Poorest States in India – Get List of Underdeveloped States with Highest Poverty Rate in India

THE FACTS


Poorest States in India – India, with its diverse culture, geography, and economy, is a nation that houses both affluence and poverty. The economic disparity is evident when we examine the poverty rates across its various states and union territories. While some regions have made significant strides in poverty alleviation, others continue to grapple with high poverty rates. India is a developing country that suffers from severe disparity in wealth and development. While certain regions profit from the bloom of industrial and economic development, some States struggle because of the lack of education, social infrastructure, or resources to alleviate the challenges of poverty. However, do you know which is the poorest state in India? Based on several Poverty Indexes, Bihar is considered one of the country's poorest states.

• Students preparing for competitive examinations such as UPSC, Railways, or Bank Exams must be aware of which are the poorest states in India, as it is an important Static GK topic based on which questions might feature in these examinations,
• The poverty line in India is determined based on a method known as the Tendulkar Method, which considers expenditures on food, education, health, electricity, and transport.
• The states with the highest poverty rates are often those with large rural populations, where access to basic amenities and opportunities for income generation are limited.
• As of 2023, states such as Bihar, Jharkhand, Uttar Pradesh, and Madhya Pradesh have some of the highest percentages of their populations living below the poverty line. 
• These states face numerous challenges, including low literacy rates, inadequate healthcare, and limited infrastructure, which contribute to their high poverty rates.

It is also important to note that these states, despite their struggles, are also regions of immense potential. With the right policies and initiatives focused on education, healthcare, and economic development, they can make substantial progress in poverty reduction. The journey towards poverty eradication in these states is a crucial aspect of India's overall economic growth and development narrative.

Let us explore more about the Poorest States in India, understand how the poverty of different states is determined, as well as analyze the factors that contribute to poverty in each of the poorest states in India.

What is Poverty?

Poverty is a multifaceted concept that extends beyond a lack of income. It refers to a state of deprivation where individuals or communities lack the resources, means, choices, and power necessary to enjoy a basic standard of living and to participate fully in society. This includes limited access to quality education, healthcare, adequate food, clean water, proper sanitation, and secure housing. For example, an individual living in poverty may not be able to afford a balanced diet or necessary healthcare services, impairing their physical and mental well-being. It is important to note that poverty is a multidimensional concept – it extends beyond having a “lack of income.” Therefore, income or GSDP is not the single measure to determine poverty of any state in India.

BPL Line – What is the Below Poverty Line in India?

BPL stands for "Below Poverty Line," a benchmark set by the government of India to identify individuals and households in need of government assistance and aid. The BPL line is a monetary threshold, and families whose income falls below this level are classified as being below the poverty line. The BPL line is determined using various methods. One of the most prominent is the Tendulkar Methodology, named after the late economist Suresh Tendulkar. This approach considers spending on food, education, and health, apart from the bare calorie intake that was used earlier.

As of 2009-2010, a family earning less than Rs. 27.20 per day in rural areas or less than Rs. 33.33 per day in urban areas was considered below the poverty line according to the Tendulkar Methodology. Currently, the below poverty line in urban areas is fixed at INR 1,286, and in rural areas, it is INR 1059.42 per month. However, it is important to note that the poverty line can vary widely from state to state due to differences in the cost of living and other factors. The BPL line helps to target social benefits and welfare programs more effectively, but it has also been criticized for being too low and not accurately reflecting the real cost of living in many parts of India.

10 Poorest States in India by Poverty Rate

Fifth Poorest State in India – Bihar

Bihar, with approximately 33.74% of its population living below the poverty line, ranks as the fifth poorest state in India. The high poverty levels in Bihar can be attributed to factors such as institutional and technical deficiencies, illiteracy, and structural challenges in the agricultural sector. The poverty rates within Bihar vary across districts, with Kishanganj recording the highest poverty rate of 64.75% and Patna the lowest at 29.20%. The state's struggle with poverty is further exacerbated by a lack of access to quality education and healthcare, making it one of the most underdeveloped states in India.

Know more about the State and its economy with Bihar GK topics. 

Second Poorest State in India – Jharkhand

Jharkhand, previously a part of Bihar until 2000, ranks as the second poorest state in India. The poverty level in Jharkhand is around 42.16%, surpassing the national average. The state's social indicators, including literacy, enrollment rates, infant mortality, and child nutrition, lag behind the rest of the country. Addressing these issues is crucial for uplifting the state from its impoverished condition. The state's economy is primarily agrarian, and a lack of industrialization and employment opportunities further compounds the problem of poverty.

State of Poverty and Malnourishment – Uttar Pradesh

Uttar Pradesh, the largest state in India, also ranks among the poorest states. With a poverty rate of 37.08%, the state faces persistent challenges related to poverty, disease, and high child malnourishment rates. Early marriages, particularly among girls, contribute to these issues. Addressing poverty and improving nutritional outcomes is crucial for the overall development of the state. Despite being one of the most populous states in India, Uttar Pradesh struggles with a lack of adequate infrastructure and social services, contributing to its high poverty rate.

Struggling with Poverty – Chhattisgarh

Chhattisgarh, another impoverished state, witnesses around one-third of its population living below the poverty line. The poverty level in Chhattisgarh stands at 39.93%, highlighting the pressing need for development interventions. Although the state contributes only 15% of the total steel production in India, it grapples with significant poverty due to limited economic opportunities. The state's rural areas, in particular, suffer from a lack of access to basic amenities and services, contributing to its high poverty rate.

Battling Economic Backwardness – Manipur

Manipur, the third poorest state, exhibits a poverty rate of approximately 36.89%. The state's economic backwardness stems from challenges such as inadequate infrastructure, including electricity, transportation, and communication networks. These factors contribute to the state's struggle for economic development, resulting in high poverty rates. Despite its rich cultural heritage and natural resources, Manipur's development has been hampered by a lack of investment and infrastructure development.

Fourth Poorest State in India – Arunachal Pradesh

Arunachal Pradesh, the largest state among the northeastern states, ranks as the fourth poorest state in India. Approximately 34.67% of its population lives below the poverty line. The state's remote location and limited access to major production centers hinder economic progress and contribute to its high poverty levels. Despite its abundant natural resources, Arunachal Pradesh struggles with a lack of infrastructure and investment, leading to high levels of poverty.

Poverty and Educational Backwardness – Odisha

Odisha, with a poverty rate of 29.04%, faces challenges related to educational backwardness and inadequate female literacy rates. Half of the state's population is educationally disadvantaged, and the lack of educational opportunities hampers overall development. Efforts to improve access to education and enhance female literacy are crucial for reducing poverty in Odisha. Despite its rich mineral resources, Odisha's development has been uneven, leading to high levels of poverty in many parts of the state.

Limited Economic Progress – Assam

Approximately 32.07% of Assam's population lives below the poverty line. The state's location, distant from major production centers, acts as a barrier to economic progress. Additionally, climatic conditions in Assam also affect the state's development prospects. Addressing these challenges is essential for uplifting the state and improving the living standards of its population. Despite its rich cultural heritage and natural resources, Assam struggles with a lack of infrastructure and investment, contributing to its high poverty rate.

Tribal-State – Madhya Pradesh

Madhya Pradesh, often referred to as the tribal state of India, exhibits a poverty rate of approximately 36.07%. The state is home to the largest number of Scheduled Tribes in the country. Forest-dependent rural communities, particularly tribal populations, heavily rely on forest resources for subsistence, income, and employment. Measures to diversify livelihood options, promote sustainable development, and provide better access to basic amenities are essential for poverty alleviation in Madhya Pradesh.

Disparities Within Urbanization – Karnataka

Karnataka, despite being a state with rapid urbanization, records a poverty rate of 13.2%. While urban areas like Bangalore have experienced significant development, disparities exist in other regions, such as North Karnataka. Tackling urban-rural disparities, improving infrastructure, and promoting inclusive growth are key strategies for reducing poverty and ensuring balanced development in Karnataka. Despite its economic progress, Karnataka's development has been uneven, leading to high levels of poverty in many parts of the state.

How is Poverty of a State in India Determined?

The poverty of a state in India is typically determined by two main methods – the income-based method, using poverty line benchmarks, and the MPI. 

• The income-based approach sets a minimum income threshold or poverty line. Households earning below this line are considered poor. As per the Tendulkar Committee (2009), a benchmark of Rs. 816 per capita per month in rural areas and Rs. 1000 in urban areas was established.
• On the other hand, India has also adopted the Multidimensional Poverty Index or MPI, introduced by the UNDP. The MPI looks at multiple factors like education, health, and living standards to assess the extent and depth of poverty.

For example, Bihar, one of the poorest states in India, not only has a significant portion of its population earning below the poverty line but also scores high on the MPI due to high deprivation in education, health, and living standards. This comprehensive view helps policymakers to tailor interventions that address the multiple facets of poverty, rather than income alone.

What is the Multidimensional Poverty Index (MPI)?

The Multidimensional Poverty Index (MPI) is an international measure of acute poverty developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP). Instead of focusing solely on income, the MPI considers multiple deprivations that a poor person faces at the same time. It includes ten indicators categorized into three dimensions – 

1. education (years of schooling, school attendance)
2. health (child mortality, nutrition) and 
3. living standards (cooking fuel, toilet, water, electricity, floor, and assets). 

For instance, a family might be suffering from multiple deprivations – the children are not enrolled in school (education deprivation), the family members are undernourished (health deprivation), and they lack access to clean water (living standard deprivation). The MPI aggregates these deprivations to provide a fuller picture of people living in poverty.

The Tendulkar Method of Determining Poverty

The Tendulkar Method for determining poverty in India was proposed by the Tendulkar Committee in 2009, which was headed by the late economist Suresh Tendulkar. This method marked a significant shift from the previous poverty estimation methods used in the country.

Previously, poverty in India was estimated based on calorie intake. The Tendulkar Committee, however, suggested that poverty be measured based on consumption expenditure, taking into account spending on food, education, health, electricity, and transport. This approach was intended to provide a more comprehensive understanding of poverty by considering a wider range of basic needs beyond just food.

The Tendulkar Method set the urban poverty line at Rs. 33 per day and the rural poverty line at Rs. 27 per day. These figures were based on the monetary equivalent of a consumption basket that would provide an individual with the minimum recommended calorie intake, along with essential non-food items. The Tendulkar Method has been praised for its more holistic approach to poverty measurement. However, it has also faced criticism for setting the poverty line too low, which could potentially underestimate the extent of poverty in the country.

Poorest States & Union Territories in India with Percentage of Population Below Poverty Line

The percentage of the population living below the poverty line directly reflects the state of poverty in any given state. The following is a list of states and Union Territories highlighting the percentage of people living below the poverty line –

State/UT	Rural Poverty Line (Rs)	Urban Poverty Line (Rs)	% of the Population Below the Poverty Line
States
Kerala	1018	987	0.71
Goa	1090	1134	3.76
Sikkim	930	1226	3.82
Tamil Nadu	880	937	4.89
Punjab	1054	1155	5.59
Himachal Pradesh	913	1064	7.62
Mizoram	1066	1155	9.80
Andhra Pradesh	860	1009	12.3
Haryana	1015	1169	12.3
Karnataka	902	1089	13.2
Telangana	–	–	13.74
Maharashtra	967	1126	14.85
Tripura	798	920	16.65
Uttarakhand	880	1082	17.72
Manipur	1118	1170	36.89
Gujarat	778	923	18.60
West Bengal	1783	2381	21.43
All India	816	1000	21.92
Arunachal Pradesh	930	1060	24.27
Nagaland	1270	1302	25.23
Odisha	695	861	29.35
Rajasthan	905	1002	29.46
Chhattisgarh	738	849	39.03
Assam	828	1008	31.98
Meghalaya	888	1154	32.67
Madhya Pradesh	771	897	36.65
Uttar Pradesh	768	941	37.79
Jharkhand	748	974	42.16
Bihar	932	1152	51.91
Union Territories
Andaman and Nicobar Islands	–	–	4.30
Lakshadweep	–	–	1.82
Puducherry	1301	1309	1.72
Delhi	1145	1134	4.79
Jammu and Kashmir	891	988	12.58
Chandigarh	–	–	5.97
Dadra and Nagar Haveli	–	–	27.36
Daman and Diu	–	–	6.82

Note – The poverty line is measured in Indian Rupees (INR) and the percentage of the population below the poverty line is based on the Multidimensional Poverty Index in 2021. The "-" symbol indicates that the data is not available.

List of Poorest States in India by GDP

The Gross State Domestic Product or GDSP is an indicator of the “income” of a particular state. However, as mentioned above, this GDP is not the only benchmark that decides whether a state is poor or not. Below is a detailed list of the poorest states in India based on their GDP along with the factors that propel poverty in that State – 

State	GDP (in billion USD, 2023)	Factors Contributing to Poverty
Bihar	3.37	Dependence on agriculture: Bihar's economy heavily relies on agriculture, which employs almost 80% of the state's workforce. Limited diversification in other sectors contributes to poverty.
Sikkim	4.3	Agrarian economy: Sikkim's economy is largely based on agriculture, with crops such as maize, millet, rice, tea, and cardamom. Limited industrial infrastructure hinders economic growth and development.
Mizoram	4.6	Dependence on public administration, agriculture, and construction work: These sectors play a significant role in Mizoram's economy. Limited industrial development and infrastructure contribute to poverty.
Goa	11	Slow growth rate: Despite being a popular tourist destination, Goa's GDP per capita is 2.5 times lower than the national average. The state's slow growth rate and overreliance on tourism contribute to poverty.
Uttarakhand	24.786	Dependence on agriculture: Agriculture is one of the most important economic sectors in Uttarakhand. The state produces crops such as basmati rice, wheat, soybeans, and oilseeds.
Tamil Nadu	20	Dependence on agriculture and textile industry: Tamil Nadu has a strong presence in agriculture and is one of India's top producers of agricultural goods. The textile industry also contributes significantly to the economy.
Andhra Pradesh	35	Dependence on agriculture and allied industries: Agriculture plays a significant role in Andhra Pradesh's economy. The state exports various agricultural goods and has a growing industrial sector in pharmaceuticals and automobiles.
Haryana	35.5	Dependence on agriculture: Haryana's economy is primarily centered around agriculture and allied industries. The state is known for its production of wheat, rice, sugar cane, fruits, and vegetables.
Himachal Pradesh	40.7	Dependence on agriculture and hydropower: Agriculture and hydropower are vital sectors in Himachal Pradesh's economy. The state's agricultural activities and abundant hydropower resources contribute to its economy.
Punjab	40	Reliance on agriculture: Punjab's economy is primarily based on agriculture. The state's fertile lands and vast irrigation systems have made it a significant contributor to India's food grain production.
Karnataka	240	Slow GSDP growth: Despite being a state with rapid urbanization, Karnataka has experienced slower GDP growth compared to other Indian states. The state's development has been uneven, leading to high levels of poverty.

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