Dynamics of Rural Poverty in Odisha

The post-reform era in Odisha’s economy has seen a major structural break in the year 2004-05. The economy achieved a high growth in NSDP especially in the farm sector since 2004-05 and a high reduction in Rural Poverty. Hence the major proposition which the article raises is whether the farm growth resulted in a reduction in poverty. The 1st period (1993-94 to 2004-05) has seen a distress in the farm sector and slow reduction in poverty while the 2nd period (2004-05 to 2011-12) witnesses growth in the farm sector and a higher decline in poverty. In the 1st period, there is a distress driven labor mobility from farm to nonfarm sector while the 2nd-period witness mobility of labor within farm sector. The growth in the farm sector in the 2nd period resulted in declined in poverty among all the economic groups in rural Odisha. The growth effect of the poverty decomposition is higher than the distribution impact. The state has witnessed huge disparities in Poverty among the regions. Except for rising in farm growth, factors which cause the reduction in poverty are an increase in public spending and rise in farm productivity since 2004-05.