The focus of the paper is on two interrelated but distinct issues of chronic poverty and malnutrition. It analyses the trends in extent, depth and severity of poverty and also malnutrition in rural and urban areas during the last few decades. The incidence of chronic poverty is higher than that of very poor in both rural and urban areas but the former is lower than severe malnutrition. Although the risk of malnutrition decreases with household income (standard of living index), elimination of poverty cannot ensure eradication of malnutrition. The incidence of child malnutrition is particularly high among poor households where mothers have poor nutritional levels, less education and poor access to antenatal care. The lowest incidence of child malnutrition is not in the richest but in the middle income states with progressive social policy. In the 1990s, with faster urban economic growth, urban poverty declined faster, but inter quintile urban inequality and rural-urban inequality worsened. Poverty, chronic poverty and malnutrition, together, got concentrated in a few geographical locations and among specific social groups.