During the period of fast economic growth in the 2000s, how did poor minorities fare? Some heartening answers have been provided in a Columbia University paper by Panagariya and More (Poverty by Social Religious and Economic groups in India and its Largest States, 1993-94 to 2011-12). Poverty has declined much faster for dalits and tribals than for upper castes or the overall population. And it has declined faster for Muslims than for Hindus or the national average.
Using the so-called Tendulkar poverty line (which is close to the UN and World Bank’s poverty line), the two economists calculate that in the seven years between 2004-05 and 2011-12, the all-India poverty ratio fell by 15.7%. The decline was much higher at 21.5% for dalits and 17.0% for tribals. The decline in the poverty ratio of the upper castes was much lower, at 10.5%.
This represents very substantial progress in poverty reduction. In the earlier decade, between 1993-94 and 2004-05, the decline was only 9.6% for dalits and 3.7% for tribals. The overall poverty ratio declined by 8.0%.
In as many as 12 states, the poverty ratio for dalits was actually lower than the national average. This is an astonishing achievement which shows that the caste gap, which once yawned as wide as the Brahmaputra, is now closing fast. In the Hindi heartland (nicknamed the BIMARU states), dalit progress continues to be modest. But in southern and western India, dalit poverty has fallen dramatically. It is lowest in Kerala and Tamil Nadu.
The news for Muslims is also good. Their poverty ratio declined in this seven-year period by 18.2%, faster than the 15.6% for Hindus. The absolute level of Muslim poverty remains higher than of Hindus. But the gap has almost halved, from 6.1% in 2004-05 to 3.5% in 2011-12. In rural areas, the difference has almost disappeared. But in urban areas it remains high. Muslim literacy and school graduation rates are far lower than for Hindus, partly because of lower school enrolment of girls. Unsurprisingly, this leads to a poverty gap between the two communities. The good news is that the gap in both poverty and school enrolment is closing.
The Sachar Committee in 2006 portrayed Muslims as a disadvantaged community, especially in education, bank loans and representation in government jobs. But it revealed that Muslim poverty was declining much more sharply than Hindu poverty. That trend has continued.
Panagariya and More provide a whopping surprise: in as many as seven states, Muslims are less poor than Hindus. This is unsurprising in Kerala, where Muslims have been major beneficiaries of migration to and remittances from the Gulf. But the ratio is even lower in Tamil Nadu. In four states it is below 10%, and in the fifth, Gujarat, it is 11.4%.
The authors also look into the rural and urban divide. Astonishingly, the rural Muslim poverty ratio is lowest of all in Gujarat, at 7.7%. This is much lower than the urban ratio, and so raises the question whether it is a statistical quirk. Muslims in Gujarat were victims of terrible violence in 2002, and many still feel unsafe. But their economic position has improved a lot.
Poverty is lowest for Jains, followed by Sikhs and Christians. So, most minorities do well in India. Muslims are an exception.
The Sachar Committee implied that Muslims were in some ways as badly off as the dalits. Not so for poverty ratios. In 2011-12, 25.4% of Muslims were below the poverty line, much better than dalits (29.4%) or tribals ( 43%).
Some caution is required in interpreting the data. First, 2004-05 was a bad monsoon year while 2011-12 witnessed a good monsoon, and this may exaggerate the achievement in this period. Second, the year-wise variations in some states look very steep, and seem to need a pinch of salt. Third, the government has decided to create a new poverty line, and all the data will have to be recast after that. Yet there can be no doubt that the overall trend is excellent.
Panagariya and More conclude that rapid GDP growth in the seven years between 2004-05 and 2011-12 must have been the main cause of record poverty reduction, with its attendant inclusiveness for dalits and Muslims. Some socialists will disagree, saying poverty fell mainly because of government schemes like MNREGA, the rural employment programme. But this cannot explain the especially sharp fall of poverty in urban areas. Income inequalities as measured by NSSO surveys do not show improvement, and indeed have worsened slightly. The main cause of declining poverty has been a rising tide of incomes benefiting all sections. dalits and Muslims have benefited most.