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Unlike Muslims in rural areas, a disproportionately large number of Muslims in urban India experience abject poverty. While incidence of poverty has declined for all religious groups in India, urban Muslims have experienced a relatively slower decline in poverty than others.

Arvind Panagariya and Megha Mukim in a World Bank’s policy research working paper released earlier in December argue that “poverty has declined steadily in all states and for all social and religious groups” in India *. In fact, a sharper decline in poverty was observed for periods of rapid economic growth in 2004-05 and 2009-10.

Economic growth has helped reduce poverty in India. The challenge now is to spread the benefits of growth evenly over the diverse Indian socio-cultural and economic fabric. The poverty landscape in India is spread unevenly across the States and amongst the social and ethnic groups. Poverty has not declined at the same pace for some religious groups, including Muslims. At the same time, the decline in poverty for scheduled castes and tribes has been faster than that for non-scheduled castes.

Panagariya and Mukim estimated the poverty rates for the 17 largest states in India. They generated separate estimates for urban and rural populations and further disaggregated their estimates for socio-economic and religious groups. They wanted to determine if the economic growth had helped reduce poverty in India. Furthermore, they wanted to ascertain if the benefits of growth were evenly distributed among the major socio-religious groups in India.

The scheduled castes and tribes have a much higher incidence of poverty than the rest in India. Consider rural India where incidence of poverty among the scheduled tribes at 30.5 per cnet in 2009-10 was almost two times that of the non-scheduled castes. At the same time, since 1983 poverty declined at a lower rate of 53 per cent for the rural scheduled castes and tribes than others.

Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714
Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714

Poverty amongst Indian Muslims

While India is a multi-religious, multicultural society, still Hindus comprise an overwhelming majority of 82 per cent of the population. Indian Muslims account for 12.8 per cent of the population, whereas Christians are 2.3 per cent and Sikhs are 1.7 per cent of the population. Almost 34 per cent of the 133 million Indian Muslims live in urban areas with a higher rate of urbanisation than the Hindus.

The incidence of poverty amongst Muslims in India is higher than Hindus, Christians, and Sikhs. Furthermore, Muslims in urban India experience a much higher incidence of poverty than others. The incidence of poverty in rural India is almost the same for Muslims and Hindus where nearly one in five in each community lives below the poverty line. The difference, however, is more pronounced in urban areas. Almost 34 per cent of all Muslims in urban India were below the poverty line compared to 19 per cent of Hindus. And whereas poverty for Hindus in urban India declined by 52 per cent between 1983 and 2009-10, the rate of decline for urban Muslims was much slower at 39 per cent.

Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714
Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714

With the exception of Bihar, Tamil Nadu, Madhya Pradesh and Karnataka, Muslims experienced a higher rate of poverty in 2009-10 than Hindus in the remaining States in the sample.

Purveyors of the Gujarat Model beware

The State-wide breakdown of poverty for various religious groups paints a revealing picture that challenges several myths that have dominated the development discourse in India. The conventional wisdom on economic development, as is portrayed by the BJP and its sympathisers, projects the BJP-led Gujarat as the model for economic development. The statistics, however, paint a very different picture.

In 2009-10, incidence of poverty for Hindus and Muslims in Gujarat was almost twice as that for Kerala, which is a socially progressive state in India known for its secular and socialist policies. Almost 38 per cent of Muslims were below the poverty line in Gujarat compared to 22 per cent of Hindus. And whereas the poverty amongst Hindus in Gujarat declined by 74 per cent during 1993-94 and 2009-10, Muslims in Gujarat experienced a decline in poverty of mere 11 per cnet. For the same time period, poverty amongst Muslims in Kerala declined by 61 per cent. In fact, incidence of poverty amongst Muslims in Gujarat increased between 2004-05 and 2009-10.

Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714
Source: Arvind Panagariya and Megha Mukim. World Bank’s policy research working paper # 6714

Well done, Abba!

The debate about defining the poverty line has largely been an academic exercise amongst economists. The matter is far from settled in India and other developing nations where economists continue to debate over who is poor. In the meanwhile, the most insightful definition of the poverty line comes from Ashok Mishra who wrote the screenplay for the Bollywood film Well done Abba!. Ashok explains the intricacies of the poverty line through the eyes of the poor. The lead character in the movie, Armaan Ali (played by Boman Irani), is a Muslim and if he were to be below the poverty line, he’d qualify for a subsidized well to be dug on his property under the Kapildhara scheme. To establish his poverty bonafides Armaan Ali explains to a government official that he begins each month above the poverty line, but as the days pass and he pays bills and other dues, he falls below the poverty line.

The causes of persistently higher poverty rates among Muslims and other minorities in urban India need to be further explored. Why religious and other minorities have experienced a slower decline in poverty is a question that should concern Indian planners. The reasons behind such anomalies could be more complex than one would assume. Consider that a large proportion of the educated middle-class of urban Muslims in India left for Pakistan in 1947. The inter-generational effects of losing the educated middle class could take several decades to mitigate.

The post-1990 economic growth in India and China has lifted hundreds of millions out of abject poverty. The Panagariya-Mukim paper offers further evidence for growth induced reduction in poverty in India. The bigger challenge for Indian planners and decision-makers is to find ways for a more even distribution of benefits of economic growth and prosperity.

  • A comprehensive analysis of poverty in India by Arvind Panagariya and Megha Mukim. The World Bank. Policy Research Working Paper # 6714. December 2013. Wahington, DC.