Submitted To: Submitted By:

Dr. Mahima Sharma Amit Gupta

 Acknowledgement

I take immense pleasure to acknowledge the efforts of the following people who helped to make
this project a reality. I express our gratitude for their suggestions, guidance and intellectual
influence.
I express our sincere thanks to Dr Mahima Sharma, Core Faculty, for making this project a
reality.
I am thankful to all Lecturers for their help and kind co-operation throughout the course. Last,
but not the least, I would like to thank my parents and friends who always supported in all our
endeavors.

Amit Gupta
 Table of Contents
Acknowledgement......................................................................................................2

Table of Contents....................................................................................................... 3

INTRODUCTION...........................................................................................................5

Poverty has been described as a situation of “pronounced deprivation in well being”

and being poor as “to be hungry, to lack shelter and clothing, to be sick and not
cared for, to be illiterate and not schooled…Poor people are particularly vulnerable
to adverse events outside their control. They are often treated badly by institutions
of the state and society and excluded from voice and power in those institutions.”
(IBRD, 2000-2001: 15.) Using income as a measure of poverty, the World
Development Report (2000-01: 3) refers to the “deep poverty amid plenty” in the
world and states that a fifth of the world’s people live on less than $ 1 a day, and
44% of them are in South Asia. .................................................................................5

Lack of access to resources or assets is a unifying characteristic of poverty in all its

manifestations. The poor lack ownership of or access to assets such as land, water,
forest, dwelling units, credit, literacy, longevity, voice and capital-both physical and
social. Those who are severely below the poverty line are largely involved in
subsistence type activities for which they get exploitatively poor returns despite
suffering extreme physical hardship and undertaking grave risks so as to earn a
meager income. Since earnings are below even the margins of existence,
expenditure and survival needs exceed income. This often results in the need to
borrow small amounts of money at usurious interest rates of as much as 120% per
annum (Mehta, 1996b: WS 82 ) When borrowing is not possible, hunger is suffered.
Their inability to change the power relationships results in scarcely available
common resources (such as even drinking water) or public funds meant for poverty
alleviation being misappropriated and diverted through manipulation by the locally
powerful or corrupt. Since there are no mechanisms for grievance redressed this
could result in social tension, despair or a combination thereof.................................5

Poverty in India...........................................................................................................6

Problems of Rural Poverty..................................................................................10

Problems of Urban Poverty.................................................................................10

Poverty in the States ...............................................................................................11

CONCLUSION............................................................................................................14

References................................................................................................................15
 INTRODUCTION

Poverty has been described as a situation of “pronounced deprivation in well being” and being
poor as “to be hungry, to lack shelter and clothing, to be sick and not cared for, to be illiterate
and not schooled…Poor people are particularly vulnerable to adverse events outside their
control. They are often treated badly by institutions of the state and society and excluded from
voice and power in those institutions.” (IBRD, 2000-2001: 15.) Using income as a measure of
poverty, the World Development Report (2000-01: 3) refers to the “deep poverty amid plenty” in
the world and states that a fifth of the world’s people live on less than $ 1 a day, and 44% of
them are in South Asia.

Lack of access to resources or assets is a unifying characteristic of poverty in all its

manifestations. The poor lack ownership of or access to assets such as land, water, forest,
dwelling units, credit, literacy, longevity, voice and capital-both physical and social. Those who
are severely below the poverty line are largely involved in subsistence type activities for which
they get exploitatively poor returns despite suffering extreme physical hardship and undertaking
grave risks so as to earn a meager income. Since earnings are below even the margins of
existence, expenditure and survival needs exceed income. This often results in the need to
borrow small amounts of money at usurious interest rates of as much as 120% per annum
(Mehta, 1996b: WS 82 ) When borrowing is not possible, hunger is suffered. Their inability to
change the power relationships results in scarcely available common resources (such as even
drinking water) or public funds meant for poverty alleviation being misappropriated and diverted
through manipulation by the locally powerful or corrupt. Since there are no mechanisms for
grievance redressed this could result in social tension, despair or a combination thereof.

The well-being of its people has been the prime concern of the Government of India since 1947.
A number of policies have been formulated to help those sections of the population who have
been left behind in the overall growth process to catch up with the rest of the people. However,
till the mid-1970s, the approach had essentially been that the growth process will take care of
reducing poverty. But this did not happen significantly. Therefore, the late 1970s and early 1980s
witnessed a sea change in the strategy for poverty alleviation. The government decided to attack
poverty directly rather than depend on general growth alone. This gave birth to the concept of
“growth with redistribution”—the use of special schemes for the direct generation of income for
the poor along with the promotion of general growth—to achieve a faster reduction in poverty.
Keeping the objective of eradicating poverty in mind as well as the goal of promoting the general
welfare, the Statistical Organization of India, since its inception in 1950, led by the National
Sample Survey Organization (NSSO), has kept up the work of collecting various kinds of
statistical information for the use of policymakers, program implementers, and other people
involved in the eradication of poverty and the improvement of general welfare in the country.
 Poverty in India

Poverty in India is still rampant despite an impressive economic growth. An estimated 250
million people are below the poverty line and approximately 75 per cent of them are in the rural
areas.

In general, poverty can be defined as a situation when people are unable to satisfy the basic
needs of life. The definition and methods of measuring poverty differs from country to country.
According to the definition by Planning Commission of India, poverty line is drawn with an
intake of 2400 calories in rural areas and 2100 calories in urban areas. If a person is unable to get
that much minimum level of calories, then he/she is considered as being below poverty line.

Causes of Poverty in India

• High level of dependence on primitive methods of agriculture

• High population growth rate
• High Illiteracy (about 35% of adult population)
• Regional inequalities
• Protectionist policies pursued till 1991 that prevented high foreign investment

During the period between 1973-74 and 1999-2000, the incidence of poverty expressed as a
percentage of people below the poverty line declined continuously from 54.9 per cent to
supposedly 26 per cent. (See table 1). However, the pace of reduction in poverty varied
considerably during this period with a large decline in the percentage of the population in
poverty throughout the 1980s, a slowdown in the pace of poverty reduction in the early 1990s,
and a reported but contested sharp 10% decline in poverty in the second half of the 1990s. No
such secular decline occurred in the numbers of those in poverty. The number of people below
the poverty line increased by 8 million during the 1970s, decreased by 21.8 million during the
1980s, increased by 13 million during the early 1990s and reportedly decreased by a massive 60
million during the mid to late 1990s.

Source: Planning Commission

Government has introduced a number of antipoverty programs since independence to alleviate
poverty. These include various employment guarantee Programs such as National Rural
Employment Program, Rural Landless Employment Guarantee Program etc. Recently,
Government has initiated National Rural Employment Guarantee Program (NREGP). As per
NREGP, the government will provide 100 days of employment per year to whosoever is willing
to work. NREGP is considered as a landmark program in poverty alleviation measures.

One of the major problems with poverty alleviation programs is their implementation. Rajiv
Gandhi once said that out of 100 paisa allocated for poor only 14 paisa reaches them. But in spite
of their weaknesses, poverty alleviated program can be credited for their success in alleviating
poverty to an extent. Greater public-private partnership and committed and efficient bureaucratic
machinery is required to tackle poverty.

Different people think about poverty in different ways. Some people think that poverty is about
being able to buy and sell but other people think about getting a fair share of education and
health care or about being given respect, and having some influence over what happens in their
life. Because of these differences it is useful to think about two main types of poverty - income
poverty and non-income poverty

Income poverty happens when a household takes in less than one US dollar per day. This means
that people will not have enough food or medicine and they will have poor clothes and houses.
Income poverty is due to people not having access to money or other assets. If people do not
have any other assets like land to grow their own food, then income poverty can result in stunted
growth and early death.

The best way to reduce income poverty is to encourage and support the development of effective
businesses (small, medium and large) which make good use of our natural resources and talents
to create wealth and jobs
Non income poverty happens when people may have a little bit of money but otherwise the
quality of their life is not good. They do not have access to affordable social and physical
services (schooling, health care, medicines, safe water, good sanitation, good transport) and they
may not feel safe in their homes either because they cannot trust the authorities or because they
belong to some particularly vulnerable group

The best way to reduce non-income poverty it to make sure that people have access to affordable
and good quality social services and infrastructure, that they feel secure in their homes, that they
trust the authorities and, if they are vulnerable, that there are safety net Programs to protect them
Poverty in India: Current Situation

Poverty is one of the main issues, attracting the attention of sociologists and economists. It
indicates a condition in which a person fails to maintain a living standard adequate for a
comfortable lifestyle. Though India boasts of a high economic growth, it is shameful that there is
still large scale poverty in India. Poverty in India can be defined as a situation when a certain
section of people are unable to fulfill their basic needs. India has the world's largest number of
poor people living in a single country. Out of its total population of more than 1 billion, 350 to
400 million people are living below the poverty line. Nearly 75% of the poor people are in rural
areas, most of them are daily wagers, landless laborers and self employed house holders. There
are a number of reasons for poverty in India. Poverty in India can be classified into two
categories namely rural poverty and urban poverty.

Reasons for Rural Poverty

some of the basic reasons of rural poverty in India are:

• Unequal distribution of income.

• High population growth.
• Illiteracy.
• Large families.
• Caste system.
Problems of Rural Poverty

• Presence of malnutrition, illiteracy, diseases and long term health problems.

• Unhygienic living conditions, lack of proper housing, high infant mortality rate, injustice
to women and social ill-treatment of certain sections of society.

Steps Taken by Government to Reduce Rural Poverty

The government of India has been trying its best to remove poverty. Some of the measures which
the government has taken to remove rural poverty are:

• Small farmer’s development Program.

• Drought area development Program.
• Minimum needs Program.
• National rural employment Program.
• Assurance on employment.
• Causes for Urban Poverty.

Causes for Urban Poverty

the causes of urban poverty in India are:

• Improper training
• Slow job growth.
• Failure of PDS system

Problems of Urban Poverty

• Restricted access to employment opportunities and income.

• Lack of proper housing facilities
• Unhygienic environments
• No social security schemes
• Lack of opportunity to quality health and educational services.

The steps taken by government to remove urban poverty are:

 • Nehru Rozgar Yojana.
• Prime Minister Rozgar Yojana.
• Urban Basic services for the poor Program.
• National social Assistance Program.

But these processes can be helpful only if the policies go to those people for whom it is meant.
The clash between the central government and the state government often results in the lack of
implementation of these policies. So it is very important that the governments do not play power
politics when it comes to a serious issue such as poverty.

Year All India % Rural % Urban%

1973 54.9 56.4 49.0

1978 51.3 53.1 45.2

1983 44.5 45.7 40.8

1988 38.9 39.1 38.2

1994 36.0 37.3 32.4

1999 26.1 27.1 23.6

Poverty in the States

Where are India's poor spatially located? This section attempts to identify the states in which

1. The largest percentage of India’s poor is located in 1999-2000.

2. that had a large percentage of their own population in poverty in 1993-94.11
3. that had a relatively poorer record of reducing the percentage of their population in
poverty between 1973-74 and 1993-94.

In which states are most of India’s poor concentrated?

Almost half of India’s poor and one third of India's population are concentrated in the three
states of Uttar Pradesh (including Uttaranchal), Bihar (including Jharkhand) and Madhya
Pradesh (including Chhattisgarh). The exact estimates are 48% of India's poor and 35.6% of
India's population are in these three states. (See table 3). Three states - Maharashtra, West Bengal
and Orissa - account for another 22.5% of those in poverty.

71.65% of India’s poor and half of the population are therefore located in six states.
Further, while the share of the poor exceeds the share of the population in all these states except
Maharashtra, in the case of Bihar, Madhya Pradesh and Orissa their relative share of those in
poverty is substantially larger than their share of India's population. No major reduction in
poverty in India is possible unless interventions for poverty alleviation are intensified in these
states. Future CPRC research will focus on the constraints on improved anti poverty
interventions in some of these states. Table 3: Percent of India's poor and of population in 6 high
poverty states

Source: Calculated based on Government of India, Poverty Estimates for 1999-2000, Press
Information Bureau, 22nd February, 2001 and Government of India, 2001Provisional Population
Tables.

Which states have a large percentage of their population in poverty?

In 1993-94, 37.2% of persons living in rural areas and 32.2% of persons in urban areas were
below the poverty line. The percentage of population of a state that was in poverty or the poverty
ratio was above the all-India average for rural areas in seven states – Bihar, Orissa, Uttar
Pradesh, Madhya Pradesh, Maharashtra, Assam and West Bengal. Urban poverty was also above
the all India average for the first five of these states as also for Karnataka, Tamil Nadu and
Andhra Pradesh.

Changes in the Incidence of Poverty in India’s States: 1973-74 to 1993-94

The track record of different states of India in decreasing the proportion of their population that
is in poverty has varied considerably as can be seen from tables 4 and 5.

On the one hand, three states experienced a substantial reduction in the percentage of 12 their
population that was in poverty over the entire twenty-year period from 1973-74 to 1993-94 -
Kerala, Andhra Pradesh and Punjab. The numbers of those below the poverty line declined by
58% in Punjab, 57% in Kerala and 55% in Andhra between 1973-74 and 1993-94. In addition,
the states of Gujarat, West Bengal and Rajasthan were also able to accomplish a substantial
reduction in the incidence of poverty - by 50%, 44% and 41% respectively as did Karnataka
(39%) and Tamil Nadu (36%).
The substantial reduction in poverty in West Bengal could be attributed to institutional reforms
brought about by the Left Front government. They include “land reform (in particular, Operation
Barga), effective political decentralization through the Panchayati Raj, implementation of
poverty alleviation programmers’ through the panchayats, and political mobilization of the rural
poor through kisan sabhas and political parties”(Tendulkar and Jain, 1996) and rapid agricultural
growth because of notable increases in area under irrigation through substantial private
investment in pump sets and tube wells (Bhalla and Singh, 1997). However, despite the
substantial decrease in the incidence of poverty in West Bengal, the state still gets included
among the seven states that have a large proportion of their population in poverty listed in table
5. Table 3 identifies six states in which more than 71% of India’s poor are concentrated.
These six states had 35% to 55% of their population in poverty even in 1993-94 (see table 5
below). The worst poverty scenarios occurred in Bihar, which had more than half its population
in poverty (55%) in 1993-94 and Orissa, with (49%). Bihar was able to reduce the percentage of
its population in poverty by a marginal 11% over the 20 years. Assam (as is the case for several
states in the North East) gets added to the group of 6 high share- of- India's- poor states listed
above since 41% of its population is in poverty. Clearly Bihar, Orissa, Madhya Pradesh, Assam
and Uttar Pradesh have suffered long duration poverty or chronic poverty since more than 40%
of the population of these has been in poverty for over 20 years.13
 CONCLUSION

Alleviation of poverty remains a major challenge before the nation. There may be disputes over
the average level or the extent of reduction in the average level of poverty. But there is no
denying that poverty has come down over the last three decades. There has been a steady decline
in the poverty ratio, i.e., the number of poor expressed as a percentage of the total population.
But, this decline until 1993-1994 was not adequate enough to effect a reduction in the number of
poor due to increase in the population. The reduction has taken place between 1993-1994 and
1999-2000 when the number of poor declined by 60 million. Also, the efforts of the government
have not made uniform impact across the regions. There are still some pockets in the country that
need more attention and greater focus for the alleviation of poverty. The strategy needs to be
complimented with a focus on provision of basic services for improving the quality of life of the
people.

Alongside the average level of poverty, some of the important socioeconomic indicators such as
literacy, education, and health have shown considerable improvement. As a result of the efforts
intensified under the National Literacy Mission, the literacy rate has shown a much sharper
increase during the 1990s compared to earlier decades. The health indicators have shown
improvement, but India still lags behind many developing countries. The progress in poverty
reduction and improvement in the socioeconomic indicators in India has been marked by
extreme regional inequalities. The performance in this regard varies widely across the states and
evidences suggest a variation of equal if not greater intensity between the regions within
particular states. Also, within a state, the performance level of the indicators of level of living
and quality of life measured in terms of the indicators of poverty and deprivation and socio-
economic indicators varies. There are some states that have performed well in reducing the
incidence of poverty but not so well in improving the quality of life in terms of education and
health.

There is a north-south divide in the performance of poverty reduction. The four southern states,
viz., Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu have performed well whereas the
performance is poor in some of the central (Uttar Pradesh, Madhya Pradesh) and eastern states
(Bihar and Orissa). Unfortunately, in the current century more than 40 percent of the population
of India will be residing in Uttar Pradesh, Madhya Pradesh, Bihar, and Orissa. The performance
of these states both in respect to poverty alleviation and socioeconomic development needs to be
decisively strengthened.
 References

1. Government of India, (2001), Poverty Estimates for 1999-2000, Press Release

2. Government of India, (2000) Economic Survey 1999-2000

3. The CERFE Research Program on Poverty

(http://www.gruppocerfe.org/English/convegni/ny/document.htm)
4. The CERFE Research Program on Poverty
(http://www.gruppocerfe.org/English/convegni/ny/document.htm)