Poverty estimation has profound implications for reckoning of overall development in India. The poverty estimation exercise has to be at both country specific and aggregated levels. The quantification methodology employed for poverty estimation should withstand the scrutiny of logic, evidence and morality so that it meets the demands of global justice. The choice of poverty line can influence the diagnosis and interpretation of performance on the poverty front. Against this background, this study attempts to examine the sensitivity of the distributional profile of households in eight Indian states to a unit change in poverty line estimated by the Tendulkar committee in order to bring out the impacts of altering the poverty line, the density effect around the poverty line to understand the crowding effect and also attempted to estimate the timeline for the poor to escape absolute poverty.
It was found that the developed states have exhibited higher sensitivity as compared to the neo-patrimonial states to a unit change in the poverty line. It is established that the inclusion error will decline, and exclusion error will increase if we move down the poverty line over a period of time as the poor people in the poverty zone are escaping at varied rates across space and time.
Based on the Kernel density estimation, the density ratio and decile densities below the poverty line were computed. The developed states like Kerala, Tamil Nadu and Himachal Pradesh have exhibited higher density ratio and the poverty tail is flattening in these states compared to the neo-patrimonial states like Bihar, Odisha and Rajasthan. It is also found that the mean MPCE for poor population has increased faster but density has remained a deeper concern for the developed states,which indicates widening of inequality. It is also ascertained that bulk of the wealth created is getting concentrated or is not reaching certain sectors or places in the backward states.
Changing the poverty line affected the developed states more than the underdeveloped states. More number of poor in the progressive states ended up as non-poor when we move down the poverty line and similarly a greater number of non-poor are being classified as poor when we move the poverty line upward. The backward states do not suffer as much as the progressive states from inclusion and exclusion error as the rate at which the income levels grow in the backward states is lesser.