent (Mamgain and Reddy, 2016).

Table 4.9: Estimates of Poverty by Hills and Plains: Uttarakhand: 2011/12

Region Rural Urban Combined

Hills Total 19.59 14.91 19.12

Plain total 17.70 10.67 15.15

State Total 18.68 11.41 16.88

Note: These estimate are based on district-wise price-adjusted poverty lines. Hence the rural and urban estimateswould not tally with those in Table 4.10 which are based on uniform application of state level poverty lineacross districts in rural and urban sectors.

The social group profile of deprivation across hills and plains in rural and urban Uttarakhand

reveal the following features (Table 4.10). For reasons like statistical robustness, we avoid

discussing the findings for the STs. As regards the remaining three social groups, the salient

findings are as follows:

(i) Headcount ratio estimates: The SCs are the most deprived across both the hills

and the plains in the rural sector; the SCs are followed by the OBCs and the other

social groups. As regards the urban profile, the OBCs are the most deprived

followed by the SCs and the ‘Others’ across hills and plains.

(ii) Poverty gap estimates: The profile remains broadly the same as that revealed by

headcount ratio estimates for both the hills and the plains in both rural and urban

Uttarakhand.

(iii) Severity of poverty: Severity is the highest among the SCs followed by other and

the OBCS in the hills and the highest among the OBCs followed by the SCs and

the other in the plains in rural Uttarakhand. As regards the urban sector, severity is

the highest among the OBCs, followed by the SCs and the ‘Others’ in the hills and

the highest among the OBCS, followed by the ‘Others’ and the SCs in the plains.

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Table 4.10: Estimates of Poverty (Incidence, depth and severity) across social groups byHills and Plains: Uttarakhand: 2011/12

Region

Rural Urban

STs SCs OBCs Others Total ST SC OBC Others Total

Hills Total

Head-count ratio (%) 15.32 27.85 16.52 15.49 18.9 38.1 17.6 27.36 10.22 14.67

Poverty gap index (%) 0.98 6.07 2.48 2.16 3.18 11.5 2.86 4.31 2.1 2.93

Squared poverty gap index (%) 0.14 1.96 0.49 0.52 0.89 4.16 0.71 0.97 0.57 0.81

Plains Total

Head-count ratio (%) 18.58 25.5 21.52 3.74 16.03 1.08 7.44 21.09 6.95 10.85

Poverty gap index (%) 4.38 5.18 5.21 0.50 3.48 0 0.98 2.69 0.88 1.38

Squared poverty gap index (%) 1.91 1.22 1.54 0.10 1.00 0 0.16 0.72 0.21 0.34

Note: These estimates correspond to price unadjusted state level poverty lines for rural and urban Uttarakhand(Rs 880 and Rs 1082 respectively).

VII. DEPRIVATION AND ITS DETERMINANTS

This section seeks to explain the district wise estimates of poverty in rural and urban

Uttarakhand in terms of conventional explanatory variables like mean MPCE, extent of

inequality, and cost of living. However, only mean MPCE and extent of inequality turn out to

be statistically significant explanatory variables (Table 4.11).

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Table 4.11:Poverty and its Determinants

.

_cons 48.78412 63.77771 0.76 0.460 -91.58968 189.1579 cli -17.66612 73.76276 -0.24 0.815 -180.0169 144.6846 lrurban 122.4251 36.07067 3.39 0.006 43.03406 201.8161 mpceurban -.0234585 .0070432 -3.33 0.007 -.0389605 -.0079566 povertyurban Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 2072.9544 14 148.068172 Root MSE = 6.5093 Adj R-squared = 0.7138 Residual 466.08003 11 42.3709118 R-squared = 0.7752 Model 1606.87437 3 535.624791 Prob > F = 0.0007 F( 3, 11) = 12.64 Source SS df MS Number of obs = 15

. regress povertyurban mpceurban lrurban cli

. *(4 variables, 15 observations pasted into data editor)

_cons 12.31766 23.93328 0.51 0.617 -40.35913 64.99444 rcli 21.63677 20.06838 1.08 0.304 -22.53343 65.80697 lorenzratio 113.8089 26.30278 4.33 0.001 55.91687 171.7009mpceatstatelevelprices -.0310628 .0055818 -5.57 0.000 -.0433482 -.0187774 incidenceofpoverty Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 632.12181 14 45.1515578 Root MSE = 3.3541 Adj R-squared = 0.7508 Residual 123.752296 11 11.2502088 R-squared = 0.8042 Model 508.369513 3 169.456504 Prob > F = 0.0003 F( 3, 11) = 15.06 Source SS df MS Number of obs = 15

. regress incidenceofpoverty mpceatstatelevelprices lorenzratio rcli

VIII. FINDINGS AND RECOMMENDATIONS

The first chapter on an overview of the economy of Uttarakhand is unambiguous in its

presentation of its macroeconomic transition from a slow growth economy into a high-growth

one, cross-sectional profile of disparities in resource endowments, economic opportunities

and hence, economic welfare levels like per capita consumer expenditure and incidence of

poverty. Empirical evidence on levels of living and deprivation provide enough evidence of

the State’s achievements in this respect. Growth in real consumption (price adjusted average

per capita MPCE of 58%) in both the rural and urban sectors is higher than those in the states

of Himachal Pradesh and Uttar Pradesh and in the nation as a whole (Table 3.4). Percentage

reduction in rural poverty is also the highest while the urban one has almost reached the

97

single-digit level. How far these changes are reflected in real outcome indicators like

measures of health status, say, of children? Available estimates for 2005/06 (Table 4.9) show

that Uttarakhand was doing much better than the nation as a whole on these indicators. As

regards wasting and under-weight its performance in 2005/06 was comparable to that of

Himachal Pradesh. Recent evidence for the year 2015/16 speaks of a sustained improvement

in health indicators.9 Stunting declined from 44.4 per cent in 2005/06 to 33.5 per cent in

2015/16 while the decline at the national level was from 48 per cent to 38.4 per cent between

the same two points of time. Wasting increased in both Uttarakhand and India as a whole: it

increased from 18.8 per cent to 19.5 per cent in Uttarakhand and from 19.8 per cent to 21.0

per cent in India as a whole. However, there was good improvement in terms of proportion

children underweight. It declined from 38 per cent to 26.6 per cent in Uttarakhand as against

from 42.5 per cent to 35.7 per cent in the nation as a whole.

However, the cross sectional results across districts presented in this chapter do not really

tally with the descriptions provided in the overview profile. For instance, Haridwar falls in

the poorest quartile group in terms of rural MPCE, extent of inequality in consumer

expenditure distribution and incidence of poverty even though one would expect it in the

richest quartile group because of its rich resource endowments and opportunities as a district

in the plains. Similarly, Almora falls in the upper middle quartile group in terms of MPCE,

extent of inequality, incidence of poverty, food share in total consumer expenditure

andlowest quartile group in terms of cost of living. The urban profile too corroborates this

kind of mismatch. How do we explain this mismatch? One critical explanation could be in

terms of migration between the hilly districts and the plain ones, state intervention in

stabilizing prices through the public distribution system, state role in assured employment

(about 25 per cent of the employment is regular and government oriented ones). In other

words, the evaluation of the land and labour markets coupled with state intervention in

providing assured income seems to have played a critical role in pursuit of inclusive growth

of Uttarakhand.

9Source: Summary reports available at http://rchiips.org/nfhs/pdf/NFHS4/UT_FactSheet.pdf

98

Annexure I

Table (i): District-wise Sample Household SizeCode District

Rural Urban AllState

Central

Pooled

State

Central

Pooled

State

Central

Pooled

1 Uttarkashi 64 64 128 32 32 64 96 96 1922 Chamoli 57 64 121 32 32 64 89 96 1853 Rudraprayag 56 64 120 32 32 64 88 96 1844 Tehri Garhwal 96 96 192 32 32 64 128 128 2565 Dehradun 88 88 176 96 95 191 184 183 3676 Pauri Garhwal 96 96 192 64 64 128 160 160 3207 Pithoragarh 64 64 128 32 32 64 96 96 1928 Bageshwar 64 64 128 32 32 64 96 96 1929 Almora 96 96 192 32 32 64 128 128 25610 Champawat 32 32 64 32 32 64 64 64 12811 Nainital 64 64 128 64 64 128 128 128 256

12Udham SinghNagar 96 96 192 96 96 192 192 192 384

13 Haridwar 96 96 192 96 96 192 192 192 38414 Nainital Hills 32 32 64 32 32 64 64 64 12815 Dehradun Hills 32 32 64 32 32 64 64 64 128

Uttarakhand1033 1048 2081 736 735 1471

1769 1783 3552

Table (ii) : District-wise Sample Person Size

Code DistrictRural Urban All

State

Central

Pooled

State

Central

Pooled

State

Central

Pooled

1 Uttarkashi 282 273 555 122 114 236 404 387 7912 Chamoli 299 283 582 128 124 252 427 407 8343 Rudraprayag 216 267 483 113 108 221 329 375 7044 Tehri Garhwal 402 424 826 94 120 214 496 544 10405 Dehradun 414 433 847 421 414 835 835 847 16826 Pauri Garhwal 357 416 773 290 275 565 647 691 13387 Pithoragarh 241 271 512 123 123 246 364 394 7588 Bageshwar 260 277 537 133 130 263 393 407 8009 Almora 421 427 848 114 122 236 535 549 108410 Champawat 168 165 333 148 122 270 316 287 60311 Nainital 317 308 625 308 295 603 625 603 1228

12Udham SinghNagar 492 469 961 445 459 904 937 928 1865

13 Haridwar 590 507 1097 426 411 8371016 918 1934

14 Nainital Hills 159 196 355 135 121 256 294 317 61115 Dehradun Hills 236 172 408 145 97 242 381 269 650

Uttarakhand4854 4888 9742

3145 3035 6180

7999 7923 15922

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Table (iii) : Spatial Cost of Living Indices, Poverty lines and Ratios across Districts :Rural Uttarakhand

NSSCode

Name ofDistrict

PaascheIndex(P)

LaspeyresIndex (L)

FisherIndex(F)

PovertyLine HCR

1 Uttarkashi 1.023 1.031 1.027 903.6 21.52 Chamoli 1.071 1.059 1.065 937.2 22.13 Rudraprayag 1.044 1.044 1.044 918.7 21.34 Tehri Garhwal 1.006 0.998 1.002 881.7 10.85 Dehradun 1.084 1.094 1.089 958.3 13.26 Pauri Garhwal 1.048 1.042 1.045 919.7 30.97 Pithoragarh 0.986 0.987 0.986 867.9 15.88 Bageshwar 0.963 0.978 0.970 853.7 24.69 Almora 0.909 0.916 0.913 803.1 14.310 Champawat 1.056 1.026 1.041 916.0 22.111 Nainital 0.987 0.990 0.988 869.7 7.9

12Udham SinghNagar 0.986 0.981 0.984 865.7 8.9

13 Haridwar 1.042 1.035 1.038 913.8 27.614 Nainital Hills 1.022 1.023 1.022 899.7 18.215 Dehradun Hills 1.088 1.054 1.071 942.6 17.4

Table (iv): Spatial Cost of Living Indices, Poverty lines and Ratios across Districts :Urban Uttarakhand

NSS Code Name of District PaascheIndex (P)

LaspeyresIndex (L)

FisherIndex (F)

PovertyLine HCR

1 Uttarkashi 1.010 1.011 1.010 1093.0 2.32 Chamoli 1.026 1.029 1.028 1112.1 8.63 Rudraprayag 0.995 0.997 0.996 1077.4 7.14 Tehri Garhwal 1.002 0.982 0.992 1073.4 0.05 Dehradun 1.055 1.054 1.055 1141.1 7.16 Pauri Garhwal 1.003 0.996 1.000 1081.5 20.77 Pithoragarh 0.974 0.982 0.978 1058.5 16.08 Bageshwar 0.985 0.988 0.987 1067.5 7.09 Almora 0.963 0.953 0.958 1036.5 5.210 Champawat 1.054 1.034 1.044 1129.7 50.611 Nainital 1.006 1.028 1.017 1100.1 10.012 Udham Singh Nagar 0.997 0.975 0.986 1066.7 18.413 Haridwar 1.047 1.039 1.043 1128.6 5.914 Nainital Hills 1.060 1.056 1.058 1144.8 7.315 Dehradun Hills 0.966 0.96 0.963 1041.8 7.8

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Chapter - VEXPLAINING POVERTY IN THE FRAMEWORK OF

EMPLOYMENT AND ITS QUALITY

I. INTRODUCTION

One of the main reasons of poverty and inequality is the lack of gainful employment

opportunities particularly in developing countries like India. In India the growth of

employment over the years has been less than satisfactory, particularly after the onset of

economic reforms in the early 1990s. Most of the employment opportunities are

characterized with low earnings without any social security (IHD-ISLE, 2014). An

overwhelming majority of workers are labouringin the informal sector at low levels of

productivity, low earnings and in poor working conditions (Kannan, et al. 2017). Such a

scenarioof low quality of employment could hardly induce effective demand for goods and

services for the majority of population across different regions inthe country. Due to lack of

employment opportunities in backward regions, employmentrelated migration of workers has

accelerated over the years (GoI, 2017).Unlike developed countries, the unemployment rates

in India are generally low. The major issue here, however, is underemployment and poor

quality of employment, resulting in poor income levels and higher incidence of poverty

(Kannan, et al. 2017; Papola, 2013). Uttarakhand is no exception to such macro features of

employment growth. However, the sharp rise in regional inequalities in Uttarakhand are also

evidenced in the slow growth in employment opportunities in the hill region of the state,

resulting in widespread outmigration of population from this region in search of employment

(Mamgain and Reddy, 2015). Such migration is largely of longer duration wherein the entire

household tends to migrate out to avoid the drudgeries of life in the inhospitable mountain

terrain. There is hardly any significant diversification in the structure of employment in hill

areas of the state, whereas the plains areas have witnessed reasonable diversification in

favour of non-farm activities.

It is against this backdropthatthischapter attempts to examine in detail the growth and

structural changes in employment in Uttarakhand at a more disaggregated level in Section II.

It points outthat despite a very high economic growth, the structure of employment has not

changed at a desired pace, particularly in the hilly areas. Section III examines the quality of

employment from the perspective of earnings and poverty reduction. It showsthat

101

overdependence of a large majority of workers on low productive agriculture, particularly in

the Hill Region have created a subsistence economy with little to invest in productive

activities. Section IV looks into the demand-side dynamics of employment generation. The

concluding Section V finds very slow pace of structural diversification in employment

particularly in hill districts as a major concern for policy intervention. Though the levels of

absolute deprivation of population in the state are comparatively at a much lower side than

rest of the country, it is the nature and quality of livelihoods that only support a subsistence

economy but certainly not as a modern diversified economy for a large majority of population

living in the state. This Section also cautions that interpretation of results of poverty and

inequality emerging from the previous chapter need to be carefully interpreted from the

perspective of policy interventions. More so, consumption expenditure may not be a holistic

indicator of measuring deprivation of population. Thus, the study calls for measuring poverty

in its multidimensional forms.

II. EMPLOYMENTIN UTTARAKHAND

In Uttarakhand, there were 3.87 million workers10 in 2011, constituting about 38 per cent of

its population. The proportion of working population in the state is far less than Himachal

Pradesh but nearly the same as national average (Figure 5.1). Gender-wise, nearly half of the

male population wasworkingin the state. The corresponding proportion for femaleswas about

27 per cent in 2011. However, the work participation rate (WPR) among male population was

lower in Uttarakhand as compared to the national average (53.3 per cent). In Himachal

Pradesh, the WPR for males as well as females is very high (58.7 per cent for men and 44.8

for women). A fairly high proportion of women in Uttarakhand and other regions of the

country are working as marginal workers. This shows the limited access to employment

opportunities on a fairly longer duration, particularly for women in many states including

Uttarakhand.

10The figure includes main as well as marginal workers. Population Census 2011 defines main workers as thoseworking for more than 180 days in a year. Marginal workers are those working less than six months.

102

Table 5.1: Gender-wise Work Participation Rates in Uttarakhand, 2011 (in %)

Total workers(Main+Marginal) Main workers

Men Women Men Women

Total 49.67 26.68 40.30 16.16

Rural 49.07 32.94 37.58 19.18

Urban 50.98 11.29 46.22 8.74

Source:Primary Census Abstract, Population Census, 2011.


There is wide difference in work participation rate of hill and plain regions of the

state.It is 43.7 per cent for hills region and 33.5 per cent for plains region in 2011. This

difference is primarily due to a very high work participation rate of women in hill region

(50.8 per cent) compared to a mere 14.2 per cent in plains region of the state (Table 2.2 in

chapter 2).

Such difference in work participation rate is observed even at district level

disaggregation WPRs that are found to be higher among hill districts, primarily due to higher

participation of women therein. The WPR tended to increase marginally (less than two

percentage points) in most of the districts of the state between 2001 and 2011 except

Champawat district where it declined by two percentage points during the period. However,

103

itconsiderably improved in Udham Singh Nagar (4.2 percentage points), Dehradun (3.1

percentage points) and Nainital (2.8 percentages points)districts (Figure 5.2).


Similar to Population Census data, NSSO data on employment and unemployment

also show lower workforce participation rates (WFPRs) of population in Uttarakhand in

comparison to Himachal Pradesh and national average, particularly in case of male

population (Figure 5.3). This is seen both in rural and urban areas of Uttarakhand. The low

WFPRs of men may be due to (i) lack of employment opportunities; (ii) higher participation

in education, and (iii) higher incomes of households requiring lesser participation in work.

104

Source:NSSO, 68th Round on Employment and Unemployment, 2011-12.

The higher WPRs of women is not necessarily an indicator of economic well-being as

has been observed in case of Himachal Pradesh or Uttarakhand in Figure 5.3. Rather it may

be due to the nature of livelihood resources available with the households that necessitate

higher participation in work coupled with social recognition of women’s work. For example,

the higher participation of women in hilly districts of Uttarakhand is largely associated with

the backbreaking agriculture and animal husbandry related activities that demand more of

physical work compared to plain areas of the state.

Prevalence of Marginal Workers

Duration of employment along with the earnings and condition of work is one of the

important aspects to understand the employment scenario. According to the estimate based on

census 2011 data, one-fourth of the total workers in Uttarakhand were marginal workers, i.e.

they workedin gainful economic activities for less than 180 days in a year. The proportion of

marginal workers in total workers is found to be more than double among women (39.4 per

cent) than men (18.9 per cent) in the state(Table 5.2). In Tehri Garhwal, Pauri Garhwal and

Champawat districts more than half of women workers were working as marginal workers

despite their low workforce participation rates. In fact, the pace of such marginalization of

women workers in Bageshwar, Tehri Garhwal and Garhwal districts increased substantially

105

whereas it substantially declined in the three plains districts between 2001 and 2011. Across

the hilly and plains districts of Uttarakhand, the ratio of marginal workers among men

workforce was double in the hill districts than that in the plains districts. Simply put, the

proportion of marginal workers increased mostly in the Hill Regionof the state during the

period 2001-2011, indicating marked deterioration in the availability of work for a relatively

longer period during a year.

Table 5.2: District-wise Percentage Share of Marginal Workers in Uttarakhand

District

Person Male Female

2001 2011 2001 2011 2001 2011

Almora 30.0 32.6 24.8 28.2 34.1 36.5

Bageshwar 28.0 36.8 24.7 33.9 30.6 39.5

Chamoli 41.2 36.4 33.7 30.1 48.7 43.1

Champawat 37.7 37.0 24.9 28.4 52.5 50.3

Rudraprayag 25.4 30.2 20.8 28.0 29.2 32.0

Tehri Garhwal 31.5 40.8 20.5 30.0 42.8 51.8

Uttarkashi 15.5 18.4 12.3 15.0 19.2 22.2

Pauri Garhwal 36.4 40.0 27.9 30.8 44.9 50.8

Pithoragarh 37.6 32.8 28.4 29.2 46.6 36.8

Nainital 20.8 21.2 14.5 15.4 34.6 33.7

Hardwar 16.9 14.4 11.8 11.5 48.0 31.9

U. S. Nagar 23.5 23.8 15.4 16.1 54.8 47.1

Dehradun 16.0 16.2 12.5 12.9 31.1 28.6

Uttarakhand 25.9 25.9 17.9 18.9 40.0 39.4

Source: Calculated from Population Census, 2001 and 2011.

III. STRUCTURE AND QUALITY OF EMPLOYMENT

1. Sectoral Composition of Employment

Sectoral composition of employment and changes therein is one of the important aspects of

understanding the quality of employment. The dominance of agriculture and allied activities

in employment generation shows the slow pace of employment opportunities outside the farm

sector and persistence of low income for majority of workers. According to 2011 Census,

106

about half of the workers in Uttarakhand are working in agriculture sector as cultivators or

agricultural labourers (Table 5.3). This excludes a substantive share of workers who are

engaged in allied activities such as animal husbandry, fisheries, forestry, etc. Even using this

broader categorization of workers, there appears huge difference between the hilly and plain

regions of the state. A large proportion of workers in hilly districts is working as cultivators

on their tiny parcels of land. In contrast, cultivators account for less than one-fifth of total

workers in plains districts of the state. The proportion of agriculture wage workers is found to

be highest (28 per cent of total workers) in Udham Singh Nagar district in 2011. Overall

sectoral pattern of employment in Uttarakhand reveals dominance of cultivators in hilly

districts while same is not true for plains districts. Higher engagement of workers as

cultivators in hilly districts (agriculturally) is an indication of poor quality of employment.

Table 5.3: Occupational Distribution of Workers (Main+Marginal), 2011

District Cultivator Agricultural Labour Household industries Other

Almora 69.6 3.4 1.4 25.5

Bageshwar 68.9 7.3 2.4 21.5

Chamoli 67.0 2.1 3.0 27.9

Champawat 60.3 4.0 1.6 34.1

Garhwal 54.9 5.0 2.1 38.0

Nainital 36.6 9.2 2.6 51.6

Pithoragarh 63.4 2.5 2.8 31.3

Rudraprayag 73.6 2.8 1.9 21.7

Tehri Garhwal 66.7 2.9 1.4 28.9

Uttarkashi 74.6 2.8 2.0 20.7

Dehradun 13.2 6.6 3.9 76.3

Udham Singh Nagar 20.7 27.9 4.5 46.9

Hardwar 16.2 17.8 3.5 62.5

Uttarakhand 40.8 10.4 3.0 45.8

Source: Primary Census Abstract, Population Census, 2011.

Analysis of NSSO’s employment-unemployment survey data also reveals the

dominance of primary sector (agriculture and allied activities) in providing employment to

the people of Uttarakhand. It accommodateshalf of the state’s workforce in 2011-12.

107

Interestingly, the dominance of primary sector in providing employment in Uttarakhand is

lower in comparison to Himachal Pradesh and Uttar Pradesh. The secondary sector largely

consists of construction and manufacturing, employing about 9.3 per cent and 12.2 per cent

of total workers, respectively in Uttarakhand. Overall sectoral composition of employment in

Uttarakhand is found to be quite similar to the national pattern. However, as mentioned

earlier, there exist wide disparities in sectoral composition of employment between hills and

plains areas of the state, which generally get concealed at aggregate state level of analysis.

2. District-wise Sectoral Composition of Employment

Based on a primary survey of 100 villages across ten hilly districts in Uttarakhand during

2005, significant variations were observed in the sectoral composition of workforce

(Mamgain et al., 2005). For example, more than three-fourths of workers in Pauri Garhwal

district were engaged in agriculture and allied activities while it was lowest at about 57 per

cent in Uttarkashi district. For other districts the share of agriculture and allied activities

remains quite high between 68 to 72 per cent. This large proportion of employment in

agriculture indicates lack of employment opportunities outside agriculture.

After agriculture,construction is another important sector of employment in

Uttarakhand. It engages more than one-fifth of workforce in Champawat, Nainital and

Pithoragarh districts. In all the other hill districts except Rudraprayag, it provided employment

to a sizeable percentage of the workforce (Table 5.4). In fact, there was a significant increase

108

in developmental projects in all the hill districts in the state soon after its formation which led

to intensive construction related work.This boosted the demand for labour in the construction

sector. It, however, needs to be mentioned here that in major hydro power construction sites

there was a negligible number of local labourers involved. The reasons for such a situation

can broadly be traced to lack of required skills among local labour, tendency of local youth to

out-migrate and preferences for outside labour by the employers.

The share of the service sector in employment was the highest at about 16 per cent in

Rudraprayag and the lowest at about 6 per cent in Pauri Garhwal district. The other districts

with comparatively higher share of service sector employment were Tehri Garhwal,

Bageshwar and Uttarkashi. These districts also have a better flow of tourists, which promotes

demand for the service sector, mainly hotels and amenity services. It needs to be mentioned

here that nearly half of the total service sector employment was inpublic services, which

largely include teachers and health workers in the rural areas of the hill districts. This was

found true in all the hill districts considered for the analysis.

The manufacturing sector employed a very small percentage (1 to 2 per cent) of the

workforce in most of the hill districts except Uttarkashi and Chamoli. In these two districts,

17 per cent and 6.3 per cent of the workforce respectively was employed in the manufacturing

sector. In both these districts particularly at the high altitudes, most of the households were

engaged in weaving, knitting and manufacturing woollen garments based on locally available

wool and skills. This has been a traditional occupation of these communities but in the recent

past they have been facing problems such as availability of raw material, higher cost of

production and stiff competition from cheaper and better finished products from urban areas.

As a result this traditional occupation is gradually vanishing.These features of employment

underscore a need to initiate a suitable growth process which will help in shifting a larger

proportion of the workforce to rural non-farm employment with adequate incomes.

109

Table 5.4: Sector-wise Composition of Employment in Rural Areas of Hilly Districts ofUttarakhand, 2005

District Agric-

ulture

etc.

Manufa-

cturing

Constr-

uction

Trade,

hotel &

restaurant

Trans-

port

Finance,

Business, etc..

Publicadmn,education,commercialservices

All Totalnumberofsampleemployedpersons

Almora 71.88 1.92 15.63 2.40 1.20 0.48 6.49 100 416

Bageshwar 70.55 0.91 16.44 3.65 0.91 0.91 6.62 100 438

Chamoli 68.50 5.73 15.42 3.74 1.98 0.00 4.63 100 454

Champawat 68.53 1.74 21.24 3.67 1.54 0.19 3.09 100 518

Nainital 68.77 1.62 22.02 2.53 0.72 0.36 3.97 100 554

PauriGarhwal 75.10 0.99 18.18 2.17 0.59 0.20 2.77 100 506

Pithoragarh 69.37 0.90 20.50 3.15 0.90 0.00 5.18 100 444

Rudraprayag 73.52 1.43 8.96 3.05 2.24 0.20 10.59 100 491

TehriGarhwal 70.88 1.20 14.46 3.82 3.82 0.20 5.62 100 498

Uttarkashi 57.03 17.27 10.84 5.02 1.81 0.00 6.22 100 498

Total 69.36 3.40 16.44 3.32 1.58 0.25 5.46 100 4817

Source: Mamgain et al. (2005).

3. Nature of Employment

Self-employment is the predominant mode of employment in Uttarakhand. Nearly three-

fourths of rural workers and over half of urban workers are self-employed in 2011-12 which

is higherthan the national average at56 per cent and 42 per cent respectively (Figure 5.5a and

5.5b). Nearly 11 per cent of workers in rural areas of the state are in regular salaried jobs.

Thus, the percentage of casual wage workers is comparatively much less in Uttarakhand as

compared to Uttar Pradesh and India (Figure 5.5a and 5.5b).

110

Fig. 5.5a: Nature of Employment, 2011-12--Rural

Source:NSSO 68th Round, 2011-12.

Source:NSSO 68th Round, 2011-12

4. Nature of Employment across Social Group of Workers

The nature of employment differs significantly among workers belonging to various social

groups in Uttarakhand. While self-employment is a dominant mode of employment among all

111

social groups, the highest 83 per cent of ST workforce was self-employment in Uttarakhand

during 2011-12. The share of self-employed workers was lowest among SCs (59.3 per cent).

Interestingly, STs constituted the highest self-employed group (34 per cent) in the non-farm

activities which comprises mainly artisanworks and petty trade (Figure 5.6). Workers

belonging to other castesor social groups (OSGs)are relatively better positioned in terms of

employment.While a good one-fourth of them were in regular salaried employment, another

26 per cent were in non-farm self-employment. The other castes or OSGs were also the

biggest workforce group in regular employment. Thus, we observe that SCs are at the most

disadvantageous position as they were largely working as casual labour,or in self-employed

agriculture activities, fetching low income to them. This pattern in the availability of

employment opportunities to various social groups in the state broadly follows the national

pattern; however, SCs in Uttarakhand are relatively better placed in terms of quality of their

employment as compared to their counterparts at national level.

Fig. 5.6: Nature of Employment across Social Group of Workers in Uttarakhand, 2011-12

Source:NSSO 68th Round, 2011-12.

112

A higher dependence of population for employment on agriculture and allied

activities as self-employed also speaks about the relatively poor situation of such workers

particularly in hill regions where agriculture productivity is much less than half that inplain

areas. More so the labour input required for cultivating a similar parcel of land is more than

double in hill agriculture. This speaks their miseries. Mamgain (2004) estimated per person

perday farm earnings in hill region of Uttarakhand. It is found to be almost half of the

prevailing minimum daily wages in the region. In other words, the conventional time-based

approach of employment measurement serves little purpose when devoid of income measure,

particularly in agriculture and other self-employed ventures.

5. Regional Variation in Salaried Employment

In contrast to NSSO data, the Socio-Economic Caste Census (SECC) 2011, shows that nearly

one-fourth of rural households in Uttarakhand haveatleast one salaried worker (Figure 5.7).

The corresponding figure of India is much less at 9.7 per cent. The Labour Bureau data also

show about 31.6 per cent rural households in Uttarakhand having at least one person working

in wage/salaried employment in 2015-16. The share isalmost half at national level (16.4 per

cent) but higher in case of Himachal Pradesh (40 per cent). Similarly, about 51.7 per cent of

urban households in Uttarakhand haveatleast one person with wage/salaried jobs as compared

to just 37.9 per cent in India (Labour Bureau, 2016). Both the SECC and Labour Bureau data

clearly show the relatively less vulnerability of rural households in Uttarakhand to income

fluctuations associated with other forms of employment such as casual and self-employment.

113

Source: SECC, 2011

According to SECC data, the proportion of rural households with at least one person

in salaried employment widely varied from a highest (39.4 per cent) in Dehradun to lowest

(14.6 per cent) in Uttarkashi. There were four districts namely, Champawat, Hardwar, Udham

Singh Nagar and Uttarkashi reporting less than one-fifth of their rural households with

salaried workers. Among the rural households with salaried workers, government salaried

jobs predominate in almost all districts, indicating the relatively better quality of regular jobs.

Surprisingly, rural households in industrially developed districts of Udham Singh Nagar and

Hardwar reported much lower prevalence of salaried workers (18.3 per cent and 15.8 per cent)

including around 9 per cent in private sector jobs. This means that the rural households in

these two districts could benefit little with the industrial progress achieved in the districts

during the last one and half decade. In brief, the SECC 2011 data show rural areas of

Uttarakhand having relatively better quality of employment as compared to many other states

in India. Most of the available salaried employment in rural areas of the state is in

government sector. Perhaps due to this regional spread of salaried workers in Uttarakhand

there is relatively low incidence of poverty among rural households in the state as compared

to national average.

6. Levels of Earnings

The rapid growth in per capita income in the state is also marked with the increasing inter-

sectoral income inequalities. About 49 per cent of workers in Uttarakhand contributed only

114

14.4 per cent of GSDP of the state in 2014-15, thereby implying abysmally low levels of

earnings for a large segment of workers in the state. For example, in 2004-05 per worker

GSDP in agriculture was lowest at Rs. 17897 (at 1999-2000 prices), which is almost three

times lower than the average of the state. Construction, which employed nearly 7 per cent of

the workforce, was yet another sector with marginally higher pay per worker GSDP (Rs.

24715) than agriculture. Per worker GSDP was highest in electricity, gas and water supply

followed by finance & business (Table 5.5).

Table 5.5: Per Capita GSDP in Uttarakhand by sector, 2004-05(at 1999-2000 constant prices)

Sector Per worker GSDP (Rs.)

Agriculture, Forestry & Fishing 17897

Manufacturing 115577

Electricity, Gas and Water Supply 1379395

Construction 24715

Trade, Hotels & Restaurants 43126

Transport, Storage & Communication 257629

Finance., Real Est. & Business 454152

Other services 76409

Uttarakhand (GSDP) 51824

Source: Mamgain, 2006.

The situation in the hill areas of the state is more serious where productivity of

agriculture is very low (even less than half in case of major crops such wheat and rice) as

compared to plain areas (Mamgain, 2004).The situation almost remainedthe same till as

recentlyas 2015 (Figure 5.8). Furthermore, agriculture in the hills largely depends on climatic

conditions; therefore it is subject to large fluctuations and uncertainties in production.

Agriculture in a large part of the state suffers from several inherent maladies such as scarcity of

cultivable land, high degree of marginalisation and fragmented land holdings. A study by Mamgain

et al. (2005) shows that nearly half of the labour input in agricultural sector (employing

nearly 70 per cent of the rural workforce) in the hilly districts of Uttarakhand could not fetch

even a minimum wage level (Rs. 60 per day) during the year 2004. The available technical

115

know-how in the field of agricultural development has also failed to make any significant contribution

towards the development of agriculture in the mountain region. In fact, it has been observed that

agriculture in mountain region requires more human and animal labour in comparison to plains

region It also faces the inherent difficulty of implementing modern technologies. Due to poor

agriculture and lack of alternative employment opportunities and other basic infrastructure, a majority

of rural households in the hill region are forced to migrate out as a part of their survival strategy.

Source: Calculated from Uttarakhand Statistical Diary, 2015.

IV. DEMAND SIDE DYNAMICS OF EMPLOYMENT

Much of employment generation in any economy to a large extent depends on the growth of

enterprises. Viewed from this perspective, let us look at the growth of private enterprise in

Uttarakhand based on the data of Sixth Economic Census (SEC) 2013 that reveals some

interesting patterns. It is observed that the number of private enterprises excluding crop

production and plantation increased by 26.1 per cent during the period 2005- 2013. This

growth was unevenly distributed across the districts of the state. It was as low as 5 per cent in

Almora, Chamoli, Pithoragarh, Rudraprayag and Champawat districts to and as high as 53

per cent in Hardwar and other plains districts (Table 5.6). A high correlation coefficient value

of 0.77 between per capita income and growth in number of enterprises across districts

reveals the importance of development of enterprises to improve income levels of the

population. Thus, despite the long history of self-employment programme, namely, Swarn

Jayanti Gram Swarojgar Yojana (SGSY) and its recent format, National Rural Livelihood

116

Mission (also called Aajivika Mission), no visible impacts have beenseen in enterprise

development, particularly in a large part of hill region of the state.

The government wage employment programmes such as MNREGA (Mahatma

Gandhi National Rural Employment Guarantee Act) managed to ameliorate to some extent

the demand for wage employment foraugmenting the income levels of poor rural households,

particularly in hill areas. The average days of employment per household ranged between 26

in Tehri Garhwal and44 in Nainital and Dehradun districts each in 2016-17. However, such

demand of wage employment tended to overburden women in the state, particularly those

living in theHill Region (Mamgain and Reddy, 2015).

Table 5.6: Growth in Number of Enterprises* and Employment between2005 and 2013 (% change)

District Establishments EmploymentAverage employment per

enterprise (No.)

Hardwar52.8 95.2

3.1

Dehradun38.6 71.3

3.0

U. S. Nagar33.3 94.1

3.3

Uttarakhand26.1 57.1

2.6

Bageshwar23.9 43.0

1.8

Pauri Garhwal23.5 43.7

2.3

Tehri Garhwal16.6 40.6

2.2

Nainital12.5 13.8

2.4

Uttarkashi10.4 27.1

2.0

Rudraprayag5.8 28.7

2.1

Pithoragarh5.4 16.2

1.4

Champawat5.0 4.5

1.7

Almora4.6 6.5

1.8

Chamoli3.6 14.3

1.9

Note:* Enterprises excluding crop production, plantation, public administration, defence and compulsory socialsecurity services activities.

Source: Sixth Economic Census, 2013, Uttarakhand.

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V. CORRELATES OF POVERTY AND EMPLOYMENT

We have attempted to compute a correlation matrix based on select variables pertaining to

employment, its regularity, structure, resultant income and poverty across the 13 districts of

Uttarakhand (Table 5.7). The results are on expected lines. As obvious, there is an inverse

correlation between poverty ratio and per capita income as well with other variables like the

share of non-farm workers, farm productivity and urbanization, educational levels of

population and nutritional status of children. There is a positive correlation of poverty with

proportion of SC population, marginal workers and Gini coefficient of income inequality. But

such correlation is insignificant, thereby implying that more needs to be done to improve the

income and its distribution in thestate. For this, diversification of employment within the

farm sector and towards non-farm sector might be an important strategy. A significant

correlation between the share of non-farm workers and per capita income shows the

importance of diversification towards non-farm sector in improving the income levelsand

reducing the incidence of poverty. A significant positive correlation between the share of

non-farm employment and rate of urbanization, size of enterprises and percentage share of

educated people in the population indicates the direction of interventions needed to accelerate

the growth of non-farm employment in those areas which are lagging behindin these aspects

of development.The regularity of employment too has significant impact on income levels. A

large share of marginal workers among the workforce significantly reduces the per capita

income. Similarly, a significant negative correlation coefficient value between the share of

SC population and per capita income, agriculture productivity, hired workers in enterprises

and size of employment is an indication of low income levels of SC population. That might

be due to engagement of SC population in low quality of employment.A significant

inversecorrelation of SC population with the shares of hired workers and employment size of

non-farm enterprisesreaffirms the lack of employment opportunities in the districts with

higher share of SC population. It also explains the higher incidence of poverty among SC

population of the state.

Educational level of population turns out to be a significant variable in improving

income levels and employment prospectsin the non-farm sector. For explaining this we have

considered here the share of high school and above educated people in the age-group of 15

years and above. An insignificant correlation of child malnutrition with poverty only

reaffirms earlier findings that the issue of child malnutrition is not just a poverty driven

118

phenomenonbut has much to do with a mother’s educational levels and awareness (Mamgain

and Diwakar, 2012).

VI. SUMMING UP

The overall growth path of Uttarakhand has been impressive since its separation from Uttar

Pradesh. However, this growth has created huge regional inequalities within the state. The

growth process failed to generate gainful employment opportunities in the Hill Region of

Uttarakhand.A comparatively higher educational level of the population in Uttarakhand in

general, and in its hill region in particular, has not been able to reap the desired benefits from

the growth process which is largely concentrated in plains districts of the state.

Overall, the work force participation rates of population in Uttarakhand are lower in

comparison to Himachal Pradesh and the national average, particularly in case of male

population. This is largely due to higher participation in education and higher outmigration of

males in Uttarakhand. Work opportunities are marred with seasonality as one-fourth of total

workers in Uttarakhand were marginal workers, i.e. they worked in gainful economic

activities for less than 180 days (six months) in a year. The proportion of such marginal

workers is more than double among women than among men, particularly in the hill districts.

A high dependence on agriculture and allied activities forself-employment speaks volumes

about the relatively poor situation of marginalworkers particularly in the hill areas where

agriculture productivity is much less than half of productivity in plain areas. There is hardly

any evidence of progress in agriculture sector in the Hill Region. Further, due to low

productivity, uncertainty and crop destruction by wild animals, agriculture becomes

unattractive for the youth. Other than theagriculture sector, construction sector has shown

significant growth in terms of employment opportunities, but local people are mostly

unwilling to undertake manual work therein. Moreover, the youth were not able to utilize the

skilled job opportunities generated in the construction sector due to lack of required skills.

Although employment opportunities in trade, transport and government services have

expanded in both the hill and plain regions of the state, yet theyremain very limited in the Hill

Region. The pace of enterprise development has been reasonably good in most of the plains

districts of the state, whereas it has been far less than the desired pace in the Hill Region.

Thus, the lack of remunerative employment opportunities coupled with obsession for salaried

jobs has perpetuated large scale long term outmigration of youths from the hill areas towards

urban centers. In other words, the conventional time-based approach of employment

119

measurement serves little purpose when devoid of income measure, particularly in agriculture

and other self-employed ventures.

Despite a fast growth in enterprise development in Hardwar, the incidence of poverty

remainshigh in its rural areas, indicating the need for strengthening redistributive measures of

state government. This again reaffirms our argument that government redistributive measures

in hill districts coupled with transfer income from migrant workers have been enabling

factors for faster reduction in absolute deprivations of population in most of the hill districts

in Uttarakhand. However, neglecting productive employment opportunities at the cost of

redistributive measures would not last long as it has serious economic and political

consequences particularly emanating from large scale job related long-term out-migration

from the hill districts of the state.

A positive yet insignificant correlation of poverty with proportion of SC population, marginal

workers and Gini coefficient of income inequality implies that more needs to be done to

improve the income opportunities and its distribution in Uttarakhand. For this, diversification

of employment within the farm sector and towards non-farm sector might be an important

strategy. A significant correlation between the share of non-farm workers and per capita

income shows the importance of diversification towards non-farm sector in improving

income level and reducing incidence of poverty. A significant positive correlation between

the share of non-farm employment and rate of urbanization, size of enterprises and

percentage share of the educated in population shows the direction of interventions needed to

accelerate the growth of non-farm employment in those areas which are lagging behind in

these aspects of development. The regularity of employment has significant impact on

income levels. A large share of marginal workers among the workforce significantly reduces

the per capita income. Similarly, a significant negative correlation coefficient value between

the share of SC population and per capita income, agriculture productivity, hired workers in

enterprises and size of employment is an indication of low income levels of SC population.

That might be due to engagement of SC population in low quality of employment. A

significant inverse correlation of SC population with the shares of hired workers and

employment size of non-farm enterprises reaffirmsthe lack of employment opportunities in

the districts with higher share of SC population. It also explains the higher incidence of

poverty among SC population of the state.

120

Table 5.7: Correlation Matrix

VariablePoverty

Gini_Rural

Gini_Urban

Percapita_DDP

Productivityperha

Enterprisesper_lakhpop

hired_workers

Empl_perenterprise

marginal_workers

nonfarm_workers

urban_pop

SC_pop

Educated

Weight_for_age

Poverty 1Gini_Rural .426 1Gini_Urban .077 .403 1Percapita_DDP -.441 .143 .440 1

Productivityperha -.521 .081 .259 .761** 1

Enterprisesper_lakhpop

.059 .301 .511 .165 .077 1

hired_workers -.300 .027 .065 .680* .551 -.417 1Empl_perenterprise -.370 .199 .274 .891** .841** -.042 .858** 1

marginal_workers .376 -.494 -.125 -.568* -.686** -.316 -.301 -.644* 1

nonfarm_workers -.403 .253 .396 .779** .465 -.085 .537 .624* -.427 1

urban_pop -.533 .289 .507 .919** .699** .203 .574* .802** -.686** .879** 1SC_pop .511 .127 -.413 -.683* -.553 .118 -.744** -.732** .260 -.570* -.660* 1Educated -.093 .247 .192 .642* .136 -.003 .569* .565* -.355 .728** .674* -

.4741

Weight_for_age -.389 -.104 -.398 -.042 .179 -.431 .421 .242 -.252 -.137 .001 -.221

-.103 1

13 13 13 13 13 13 13 13 13 13 13 13 13 13

Note:* Correlation is significant at the 0.05 level (2-tailed); ** Correlation is significant at the 0.01 level (2-tailed).

121

Educational level of population turns out to be a significant variable in improving income

levels and employment prospects in non-farm sector. An insignificant correlation of child

malnutrition with poverty only reconfirms the earlier findings that the issue of child

malnutrition is not just a poverty driven phenomenon but has much to do with a mother’s

educational levels and awareness.

In the plains districts, especially Hardwar, the existing programmes of development

and redistribution have beenless than satisfactory in ameliorating poverty and inequality.Thus,

they need to be strengthened with respect to their design, outreach and effective

implementation. The district lags much behind in most of the development indicators

particularly due to poor redistribution mechanisms in its rural areas. This warrants a serious

attention and multipronged strategy to eradicate poverty and improve income distribution by

creating employment opportunities and upscaling quality skill development programmes.

Annexure Table 5.1: District-wise Work Participation Rates (%), 2001 and 2011

District

2001 2011

Person Male Female Person Male Female

Almora 46.3 44.5 47.9 47.9 48.9 47.0

Bageshwar 47.6 45.1 49.9 47.6 47.2 47.9

Chamoli 44.5 44.9 44.1 46.2 48.4 44.1

Champawat 40.2 43.5 36.9 38.3 46.1 30.5

Uttarkashi 46.1 48.3 43.7 47.6 50.0 45.2

Pauri Garhwal 38.7 40.8 36.8 39.9 45.1 35.2

Rudraprayag 44.9 42.3 47.1 46.7 45.7 47.5

Tehri Garhwal 43.8 45.1 42.5 45.3 47.3 43.5

Pithoragarh 43.0 43.4 42.6 44.8 47.4 42.2

Hardwar 29.4 47.2 8.8 30.6 49.5 9.1

Nainital 36.6 48.1 23.9 39.4 52.0 25.9

U. S. Nagar 31.7 48.0 13.7 35.9 51.8 18.6

Dehradun 31.2 47.8 12.6 34.3 51.4 15.4

Uttarakhand 36.9 46.1 27.3 38.4 49.7 26.7

Note: Work participation is calculated by including main and marginal workers.

Source : Calculated from Primary Census Abstract data of Population Census for the year 2001& 2011

Annexure Table 5.2: Gender-wise WPRs, 2011-12 (Usual status) (%)

122

State Male Female PersonRural

Uttarakhand 45.2 30.8 38.1Himachal Pradesh 54.1 52.4 53.3Uttar Pradesh 49.1 17.7 33.8India 54.3 54.8 39.9

UrbanUttarakhand 50.6 8.6 30.5Himachal Pradesh 60 21.2 41.6Uttar Pradesh 51.1 10.2 31.7India 54.6 14.7 35.5

TotalUttarakhand 46.6 25.2 36.1Himachal Pradesh 54.8 49.2 52Uttar Pradesh 49.5 16.1 33.3India 54.4 21.9 38.6Source: NSSO 68th Round on Employment and Unemployment, 2011-12.

Annexure Table 5.3: Rural Households (%) with at least one Person in Salaried Jobs

District Salaried jobs Government sector Public sector Private sector

Dehradun 39.38 20.72 2.60 16.06

Bageshwar 29.95 15.65 2.10 12.20

Pithoragarh 28.50 20.45 1.13 6.92

Chamoli 26.91 20.80 1.57 4.54

Tehri Garhwal 26.35 8.92 2.36 15.06

Garhwal 25.00 16.43 2.01 6.56

Nainital 24.03 11.51 3.25 9.26

Rudraprayag 22.60 12.88 2.28 7.44

Almora 21.53 11.79 1.54 8.20

US Nagar 18.29 7.48 1.95 8.86

Champawat 16.56 11.26 0.73 4.56

Hardwar 15.82 5.05 2.07 8.71

Uttarkashi 14.60 11.71 0.63 2.26

State Total 23.67 12.44 2.00 9.23

All India 9.65 5.00 1.12 3.57

Source:Socio-Economic Caste Census, Uttarakhand, 2011

Annexure Table 5.4: Reasons for Migration, 2011

123

Uttarakhand India

Reason Persons Males Females Persons Males Females

Work/Employment/Business 15.41 39.46 2.68 11.18 29.95 2.72

Education 3.11 5.49 1.85 1.77 3.39 1.03

Marriage 42.64 1.38 64.49 49.35 4.27 69.68

Moved after birth 3.62 6.25 2.22 10.57 20.23 6.22

Moved with household 26.30 32.88 22.81 15.39 22.33 12.26

Others 8.92 14.54 5.94 11.74 19.82 8.10

Total 100 100 100 100 100 100

Source: Calculated from Population Census, 2011, D-5 series (provisional)

124

Chapter - VI

SUMMARY AND CONCLUSIONS

Measurement of poverty and its elimination has been a core strategy of the development

planning process in India since its First Five Year Plan. There has been significant progress in

the methodology of the measurement of poverty in India. However, poverty measurement

still suffers due to paucity of data at a more disaggregated level for effective policy

interventions. The NSSO quinquennial surveys pooled data for centre and state samples on

consumption expenditure makes it possible to estimate poverty at district level for rural and

urban areas but does not allow estimation at further disaggregation.

Keeping in view the Terms of Reference (ToR) of Department of Economics and

Statistics (DES), Government of Uttarakhand, the present study attempted to generate

district-wise poverty estimates, separately for rural and urban areas of Uttarakhand by using

NSSO’s 68th Round pooled data on consumption expenditure for the year 2011-12. Given the

constraint of access to other data sources, such as SECC, 2011 and NFHS-4, the present

exercise mainly concentrated on NSSO data for district-wise poverty estimation in

Uttarakhand. The report spans through six chapters including this one. The major findings

emanating from the study are briefly presented in the following sections.

A remarkable progress in attaining high economic growth in Uttarakhand has also

been accompanied with widening regional disparities. Most of the hilly districts of the state

lagged behind the three plains districts including Dehradun in economic development.

Though the situation of hilly districts on educational development indicators is far better than

the two plains districts of Hardwar and Udham Singh Nagar, there are hardly any

employment opportunities for such educated labour force in the Hill Region. As a result, most

of the hilly districts are witnessing a huge out-migration of its able-bodied population, mostly

males,in search of livelihoods. There has been a rapid increase in permanent out-migration

from hilly areas of the state in recent decades, which is likely to havefar-reaching socio-

political implications in coming years. Out-migration could hardly make any multiplier

impact on the economy of source areas of migration. The growing regional disparities in

125

development outcomes in Uttarakhand only reinforces the need to understand poverty in the

statein its multidimensional forms as the general indicators of development used to assess

progress in mountain economies may sometime lead to confusing interpretations. It must be

remembered that the available data used for calculation of poverty in the contexts of Hill

Region rather fall inadequate, and therefore need to be interpreted with utmost care.

Deprivation and Inequality-A Comparative Picture of Uttarakhand with Select States

Based on consumption expenditure data of NSSO for the years2004-05 and 2011-12, the

report estimates deprivation and inequality in Uttarakhand. However, defining a concept of

deprivation and deriving a corresponding measure of it consistently across heterogeneous

regional contexts is an empirical challenge for studies on a state like Uttarakhand. Our

analysis was made in a comparative setting involving its parent-state of Uttar Pradesh, the

adjacent hill state of Himachal Pradesh and the national context of India. The major findings

are as follows:

Uttarakhand stands second among the three states under review in terms of estimates

of measures of average consumer expenditures for both rural and urban sectors. It has

improved while both Himachal Pradesh and Uttar Pradesh have declined in terms of their

average consumption levels relative to that of the nation as a whole. This indicatesbetter pace

of progress in Uttarakhandthan that of the rest of India.

Inequality in rural nominal consumption distributionwas the least in Uttarakhand in

2004/05, but tended to increase at a faster rate between the period 2004-05/2011-12, thereby

outpacing Himachal Pradesh, Uttar Pradesh and the national average. As regards urban

nominal consumption inequality, it increased in all the states under review; the percentage

increase was the highest in Himachal Pradesh followed by Uttar Pradesh, Uttarakhand and

All-India respectively.


was 93.40 per cent in Uttarakhand in 2004/05, which was the highest amongthe cases under

review. Mainstream inclusion increased in urban Uttarakhand and Uttar Pradesh butdeclined

126

in Himachal Pradesh and all-India. The reasons for such inclusion could be improved reach

of government’s redistributive programmes in rural areas of these states.

Estimates of absolute deprivation (poverty) vary depending upon the concept and

measure used. This study has explored conventional as well as contemporary approaches in

this respect. As per the Lakdawala approach, the incidence of poverty was the highest in

Uttarakhand, followed by Uttar Pradesh and Himachal Pradesh in 2004/05. This profile is

different from the one revealed by the Tendulkar Committee method for the same year, which

shows the incidence of poverty to be the highest in Uttar Pradesh followed by Uttarakhand

and Himachal Pradesh in the same year. In general, both Tendulkar and Rangarajan

Committee approaches reveal a reduction in poverty in all the states at successive points of

time under review. As regards urban poverty, the reduction was much higher at the national

level than in Uttar Pradesh followed by Uttarakhand and Himachal Pradesh respectively.

Social group-wise, the incidence of absolute poverty was the least among the OSGs,

followed by OBCs and was highest for SCs in 2004-05. The percentage point reduction in

poverty in Uttarakhand was maximum among the SCs (30.34) followed by OBCs (29.06),

STs (20.52) and OSGs (18.88) between 2004-05 and 2011-12. There was a more or less

uniform reduction (around 65 percent) in the incidence of poverty among all the social groups

in rural Uttarakhand. The relative profile of deprivation across social groups is similar in

Himachal Pradesh and Uttarakhand but with a difference. The difference being, unlike

Uttarakhand, the extent of reduction in poverty is highly uneven across social groups in

Himachal Pradesh and Uttar Pradesh: Incidence of poverty declined by 88 per cent among

OBCs and by 62 per cent among OSGs in Himachal Pradesh and by 27 per cent (OBCs) and

52 per cent (OSGs) in Uttar Pradesh. At the all India level, percentage poverty reduction fell

in the range between 38 and 42 per cent among the SCs, OBCs and OSGs.

The relative profiles of absolute deprivation in urban Uttarakhand is slightly different

from the one observed for rural Uttarakhand. Even though the relative standing of the three

social groups– the SCs, OBCs and OSGs– is the same as the rural one for the year 2004-05, it

changes for the year 2011/12 – the SCs and the OBCs interchange their rank in terms of the

extent of deprivation. This is because of a massive reduction in deprivation (80 percent)

127

among the SCs as compared to only 45 per cent among the OBCs. Thus, unlike the rural

sector, the extent of reduction in poverty across social groups in urban Uttarakhand is highly

uneven: the percentage point reduction in urban poverty was the maximum among the SCs

(38.17) followed by OBCs (15.86), STs (13.32) and OSGs (11.51). The same profile could be

found in Himachal Pradesh and Uttar Pradesh. As regards Himachal Pradesh, poverty

actually increased among the STs and SCs in urban areas. Urban all India too has experienced

uneven extent of reduction in poverty among the four social groups under review.

As regards the extent of mainstream inclusion in rural Uttarakhand, it was the highest

for the OSGs (81 per cent) in 2004/05 which declined to 77 per cent by 2011-12. It has been

the lowest for SCs, which declined from 49 per cent to 38 per cent in rural Uttarakhand. The

rural OBCs improved their extent of mainstream inclusion from 62 per cent in 2004-05 to 84

per cent in 2011-12. The STs too improved their inter-group inclusion from 57 per cent to 67

per cent between these two years. These results show that inclusion process for the SCs was

far behind other social groups in rural Uttarakhand; and the reach of high economic growth to

SCs was less than satisfactory. Both the OBCs and OSGs improved their lot as reflectedby

both mean- and order-based measures of inter-group inclusion in urban Uttarakhand.

Mainstream inclusion was the maximum for the STs in rural Uttarakhand in 2004/05.

The extent of mainstream inclusion for the bottom half of STs and OSGs exceeded that for

SCs and OBCs. This profile remained the same in 2011-12 but for some marginal decline in

mainstream inclusion for the STs, OBCs and OSGs. As regards SCs, mainstream inclusion

increased marginally between these two years. The SCs and OBCs were the marginalized

social groups in 2004/05; only the SCs remained so in 2011-12.

Mainstream inclusion was maximum for the STs in urban Uttarakhand. The extent of

mainstream inclusion for the bottom half of the STs and OSGs exceeded that for SCs and

OBCs. This profile changed altogether in 2011-12 which saw a drastic reduction for the STs

and improvement for the SCs in mainstream inclusion The STs, SCs and OBCs are the

marginalized social groups in 2004-05 as well as 2011-12; however, the extent of

marginalization of SCs and OBCs has declined between the years under review.

128

District-wise Poverty and Inequality in Uttarakhand

The calculation of district-level poverty and inequality was based on pooled state and central

sample of NSSO consumption expenditure data for Uttarakhand for the year 2011-12. The

average MPCE (at average state level prices) in rural Uttarakhand was Rs 1460.10 in 2011-12.

The marginal distribution of rural mean MPCE across districts reveals high density of the

bottom half of the districts in a narrow range and limited scattered prosperity across districts

over a wide upper range. Nainital is even an outlier prosperous district in the rural sector.

Pithoragarh, Pauri Garhwal, Hardwar and Dehradun Hills constitute the poorest quartile

group of districts; Rudraprayag, Chamoli, Nainital Hills and Tehri Garhwal form the lower

middle quartile group; Bageshwar, Uttarkashi, Almora and Champawat belong to the upper

middle quartile group; Dehradun, Udham Singh Nagar and Nainital form the richest quartile

group in the rural sector of Uttarakhand. MPCE distribution varied across districts with

respect to its different dimensions. This clearly brings out how heterogeneous the districts are

with respect to even the factors governing the distribution of per capita household consumer

expenditure.

The marginal distribution of urban mean MPCE across districts is negatively skewed;

the urban distributional profile is the reverse of the one observed for the rural sector across

districts. Champawat, Udham Singh Nagar, Dehradun Hills, Nainital and Pauri Garhwal

belong to the poorest quartile group; Chamoli, Pithoragarh, and Uttarkashi form the lower

middle quartile group; Rudraprayag, Dehradun, Bageshwar, and Almora belong to the upper

middle quartile group; Tehri Garhwal, Hardwar, and Nainital Hills form the richest quartile

group in the urban sector.

There is no consistent relation between levels of mean MPCE and extent of inequality

in both the rural and the urban sectors.

Almost every fifth rural resident of Uttarakhand lives in poverty. This incidence is

minimum in the Dehradun Hills region of Dehradun district (6.7 per cent) and maximum in

Pauri Garhwal (29.9 per cent). As regards urban deprivation, the state level average incidence

is 11.5 per cent. It ranged from the minimum of nil in Tehri Garhwal to the maximum of

nearly half of the urban population (48.7 per cent) in Champawat. The average incidence of

129

poverty for the state as a whole (rural and urban combined) is 16 per cent. It ranged from 6.8

per cent in Dehradun Hills to 28.5 per cent in Pauri Garhwal.

Incidence of rural poverty is generally the lowest in the richest quartile group of

districts. Other indicators of deprivation like food share in household budget and cost of

living also report a favourable profile of these districts. In sum, the best-off three districts,

namely Dehradun, Udham Singh Nagar and Nainital seem to be doing reasonably well in

terms of all the indicators under review.

The marginal distribution of incidence of rural poverty across districts is nearly

uniform while those pertaining to extent of inequality and cost of living are highly negatively

skewed ones. This would mean that at least half of the districts are densely located with

respect to high extent of relative inequality and cost of living.

Unlike the rural profiles, the marginal distributions of the incidence of poverty, extent

of inequality and cost of living are positively skewed ones in the urban sector. This would

mean that half of the districts are densely located in a narrow range at the lower end of the

distributions of incidence of poverty, extent of relative inequality and cost of living.

Urban mean MPCE exceeds that of rural mean MPCE in all the districts. Rural-urban

disparity in mean MPCE is the lowest in Nainital (108.45), which is the richest in terms of

rural mean MPCE but poorest fourth in terms of urban mean MPCE. MPCE disparity is the

highest is Hardwar (212.13), which is the third poorest rural district but second richest urban

district. Finally, the median disparity is in Uttarakashi (172.10), which falls in the rural upper

middle and urban lower middle quartile group. In other words, failure of urban development

to catch up with rural prosperity seems to have led to a development process far removed

from the Kuzents’s inverted-U postulate.

Thecross-sectional estimates of poverty and inequality across districts do not really

tally with the descriptions provided in the overview profile of Uttarakhand. For instance,

Hardwar falls in the poorest quartile group in terms of rural MPCE, extent of inequality in

consumer expenditure distribution and incidence of poverty even though one would expect it

in the richest quartile group because of its rich resource endowments and opportunities as a

130

district in the plains. Similarly, Almora falls in the upper quartile group in terms of MPCE,

extent of inequality, incidence of poverty, topmost quartile group in terms of food share in

total consumer expenditure and lower quartile group in terms of cost of living. The urban

profile too corroborates this kind of mismatch. How do we explain this mismatch? One

critical explanation could be migration between the hilly and plains districts, state

intervention in stabilizing prices through the public distribution system, state’s role in public

employment (about 25 per cent of the households with atleast one member in regular

job,andgovernment oriented employment), etc.

The pattern of poverty and inequality clearly shows how a large number of population

is concentrated in lower income quintiles, marginally above the poverty line in most of the

districts in Uttarakhand. They are vulnerable to marginal fluctuations in their income levels

with a likelihood of falling back into the poverty trap. We attempted to understand this

scenarioof poverty and vulnerability in the context of nature and quality of employment in

Uttarakhand. We observed a predominance of agriculture as a source of employment and

income, particularly in most of the hill districts in Uttarakhand, with very slow pace of

diversification. Moreover, the productivity of agriculture in hill districts is almost half of the

plain regions of the state, mainly associated with undulated geographical terrains, dependence

on rains and scattered farmlands demanding highlabour inputs. The available employment

opportunities outside farm sector are mostly manual andextremely limited. Most of the youth

are educated and in search of regular salaried employment, even in menial jobs at low levels

of income. The lack of remunerative employment opportunities coupled with obsession for

salaried jobs has led to large scale long term out-migration among youths towards urban

centres.

Eradicating Poverty and Reducing Vulnerability through Creating Quality

Employment

The second chapter on the overview of economy of Uttarakhand is unambiguous in its

presentation of the state’smacroeconomic transition from a slow growth economy into a high-

growth one. It presentscross-sectional profile of disparities in resource endowments,

economic opportunities and hence, economic welfare levels like per capita consumer

131

expenditure and incidence of poverty. Empirical evidence on the levels of living and

deprivation provide enough evidence of the state’s achievements in this respect. Growth in

real consumption (price adjusted average per capita MPCE of 58 per cent) in both the rural

and urban sectors is higher than those in the states of Himachal Pradesh and Uttar Pradesh

and in the nation as a whole. Percentage reduction in rural poverty is also the highest while

the urban poverty has almost reached the single-digit level. How far these changes are

reflected in real outcome indicators like measures of health status, say, of children? Available

estimates for 2005-06 show that Uttarakhand was doing much better than the nation as a

whole on these indicators. As regards wasting and under-weight its performance in 2005-06

was comparable to that of Himachal Pradesh. Recent evidence for the year 2015-16 speaks of

a sustained improvement in health indicators. Stunting declined from 44.4 per cent in 2005-

06 to 33.5 per cent in 2015-16 while the decline at the national level was from 48 per cent to

38.4 per cent between the same two points of time. Wasting increased in both Uttarakhand

and India as a whole: it increased from 18.8 per cent to 19.5 per cent in Uttarakhand and from

19.8 per cent to 21.0 per cent in India as a whole. However, there was good improvement in

terms of proportion children underweight. It declined from 38 per cent to 26.6 per cent in

Uttarakhand as against a drop from 42.5 per cent to 35.7 per cent in the nation as a whole

during the stated period 2005-06 /2015-16.

However, there is hardly any evidence of progress in agriculture sector in the Hill

Region,thus keeping intact the related vulnerability of a large section of population dependent

on it. In addition, due to low productivity, uncertainty and crop destruction by wild animals,

agriculturebecomes unattractive for the youth, who are by and large well-educated. Although

construction sector has shown significant growth in employment opportunities, local people

are mostly unwilling to undertake manual work. Moreover, they are not able to utilize the

skilled job opportunities generated in the construction sector due to lack of required skills.

Though employment opportunities in trade, transport and government services have

expanded in the hill region of the state, theyremain very limited. The lack of remunerative

employment opportunities coupled with obsession for salaried jobs led to the large scale long

term out migration among youths towards urban centres. The gravity of the situation can be

understood fromthe fact that there are a number of villages left with single digitpopulations.

132

Such destitution needs to be reversed. This precarious situation needs to be reversed through

appropriate policies and programmes aimed at employment creation with special focus on the

development needs of such regions.

Overall, the work force participation rates of population in Uttarakhand are lower in

comparison to Himachal Pradesh and national average, particularly in case of male

population. This is largely due to higher participation in education and higher migration of

males in Uttarakhand. Work opportunities are marred with seasonality as one-fourth of total

workers in Uttarakhand were marginal workers, i.e. they work forlesser part of the year (less

than 180 days or six months) in gainful economic activities.The proportion of such marginal

workers is more than double among women than in men, particularly in the HillRegion. A

higher engagement of workers as cultivators in hilly districts is an indication of poor quality

of employment. A higher dependence of population on agriculture and allied activities

forself-employment also reflects the relatively poor situation of such workers, particularly in

hillyareaswhere agriculture productivity is less than half than in plains areas.In other words,

the conventional time-based approach of employment measurement serves little purpose

when devoid of income measure, particularly in agriculture and other self-employed ventures.

The pace of enterprise development has been reasonably good in most of the plains

districts of the state, yet far less than the desired pace. Despite a fast growth in enterprise

development in Hardwar, the incidence of poverty remained high in its rural areas, indicating

the need for strengthening redistributive measures of state government. This again reaffirms

our argument that government redistributive measures in hillydistricts coupled with transfer

income from migrant workers have been enabling factors for faster reduction in absolute

deprivations of population in most of the hill districts in Uttarakhand. However, neglecting

productive employment opportunities at the cost of redistributive measures would not last

long as it has serious economic and political consequences particularly emanating from large

scale job related out-migration from hilly districts of the state.

A positive yet insignificant correlation of poverty with proportion of SC population,

marginal workers and Gini coefficient of income inequality implythat more needs to be done

to improve income opportunities and theirdistribution in Uttarakhand. For this diversification

133

of employment within the farm sector and towards non-farm sector might be an important

strategy. A significant correlation between the share of non-farm workers and per capita

income shows the importance of diversification towards non-farm sector in improving

income level and reducingtheincidenceof poverty. A significant positive correlation between

the share of non-farm employment and rate of urbanization, size of enterprises and

percentage share of educated people in population indicatesthe direction of interventions

needed to accelerate the growth of non-farm employment in those areas which are lagging

behind on these aspects of development. The regularity of employment has significant

impact on income levels. A large share of marginal workers among the workforce

significantly reduces the per capita income. Similarly, a significant negative correlation

coefficient value between the share of SC population and per capita income, agriculture

productivity, hired workers in enterprises and size of employment is an indication of low

income levels of SC population. That might be due to engagement of SC population in low

quality of employment. A significant inverse correlation of SC population with the shares of

hired workers and employment size of non-farm enterprises reaffirmsthe lack of employment

opportunities in the districts with higher share of SC population. It also explains the higher

incidence of poverty among SC population of the state. Educational level of population turns

out to be a significant variable in improving income levels and employment prospects in the

non-farm sector. An insignificant correlation of child malnutrition with poverty only

reaffirms the earlier findings that the question of child malnutrition is not just a poverty

driven phenomenon but has much to do with a mother’s educational levels and awareness.

In brief, the creationof gainful employment opportunities with reasonable social

safety measures iscritical in eradication of poverty and reduction in vulnerabilities of

population belonging to various regions and disadvantaged sub-groups of population in

Uttarakhand. Thus, along with the creation of employment opportunities, skill development

of both men and women is crucial for various trades and occupations to improve their

employability and productivity. Most of the people including migrants of the Hill Region

though better educated, lack skill training. This severely affects their employability and

earnings. They require training on a larger scale in different vocations in response to market

demand. The skill training measures need to be generic as well as area specific depending on

134

the choices and opportunities for such skills. The existing skill development programmes in

the state need to be assessed in terms of their coverage and utility in order to undertake

suitable midway corrections.

With the growing emphasis on protection of environment in the context of climate

change, role of hill and mountain regions is being seen as critical towards this endeavour. In

this direction, an EcoTaskForce could be created on the lines of Territorial Army by

recruiting local people, whose services can be used in afforestation drives and their

maintenance. This will not only help in improving environment but also provide salaried

employment to local youth.

The state government can learn from the encouraginggrass root examples of

promoting sustainable livelihoods in farm as well as non-farm sector by various NGOs,

which linked these to value chains and resulted in improving quality of life inrural areas in

the hill districts. Such measures need upscaling with support of government and active

engagement of local communities. Improved access to information, skills, technology,

markets, policy and institutional support leading to better terms of engagement for small

producers are equally important for enterprise development in the state. The rate of success

would depend on efficient implementation of policiesand programmes which need to be

developed with a pro-poor and mountain bias. Institutions responsible for the implementation

of such policies must be pro-active and develop a synergy and coordination to avoid conflicts

and produce better results. Mobilising and empowering communities with information, skills

and support services are of paramount importance (ICIMOD, 2013).

In sum, the programmatic interventions must support the higher growth initiatives in

Hill Region of Uttarakhand which hasyet to witness a remarkable improvement in

employment and income opportunities for itspopulation. These efforts should also percolate

to poor and marginalized sections of the society such as SCs and religious minorities. The

development dreams of the people of Uttarakhand, which they visualized at the time of

demand for a new state, particularly of those residing in hilly districts must be addressed on a

priority basis. In fact, there is need for a strong political will to initiate a process of niche

baseddevelopment strategy for the hilly areas of the state with a strong support of

135

bureaucracy. The myopic vision of developing already developed regions will not prove to be

an inclusive strategy. This will also be a fitting tribute to those who sacrificed their lives for

making Uttarakhand a state of their dreams where everybody gets decent work opportunities

with least out-migration.

In the plains districts, especially Hardwar, the existing programmes of development

and redistribution have beenless than satisfactory in ameliorating poverty and inequality, and

thus need to be strengthened in terms of their design, outreach and effective implementation.

The district lags much behind in most development indicators particularly due to poor

redistribution mechanisms in its rural areas. This warrants a serious attention and

multipronged strategy to eradicate poverty and improve income distribution through creating

employment opportunities and upscaling quality skill development programmes.

136

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