POVERTY

INTRODUCTION
Poverty is a challenge not only for India, but for the entire world as more than one-
fifth of the world’s poor live in India alone and are unable to meet even their basic
needs. The five year plans have always stressed on upliftment of poor people and
achieving a minimum standard of living for all. However, poverty is still one of the
most serious problem.
Meaning of Poverty.
Poverty refers to a state in which an individual is unable to fulfil even the basic
necessities of life.
The minimum requirements include food, housing, clothing, education and health. In
a country, where a big mass of the population is deprived of even minimum
amenities of life for a very long period, then such a country suffers from a vicious
circle of poverty.
Who are Poor?
Poverty is harsh reality for a large section of the Indian Population. Poverty in India
has been studied from two points urban and rural.
Poor in Urban areas. Poor people include push cart vendors, street cobblers, rag
pickers, beggars etc.,
1. They possess few assets
2. They reside in kutcha houses
3. The poorest of them do net even have such dwellings
4. The urban poor are largely the overflow of the rural poor who had migrated to
urban areas in search of alternative employment and livelihood.
Poor in Rural Areas, People include
1. landless agricultural labourers,
2. cultivators with very small landholdings,
3. Landless labourers engaged in a variety of non-agricultural jobs
4. Tenant cultivators with small land holdings.
5. Many rural people do not get to have even two meals a day.
Common characteristics of Poor people.
1. Hunger, starvation and malnutrition.
2. Poor Health
3. Limited Economic Opportunities. They have very limited economic
opportunities due to lack of literacy and skills. So, they face unstable
employment. They are not able to negotiate their legal wages from employers
and are exploited.
4. Debt trap.
5. Lack of facilities of electricity and water.
6. Gender Inequality. Gender inequality prevails within the family in regard to
participation of gainful employment, education and in decision-making. Poor
women receive less care on their way to motherhood.
7. Bigger families.

Measures of Poverty:

The problem of poverty can be overcome only when poor people are
identified. There are two measures to determine the extent of poverty.
1. Relative Poverty
2. Absolute Poverty

Relative Poverty: refers to poverty of people, in comparison to other

people, regions or nations. It helps in understanding the relative position
of different segments of population. It only reflects the relative position of
different segments of the population in the income hierarchy. It does not
consider, how poor the poor person is or whether he is deprived of the
basic minimum requirements of life or not.
Ex. If Ram has lower income in comparison to Shyam, then we can say
Ram is relatively poor.

Absolute Poor: Refers to the total number of people living below poverty
line. According to absolute measure, around 23.6% of India’s population
is below poverty line. The concept of absolute poverty is relevant for the
less developed countries like India, where there is abundance of poverty.
It helps to measure the number of poor people.
The method of “Poverty line” used to measure absolute poverty does not
differentiate between the very poor and the other poor. It does not
consider social factors that generate and are responsible for poverty, like
illiteracy, ill health, lack of access to resources, discrimination or lack of
civil and political freedoms.

Poverty Line:
In India, ‘poverty Line’ is used as a standard to measure the no.of poor
people.
 In poverty line, a standard is fixed in terms of minimum level of
consumption.
 Absolute poverty refers to a situation when a person falls to reach
this minimum consumption level.
 In context of India, proportion living below ‘Poverty Line’ gives the
absolute measures of poverty.
Measurement of Poverty: Pre and Post Independent India.
In the pre-Independence period: Dadabai Naoroji was the first person to discuss the
concept of poverty line. He used the ‘Jail Cost of Living’ to calculate the poverty
Line.
 He termed this consumption cost as ‘Jail cost of living’. As only adults stay in
jail, he divided the population into two parts:
 He assumed that 1/3rd of total population consist of children. ½ of them
consumed very little, while the other half consumed half of the adult diet.
 2/3rd population consisted of adults and they consume full diet.
 Weighted Average of consumption of the three segments: The average
poverty line come out to be three-fourth of the adult jail cost of living.
 1/6 X Nil Diet + 1/6 x Half-Diet + 2/3 x Full Diet
 1/6 X 0 + 1 /6 + 1 / 2 + 2/3 x1=3/4.
In Post-independent India there have been several attempts to identify the
no.of poor in the country.
 In 1962, the planning commission formed a study group.
 In 1979, “Task Force on Projections of Minimum Needs and Effective
Consumption Demand’ was formed.
 In 1989, an ‘expert Group’ was constituted for the same purpose.
Concept of Poverty Line.
Poverty Line is a cut-off point on the line of distribution, which usually divides the
population of the country as poor and non-poor.
The concept of poverty line is used to measure the extent of poverty in a country.
People having income below the poverty line are called “Poor” and
People with income above poverty line are called “Non-poor”.
Poverty line tries to capture the socially acceptable minimum living standards, which
the society tries to fulfil.
Determination of Poverty Line.
In India, ‘Monthly Per capita Expenditure or MPCE” method is used to determine the
poverty line. According to this method, monetary value of the minimum calorie
intake is calculated.
Minimum Calorie intake: 2400 calories per person per day rural area
2100 calories per person per day in urban area
Monetary value of min. calorie intake. MPCE in 2011-12 is worked out to be
Rs.816 per person in rural area
Rs.1,000 per person in urban areas.
Poverty Line Divides the poor from the Non-poor.
Categorising Poverty.
1. Chronic poor: It includes people who are always poor and those who are
usually poor.
2. Transient poor: it may be classified as churning poor (Who regularly move
in and out of poverty) and occasionally poor (who are rich most of the time
and poor sometimes)
3. Non-poor. They are never poor.

The Number of Poor in India

When the number of poor is estimated as the proportion of people below the
poverty line, it is known as ‘Head Count Ratio’. Head Count Ratio is calculated
by dividing the no.of people below the poverty line by the total population.
No.of below poverty line . In 1973-74, 321.3 million people were below the
poverty line. In India 2004-05, this number came down to 238.5 million.
Proportion of people Below Poverty Line: In terms of proportion, in 1973-74,
54.9% of the total population was below the poverty line. In 2004-05, it has fallen
to 21.8%
British Rule: Adverse Effect on Living Standard of Indians.
1. British Government systematically destroyed Indian Industries.
2. More than 70% of Indians were engaged in agriculture
3. Under the British rule, India began to export food grains
Causes of Poverty:
1. Population Explosion
2. Low level of economic development
3. Poor state of agriculture
4. High Illiteracy Rate
5. High Level of Unemployment
6. High Level of Indebtedness.
7. Inequalities of Income
8. Inflation.

Measures to remove poverty

1. Acceleration of Economic Growth.

2. Reducing inequalities of Income
3. Population control
4. Agriculture. Development
5. More Employment opportunities
6. Land Reforms
 Government Approach to Remove Poverty.
1. Growth Oriented Approach
2. Poverty Alleviation Programme
3. Minimum Needs Programme.
1. Growth Oriented Approach:
This approach was initiated from the first five year plan. This approach
is based on an expectation that effects of economic growth would
spread to all sections of the society and will trickle down to the poor
sections also.
It was felt that rapid industrial development and transformation of
agriculture through green revolution in select regions, would benefit the
underdeveloped regions and more backward sections of the
community.
However Growth-oriented approach proved to be ineffective
because:
i. Population growth resulted in a very low growth in per capita
incomes.
ii. Green Revolution intensified the disparities regionally and
between large and farmers.
iii. There was unwillingness and inability to redistribute land
iv. The benefits of economic growth did not trickle down to the poor
Due to ineffectiveness of the Growth approach, policy makers started thinking that
income and employment for the poor could be raised through specific “Poverty
Alleviation Programmes”.
2. Poverty Alleviation Programme:
This second approach has been initiated from the Third Five Year Plan
and progressively enlarged since then. The government has
introduced a variety of programmes for reduction of poverty.
3. Minimum Need Programmes: This approach has been initiated from
the Fifth Five Year Plan. It aims to provide minimum basic amenities to
the people.
Programmes under this approach are expected to supplement the
consumption of the poor, create employment opportunities and bring
improvements in health and education.
The major programmes that aim at improving the food and nutritional
status of the poor are:

i. Public distribution System

ii. Integrated Child Development Scheme; and
iii. Midday Meal Scheme.
Poverty Alleviation Programmes in India: The govt., has specifically
designed anti-poverty programmes for generation of both self-employment
and wage employment.
1. Self Employment Programmes:
i. Rural Employment Generation Programme(REGP): This
programme was started by the govt., to create self-employment
opportunities in the rural areas and small towns.
a. It was implemented by Khadi and Village Industries
Commission.
b. Under this programme, one could get financial assistance in
the form of bank loans to set up small industries.
ii. Prime Minister’s Rozgar Yojana (PMRY): Under this
programme, the educated unemployed from low income families
in rural and urban areas were given financial help to set up any
kind of enterprise that generate employment.
a. PMRY attempted to generate employment by setting up 7
lakh micro-enterprises during the Eighth Plan (1992-97)
b. By 2003-04, 3 million people get employment under this
scheme.
iii. Prime Minister Employment Generation Programme
(PMEGP):
The Indian govt., merged REGP and PMRY and introduced a
new scheme called PMEGP with effect from 01.04.2008. The
main objective of PMEGP are:
a. To generate employment opportunities in rural and urban
areas through setting up of new self-employment ventures;
and
b. To bring together widely dispersed traditional artisans and
unemployed youth and to give them self-employment
opportunities at their place.
iv. Swarna Jayanthi Shahri Rozgar Yojana (SJSRY): This
mainly aims at creating employment opportunities for both self-
employment and wage employment in urban areas.
a. This programme seeks to provide gainful employment
through encouraging the setting up of self-employment
ventures or provision of wage employment.
b. It is centrally sponsored scheme, which is funded on 75:25
basis, between the Centre and States.
Financial assistance was given to families or individuals
under the self-employment programmes. However, the
govt., changed this approach since the 1990s through the
programme “Swarnajayati Gram Swarozgar Jojana”.
v. Swarnajayanthi Gram Swarozgar Jojana (SGSY): It aims at
promoting micro enterprises and to bring the assisted poor
families above the poverty line, by organising them into Self-
Help Groups (SHGs)
 a. People who wish to benefit from this scheme, are
encouraged to form self-help group
b. Initially they are encouraged to save some money and lend
among themselves as small loans.
c. Later, through banks, the govt., provides partial financial
assistance to SHG’s. which then decide, whom the loan is to
be given, for self-employment activities.
2. Wage Employment Programmes:
i. Sampoorna Grameen Rozgar Jojana (SGRY): The scheme
aims to provide additional and supplementary wage employment
by undertaking labour intensive work, there by providing food
security and increasing nutritional levels.
a. Wages were paid as combination of food grains and cash.
b. The scheme of SGRY is open to all rural poor who need
wage employment and desire to do manual and unskilled
work in and around their village or habitat.
ii. National Food for Work Programme(NFFWP): This
programme was launched in 2004 with the objective of
intensifying the generation of supplementary wage employment.
a. NFFWP was initially implemented in 150 most back ward
districts of the country, to provide additional resources apart
from the resources available under SGRY
b. The programme was implemented as 100% Centrally
Sponsored Scheme
c. This programme was incorporated in Mahatma Gandhi
National Rural Employment Guarantee Act (MGNREGA) in
2005.
d. MGNREGA aims at enhancing the livelihood security of
people in rural areas by guaranteeing 100 days of wage-
employment in a financial year to a rural household whose
adult members volunteer to do unskilled manual work.
e. All those among the poor who are ready to work at the
minimum wage, can report for work in areas, where this
programme is implemented.
iii. National Social Assistance Programme (NSAP)
NSAP was initiated by the Central govt., on 15 th August, 1995 to
help a few specific groups. Under this, elderly who do not have
anyone to take care of them are given pension to sustain
themselves. Poor women who are destitute and widows are
also covered under this scheme.
 In addition to this some more anti- poverty programmes were
initiated by the govt., like
a. Pradhan Mantri Gram Sadak Yojana
b. Pradhan Mantri Gramodaya Jojana
c. Valmiki Ambedkar Awas Yojana etc.,

Critical evaluation of Poverty Alleviation Programmes:

1. Lack of resources: Compared to magnitude of poverty,
the amount of resources allocated for these programmes
is not sufficient.
2. Unequal distribution of assets: Due to unequal
distribution of land and other assets, the benefits from
poverty alleviation programmes have been appropriated
by the non-poor.
3. Improper Implementation: These programmes depend
mainly on govt and bank officials for their implementation.
Corruption, lack of training, pressure from local leaders
and non-participation of local level institutions, resulted in
improper implementation of the programme.
4. Lack of infrastructure: There was lack of infrastructure
facilities, such as schools, roads, power, telecom, IT
services, training institutions etc in the poverty stricken
areas.
5. Lack of Active Participation of Poor People: High
growth rate alone is insufficient to reduce poverty. In fact,
there is a need for active participation of the poor for
effective implementation of poverty alleviation
programmes.
Conclusion:
Poverty alleviation has always been accepted as one of India’s main challenges by
the policy makers and there have been certain positive results.
1. The absolute number of poor in the country has gone down and some states
have less proportion of poor than the national average.
2. There is improvement in terms of per capita income and average standard of
living
3. There has been some progress towards meeting the basic needs of poor
people.