Unveiling Poverty Dynamics in India: Examining Convergence and Determinants at Sub-National Level

This paper tries to investigate the question of whether the poverty ratio across Indian states is converging in the post-2000s. We addressed this question of spatial convergence of the poverty ratio using unconditional convergence over the period 2004-05 to 2018-19 for 18 major states of India, considering both rural and urban regions. We used the unit-level data of NSSO's Consumer Expenditure Surveys (CES) for the 61st, 68th and PLFS 2018-19 rounds for the analysis. Besides, we try to assess the driving factors of poverty through a panel regression model. The results reveal that in the first period from 2004-05 to 2011-12, Indian states experienced a divergence in the overall poverty ratio and rural poverty. However, the second period, 2011-12 to 2018-19, witnessed no specific trend of convergence or divergence across states. Again, in the case of urban poverty, there is no particular pattern of poverty convergence or divergence during both periods. The study shows that the Gini coefficient, educational expenditure, household size, infant mortality, literacy rate, MPCE, primary-sector income and per capita power availability are the significant determinants of poverty in India.