Income and Poverty in uttarakhand

WHERE IS UTTARAKHAND MONEY IN DELHI OR MUMBAI

Income and Poverty

It seems that Uttarakhand is a fast growing state with most of the growth taking place in the industrial and services sectors. Although more than half of the workers are engaged in agriculture sector , its share in GSDP was 27.01 per cent while the share of secondary and tertiary sectors was 29 and 44 per cent respectively.

Per capita income is a summary measure of the level of economic development of any region, The tentative per capita NSDP at factor cost in 2003-04 was Rs 16,528 (at current prices) as compared to the national average of Rs 20,989. Uttarakhand thus lags behind the national level of development. However, the gap between the State and national level in this respect has been narrowed since the creation of the State. This fact has also been noted by NCAER in their Draft Uttarakhand Development Report.

Although the per capita estimates indicate a rather healthy picture, the fact remains that poverty levels are quite high in the State. One problem with official estimates of per capita net domestic product in Uttarakhand is that they relate to income “originating”, and not to the income “accruing” in the state. It is quite possible that income may originate in Uttarakhand, but may accrue elsewhere. This is especially so in the case of income from forestry, which accounts for about 20 percent of the contribution from primary sector. Only a small part of this income, 10 to 15 percent, is retained in the State by way of wages to local workers. Similar is the case with mining and quarrying sector, accounting for another four percent of net domestic product from commodity producing sectors.

A second factor to be kept in mind is the existence of sharp regional differences with some areas of the State, especially the more remote and interior hill areas being economically quite backward. Thus Nainital or Dehradun account for a very high per capita income, while the interior areas of Uttarkashi, Pithoragarh, Chamoli or Bageshwar would have stark poverty. Therefore, the per capita NSDP figures do not give a correct picture of the privations that people face.

This last assertion is borne out by the poverty data for Uttarakhand. The Planning Commission has recently released estimates of population below the poverty line in various states and at all- India level based on the 1^st Round of household consumer expenditure survey carried out by the NSSO in 2004-05. It has presented two separate estimates – one based on uniform recall period (URP) in which consumer expenditure data for all items are collected from 30-day recall period, and the other based on mixed recall period (MRP) in which consumer expenditure data for five non-food items are collected from 365-day recall period and the rest from 30-day recall period. The comparative results for Uttarakhand, Himachal Pradesh and all-India in both rural and urban areas are given below.

Percentage of Population Below Poverty Line: 2004-05

State	URP			MRP
	Rural	Urban	Total	Rural	Urban	Total
Uttarakhand	40.8	36.5	39.6	31.7	32.0	31.8
Himachal Pradesh	10.7	3.4	10.0	7.2	2.6	6.7
All-India	28.3	25.7	27.5	21.8	21.7	21.8

URP refers to uniform recall period; and MRP to mixed recall period

Poverty levels in Uttarakhand are much higher than those at the all-India level or in Himachal Pradesh in both rural and urban areas. This is true irrespective of the estimate we rely upon – whether based on URP or MRP. According to URP, rural poverty in Uttarakhand is estimated at 40.8%, urban poverty at 36.5% and total poverty at 39.6%. The corresponding figures according to MRP are 31.7%, 32.0% and 31.8% respectively. The all-India poverty estimates are at least 30% lower on both the counts. Poverty levels in Himachal Pradesh, on the other hand, are only a fraction – about one-fourth in rural areas and one-eleventh to one-fifteenth in urban areas – of the Uttarakhand levels.

Similar results were obtained in a survey of rural households conducted by the Rural Development Department to identify BPL families. This survey estimated the proportion of BPL families in rural areas of Uttarakhand at 36.5%.

What these data clearly point to is the need to give topmost priority to creating livelihood opportunities for the people, in both rural and urban areas, even while accelerating economic growth. Growth clearly has to be an inclusive process.

Workers' Classification

The Work Participation Rate (WPR), which is defined as the percentage of total worker to total population is 36.93 percent for Uttarakhand and 39.30 percent for India as per 2001 Census. Thus it is evident that the dependence ratio (proportion of non-workers) is higher in Uttarakhand. It is interesting to note that in Uttarakhand there is a perceptible decline in the proportion of main workers and significant increase in proportion of marginal workers: the latter has increased from 5.56% in 1991 to 9.54% in 2001.

This fact also has another aspect to it. The best of Uttarakhand, people, who are highly qualified, leave the State for better employment/business opportunities. The "Brain Drain" from Uttarakhand is adversely affecting the State’s efforts in launching any ambitious scheme of development.

The economic Census 2005 reveals that performance of Uttarakhand has been better than all India average in terms of growth of employment as well as growth of enterprises. Interestingly, in both cases the rural sector has performed much better than the urban sector. (NCAER,Draft Uttarakhand Development Report) With this background the State envisions to achieve within a period of 10-15 years a level of economic development for the state that will provide opportunities for its people to achieve a good quality of life and social progress while preserving its pristine beauty and natural wealth.