Measuring efficiency of Indian states for reducing poverty using data envelopment analysis

Abstract

Sustainable development goals adopted by the United Nations in 2015 emphasize on poverty reduction and inclusive growth. In India, development policies focusing on poverty reduction have been implemented since independence. However, there is evidence of rising inequality and slowing down of the rate of poverty reduction, after the introduction of economic reforms. The state governments in India have an important role to play in poverty alleviation. Thus, it is necessary to measure the performance of the states in respect of the same. Data envelopment analysis is used by considering input variables, namely, growth, development expenditure, irrigation, and government performance. Percentage of non-poor is used as an output variable. This paper measures efficiency with which poverty has been alleviated in 19 states covering 90% population, for the years 2006, 2010, and 2014. Resource-rich states are found to be inefficient, whereas states with resource scarcity use them efficiently. Moreover, poor states with lower per capita gross domestic product (GDP) are found to be more efficient as compared to those with higher per capita GDP. The states with high incidence of poverty are found to be catching up with states with low incidence of poverty. It is found that inequality and high indebtedness adversely impact the efficiency of states.

Efficiency Comparison of Pro-Growth Poverty Reduction Spending before and during the COVID-19 Pandemic: A Study of Regional Governments in Indonesia

“…Yet, they ignored the importance of poverty reduction as an essential output indicator in measuring government efficiency. On the other hand, studies applying poverty reduction as an output variable have been well documented (Ambarkhane et al 2020;Fonayet et al 2020;Yang et al 2021;and Cyrek 2019). However, they did not acknowledge the role of economic growth in measuring government efficiency.…”

“…On the other hand, studies have used poverty reduction as the output to measure government efficiency. Ambarkhane et al (2020) measured the efficiency of government spending in increasing the percentage of non-poor people in India in 2006, 2010, and 2014 by using the DEA method. Likewise, Fonayet et al (2020) used the DEA method to measure the efficiency of government spending in reducing poverty in EU-28 countries from 2007 to 2015.…”

“…A pro-poor program is a government program that sides with the interests of the poor; a pro-poor program aims to alleviate poverty. Several studies have raised the topic of measuring the efficiency of government spending for poverty alleviation, such as whether pro-poor spending has been efficient in reducing poverty (Ambarkhane et al 2020;Fonayet et al 2020).…”

Does financial inclusion impact socio-economic stability? A study of social safety net in Indian slums

“…Mindful of the vast migration, the Central and State governments in India have taken extraordinary policy decisions to smarten the urban scene of the country (Ambarkhane et al. , 2020; Breitkreuz et al.…”

“…Mindful of the vast migration, the Central and State governments in India have taken extraordinary policy decisions to smarten the urban scene of the country (Ambarkhane et al, 2020;Breitkreuz et al, 2017). Therefore, India's social welfare schemes, especially for the urban poor, play an imperative role in supporting economic growth and sustainable urban development.…”