The contrast between the STs and SCs in terms of these components is striking. Between the ST and non-scheduled households, structural differences account for about 59 per cent of the difference in their poverty, while between the SC and non-scheduled households the larger component is differences in characteristics (about 55 per cent).

Disaggregating these components reveals that, first, between the ST and non-scheduled households, the highest contributor to the characteristic component is location (that is, the former are concentrated within remote areas with fewer remunerative options), followed by education, and then occupation; second, a very large share of the structural component is also attributable to location (even within the same location, STs earn lower amounts), with returns to occupation, demographic characteristics and education accounting for relatively small shares.

Between the SC and non-scheduled households, occupation accounted for the largest share of the characteristic component, followed by education and then land. Within the structural component, however, the largest component is location, followed by occupation and education. So, although SCs are more dispersed than the STs, they are also subject to lower returns on their endowments relative to the reference group.

Given our decomposition of poverty incidence gaps, the differences in endowments could be a result of oppression of some disadvantaged groups (social exclusion of STs and SCs restricted their access to education over a long period and restricted their children’s access to it). The differences in the returns to various endowments, on the other hand, may reflect discretionary valuation of performance and thus elements of current discrimination. This classification is, however, problematic insofar as current performance is shaped by personal identity and motivation in complex ways. In particular, social exclusion and discriminatory reward systems may undermine self-confidence, and consequently performance.

... contd.