CHRONIC POVERTY IN

INDIA

SUBMITTED TO:
Mr.C.M MUKHERJEE
Faculty, English

SUBMITTED BY:
VIKAS
GHRITLAHRE
Roll No. 168
Semester I, B.A., LL.B (Hons.)

SUBMITTED ON:
16th September, 2011.

Hidayatullah National Law

University Raipur, Chhattisgarh

ACKNOWLEDGEMENT
I feel highly elated to work on the topic CHRONIC POVERTY IN INDIA.
The practical realization of this project has obligated the assistance of many persons. I
express my deepest regard and gratitude for Mr.C.N MUKHERJEE , Faculty of English.
Her consistent supervision, constant inspiration and invaluable guidance have been of
immense help in understanding and carrying out the nuances of the project report.
I would like to thank my family and friends without whose support and encouragement,
this project would not have been a reality.
I take this opportunity to also thank the University and the Vice Chancellor for providing
extensive database resources in the Library and through Internet.

Vikas ghritlahre

Semester 1

TABLE OF CONTENTS
1.
ACKNOWLEDGEMENT
..
2.
INTRODUCTION
.
3. CAUSES OF CHRONIC POVERTY IN
INDIA
1. OVERPOPULATION
2. GLOBAL DISTRIBUTION OF RESOURCES

4. ANALYSIS CHRONIC POVERTY AND CHRONIC

POVERTY IN INDIA
5. WHO IS CHONICALLY
POOR
6. HOW DO CHRONICALLY POOR EXIT
POVERTY.
7. CHRONIC POVERTY IN URBAN
AREA
8.
CONCLUSION

9.
BIBLIOGRAPHY..............................................................
............................

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 schooledPoor 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 worlds people live on less than $ 1 a day, and 44% of
them are in South Asia.

Lack of access to resources or uselessness 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 scarce ly available common resources (such as even
drinking water) or public funds meant for poverty alleviation being there are no mechanisms for
grievance redress this could result in social tension, despair or a combination thereof.

CAUSES OF CHRONIC POVERTY IN INDIA

OVERPOPULATION

Overpopulation, the situation of having large numbers of people with too few resources and too
little space, is closely associated with poverty. It can result from high population density (the
ratio of people to land area, usually expressed as numbers of persons per square kilometer or
square mile) or from low amounts of resources, or from both. Excessively high population
densities put stress on available resources. Only a certain number of people can be supported on
a given area of land, and that number depends on how much food and other resources the land
can provide. In countries where people live primarily by means of simple farming, gardening,
herding, hunting, and gathering, even large areas of land can support only small numbers of
people because these labor-intensive subsistence activities produce only small amounts of food.
In developed countries such as the United States, Japan, and the countries of western
Europe, overpopulation generally is not considered a major cause of poverty. These countries
produce large quantities of food through mechanized farming, which depends on
commercial fertilizers, large-scale irrigation, and agricultural machinery. This form of production
provides enough food to support the high densities of people in metropolitan areas.
A countrys level of poverty can depend greatly on its mix of population density and agricultural
productivity. Bangladesh, for example, has one of the worlds highest population densities, with
1,078 persons per sq km (2,791 persons per sq mi). A large majority of the people of Bangladesh
engage in low-productivity manual farming, which contributes to the countrys extremely high
level of poverty. Some of the smaller countries in western Europe, such as The Netherlands and

Belgium, have high population densities as well. These countries practice mechanized farming
and are involved in high-tech industries, however, and therefore have high standards of living.
At the other end of the spectrum, many countries in sub-Saharan Africa have population densities
of less than 30 persons per sq km (80 persons per sq mi). Many people in these countries practice
manual subsistence farming; these countries also have infertile land and lack the economic
resources and technology to boost productivity. As a consequence, these nations are very poor.
The United States has both relatively low population density and high agricultural productivity;
it is one of the worlds wealthiest nations.
High birth rates contribute to overpopulation in many developing countries. Children are assets
to many poor families because they provide labor, usually for farming. Cultural norms in
traditionally rural societies commonly sanction the value of large families. Also, the governments
of developing countries often provide little or no support, financial or political, for family
planning (see Birth); even people who wish to keep their families small have difficulty doing so.
For all these reasons, developing countries tend to have high rates of population growth.
Most developed countries provide considerable political and financial support for family
planning. People tend to limit the number of children they have because of the availability of this
support. Cultural norms in these countries also tend to affirm the ideal of small family size.
Recently, however, some developed countries with declining population levels have begun
experimenting with incentives to increase the birth rate.

GLOBAL DISTRIBUTION OF RESOURCES

Many experts agree that the legacy of colonialism accounts for much of
the unequal distribution of resources in the world economy. In many
developing countries, the problems of poverty are massive and pervasive. In
recent decades most of these countries have tried to develop their
economies with industry and technology with varying levels of success.
Some nations have become fairly wealthy, including the Republic of
Indonesia, Malaysia, Singapore, South Korea, and Thailand. Many developing
countries, however, lack essential raw materials and the knowledge and
skills gained through formal education and training. They also often lack the
infrastructure provided by, for example, transportation systems and powergenerating facilities. Because these things are necessary for the
development of industry, developing countries generally must rely on trade
with developed countries for manufactured goods, but they cannot afford
much.

Some social scientists argue that wealthier developed countries continue to

practice a form of colonialism, known as neocolonialism. The affluence
of these countries is based to a large extent on favorable trade with the
developing world. Developed countries have been able to get inexpensive
natural resources from poorer countries in Asia, Africa, and Latin America,
including oil for power, ores and minerals for manufacturing durable goods,
and manufactured goods made by low-wage workers in factories operated
by multinational corporations. This practice contributes to the dependency of
poorer countries while not raising their standards of living.

ANALYSIS OF POVERTY AND CHRONIC POVERTY IN

INDIA
1. Trends and Incidence Of Income Poverty In India
The Planning Commission estimates the incidence of poverty in India on the basis of
household consumer expenditure surveys conducted by the National Sample Survey
Organisation. Six large sample consumer surveys have been conducted by the NSS on a
quinquennial basis since 1973-74. 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.
Table 1: Incidence of Poverty Percentage of Population and Number of
People Below the Poverty Line 1973-74 to 1999-2000

1973-74

54.9

1977-78

51.3

-3.6

328.9

-3.6

1987-88
1993-94

38.9

-5.6

307.1

-5.6

36

-2.9

320.3

-2.9

44.6

-6.8

322.9

-6.8

1983

321.3

Considerable progress was made in poverty reduction especially during the 1980s and
this is reflected in terms of.
1.a decrease in the numbers of people below the poverty line from a high of 328.9
Million in the 1970s to 307.1 million towards the end of the 1980s.
-2. a decrease in the percentage of population in poverty from 54.9% in the early
1970s to 39% during the second half of the 1980s.
3. an increase in the rate of poverty reduction from 3.6% in the late 1970s to around
6% in the 1980s.
The early 1990s saw a reversal in some of these gains as the numbers of those in poverty
Increased to 320 million and the pace of decrease in poverty incidence declined from
Around 6% to 2. 9%. Several researchers have attributed this to the effects of the financial
Crisis in 1991 and the liberalization measures that were adopted as part of the reforms
Package.

The poverty related estimates reported by the Planning Commission for 1999-2000Reflect a
substantial decrease in poverty in terms of both numbers (down to 260 million)and incidence
(down to 26.1%) due to a trebling of the pace of poverty reduction from2.9% in 1993-94 to 9.9%
in 1999-2000. If the controversial estimates reported by the Planning Commission on the basis of
the 1999-2000 survey are accepted, then it could beclaimed that a major dent has been made in
the incidence of poverty during the secondHalf of the 1990s as the incidence of poverty reached
an all time low of 26.1% ; thenumbers of those below the poverty line was at its lowest ever at
260 million; and the Decrease in the percentage of population in poverty between 1993-94 and
1999-2000 was Three times faster at 9.9% as compared with the 2.9% decline between 1987-88
and 1993-94. A leading financial newspaper reports that if the 55th round of the household
Consumer expenditure survey of the National Sample Survey Organisation is to be Believed,
there has been a 10% decline in the estimates of population below the poverty Line compared
with the 1993-94 all India figure of 36 percent. (Economic Times, 2001).
There is considerable skepticism about the accuracy of the estimates as the methodology adopted
by the NSSO for the latest large quinquennial sample (1999-2000) is underquestion. There has
been a change in methodology of data collection, (i.e., data pertainingto consumption
expenditure over the last seven and over the last 30 days was collectedfrom the same
households.) One report states that critics of the reforms view the latest estimates as "statistical
jugglery", in line with the trend of official agencies publishing data that suit the establishment
rather than the objective needs of society. (V.Sridhar,2001). Serious flaws in the methodology
adopted for t he latest survey have been alleged.

WHO IS CHRONICALLY POOR

There are many processes driving and maintaining chronic poverty. However, some
broad characteristics, which most will share some of, can be identified.
Casual labour: a great many of the chronically poor are not excluded from the economy, but
included on adverse terms. Insecure employment, low wages and poor working conditions trap
people in poverty. Casual labour is on the increase in India: 41% of all households reported
casual labour as their main income source in 1999-2000, and there are around132 million rural
casual laborers. Casuallabour is strongly associated with household poverty: many casual
laborers never emerge sustainably from poverty.
Persistently poor states: Uttar Pradesh, Bihar (and Jharkhand), Madhya Pradesh (and
Chhattisgarh), Orissa, Rajasthan and Assam are states having persistent and severe poverty and
the majority of Indias most deprived districts. The first three, in particular, have a substantially

higher share of Indias poor in relation to their share of the population overall. Adverse land
relations inherited from feudalism and the zamindari system, political instability and upper caste
domination of political power,1 poor green revolution performance and weak infrastructure have
all combined to reproduce this pattern.
Remote Rural Areas: Nevertheless, chronic poverty exists in every state in India, with pockets
in even relatively wealthy or low-poverty-rate states such as Maharashtra, Andhra Pradesh or
Tamil Nadu. Rural areas poorly connected to urban centres are associated with particular
problems. Remote forested areas often form such pockets of chronic poverty. Despite rich natural
resource bases, a combination of physical isolation and entitlements failures of access to these
resources, to information, to wider markets and public services and to anti-poverty programmedmaintain many tribal people in chronic poverty. Environmental degradation or climate change
may emerge as additional factors maintaining those poor households most dependent on natural
resources in chronic poverty.
Many dry land areas are sites of livelihood insecurity. Both commercialization of agriculture and
out-migration have helped households cope, and indeed contributed to growth and poverty
reduction. But there is a danger that pressure on water tables and recipient-area economies could
block these mechanisms and increase chronic poverty.
Social status can be a maintainer of chronic poverty and/or a driver. Despite progress in some
areas, members of Scheduled Tribes (ST) and Scheduled Castes (SC) remain disproportionately
poor. Evidence also suggests that ST face particular challenges (linked to remote rural area
problems) in escaping poverty. But social status factors affect others too, in particular, women.
Evidently not all women are poor, but discrimination expressed in many areas of life, from
labour markets to intra-household decision-making, makes many women especially vulnerable to
poverty and makes it harder for poor women to escape from poverty. Other social categories that
are often linked to poverty and discrimination include lifecycle categories old age or
childhood, and certain forms of illhealth,such as physical disability, HIV/AIDS, leprosy or
mental illness.
Household composition: Household size by itself does not appear to be statistically associated
with greater likelihood of chronic poverty. But chronically poor people do tend to live in
households with a greater number of dependents (e.g. children), or lesser access to the labour
market (e.g. with more women).
Multi-dimensional deprivation: chronic poverty is related to nutrition and food insecurity, illhealth (including environmental health) and lack of social well-being as well as income. There is
a higher incidence of chronic illnesses among the poor, who are particularly vulnerable to health
shocks. The various dimensions of poverty can become mutually reinforcing over time, e.g. illhealth often undermines income earning capacity, leading to under nutrition, inability to afford
access to healthcare, and further health deterioration

HOW DO CHRONICALLY POOR PEOPLE EXIT

POVERTY
Just as there are many drivers of chronic poverty, so other processes can interrupt chronic
poverty. People have found a variety of routes to avail themselves of economic opportunities and
exit poverty. Analysis of panel data on rural households highlights a few key themes:

Owning land: those poor households who have managed to retain some land are more likely to
exit poverty (in urban areas, other assets - perhaps housing security or education may be more
important
Migration is more often of member of a household rather than the whole household, to urban
areas forgetter employment opportunities, especially where prior information and contacts can
reduce costs and increase benefits.
Greater village level infrastructure and districturbanisation is associated with a higher rate of
household exits from poverty, through greater connection to economic opportunity especially
labour markets.

CHRONIC POVERTY IN URBAN AREA

URBAN POVERTY IN low- and middle-income nations is often described in terms of spatial
areas or types of housing (e.g. slums and squatter settlements) rather than by social group (e.g.
low-income individuals or households, the homeless). This has contributed to an assumption that
the urban poor have similar characteristics and face similar difficulties. A focus on chronic
poverty recognizes differences among the urban poor, and helps identify those who most need
effective poverty reduction programmers.
A concern for chronic poverty takes into account the length of time that an individual or
household experiences poverty, as well as the depth of their poverty. It differentiates between
those for whom poverty is transitory and those who are poor over a number of years. The
Chronic Poverty Research Centre considers poverty to be chronic if it lasts for five years, but

other time periods can be used. The period used may reflect data availability as in an analysis
of urban poverty in Ethiopia, which draws on three surveys (1994, 1995, 1997), and which
defines the chronically poor as those who were poor over this whole four-year period. This
analysis found that 57.4 per cent of urban households were poor for at least one of these years
and 21.5 per cent were poor in all three surveys. Much of the analysis of chronic poverty has
been based on the period without adequate income, but the concept can also be applied to
inadequate access to basic services such as water and education.
In most nations, the incidence of poverty (the proportion of people who are poor) is measured by
setting a poverty line and by assessing how many peoples incomes or consumption fall below
this. The poverty line is usually set at the income needed to purchase some approximation of
basic needs. A consideration of the length of time that individuals and households have
incomes below such a poverty line challenges us to recognize differences within the poor, not
only in terms of testability of their incomes or consumption but also in terms of power and social
class. Thus, an emphasis on chronic poverty seeks to bring to any generalized poverty analysis a
systematic understanding of how the incidences of poverty (or of deprivations that are part of
poverty) vary within the population and over time. Such an analysis can highlight the groups
whose incomes or food intake are most vulnerable to stresses or shocks.
Conceptually, adding this time dimension to poverty studies is easy to understand. But the
different ways in which poverty is defined and measured influence not only the figures for the
incidence of poverty but also trends in incidence over time. For instance, in China, official
statistics greatly underestimate the scale of urban poverty (and thus of chronic poverty) by
omitting low-income migrants from rural areas who live in cities but lack urban household
registration. In Egypt, estimates of the incidence of poverty vary depending on whether the
poverty line is based only on the cost of food, or also on non-food needs. The difference is
dramatic the proportion of the metropolitan Egyptian population below the poverty line in 2000
varied from 5.1 per cent to 31.3 per cent depending on which poverty line was used. Similarly,
two studies considering urban poverty in Ethiopia drew on the same data but adjusted differently
for regional price differences; one suggested an increase in poverty between 1995 and 1997,
while the other suggested a decrease. The use of single set of figures for setting poverty lines, or
of different prices for urban and rural areas, may not reflect the actual differences in prices
within a country, and so will produce misleading figures for the incidence of poverty and, where
data are available over time, of chronic poverty.
Although successive national surveys can show the proportion of households that suffer from
chronic poverty, insights into chronic poverty are more likely to come from studies that look at
specific groups within cities particular occupational groups (such as rickshaw pullers in Dhaka,
informal traders in Kinshasa), particular age groups (for instance, children) or those living in
particular settlements. Some studies focus on particular deprivations a study of informal
settlements in Aleppo, Syria, for instance, looked at how a lack of services and low state
investment, together with high densities, create difficult and unhealthy living environments and

significant health problems, with children especially facing greater risks. Other studies highlight
the multiple deprivations faced by residents of particular settlements; a study in two low-income
suburbs of Cape Town considered aspects such as wage labor and other income sources,
educational attainment, access to services, expenditure and food security, and health status.A
Jamaican study showed the multiple ways in which garrison communities are excluded from
benefits that other citizens secure. A study of two low-income settlements in Cairo showed how
many poor families are excluded from state social assistance programmed.
Our understanding of chronic poverty and what underpins it is hampered by the lack of official
data, and an understanding of chronic poverty often requires new information. For a more
differentiated understanding of poverty, a study in Dhaka considered the length of time rickshaw
pullers had worked in this trade. The Kingston, Jamaica, study (above) examined changes over
time in particular low-income settlements and in the whole city, not only for the incidence of
poverty but also for the provision for water, sanitation and electricity and the mean number of
days of illness (among other social and economic indicators).A consideration of such temporal
issues produces a more differentiated picture of deprivation, helping to expose the specific forces
associated with particular situations. As these studies and others have shown, the poor are highly
differentiated by such factors as age, gender, educational attainment and ethnicity, all important
correlates with different incidences and intensities of poverty. Also relevant in the urban context
is the spatial differentiation of the poor; different problems, for example, are associated with
inner-cities, urban peripheries and smaller towns.
Knowledge of such differentiation is important for effective poverty reduction strategies, the
benefits of which are often captured by those who are better off. Many programmes do little
tonsure they reach the poorest groups, including those who face chronic poverty. Reaching these
groups is essential for ensuring that the Millennium Development Goals are not achieved simply
by reaching those who are better off among the poor, leaving the poorest behind.

CONCLUSION
As our exploration has shown, monetary measures for assessing chronic
poverty, and especially flow measures, are inadequate both in conceptual
and practical terms. Their apparent precision masks the evidence that, at
best they are rough and partial surrogates; indeed they may be quite
imprecise due to measurement problems. Thus they are likely to give a false
understanding of the poverty dynamics of households and populations. An
asset- based approach offers a significant step forward, though still suffers
from a number of substantial limitations both conceptually and practically.
Needs and human development approaches identify the wider perspective
that is important, but are very difficult to put into practice. Consequently,
besides endorsing asset-based approaches as an interim solution, there is no

clear alternative that we can recommend. But the intellectual struggle to

develop alternatives must be prioritized.
1. Flow-based measures of poverty are unsuitable for assessing chronic
poverty, and researchers should focus on stock-based measures whenever
possible. Experimentation with innovative means of charting the dynamics
of assets and human capabilities is a research priority.
2. Where flow-based measures are used, much clearer cautions must be
made pointing out to the reader the high probability that poverty will appear
as more transient than it actually is because of fluctuations in such
measures, due to stochastic factors and measurement error. (Refer to Bobs
JDS paper on Pakistan as an example of such false precision?)
3. We argue that income and expenditure data remain important as part of
the overall picture of assessing poverty, but need to be used in different
ways and given much less primacy. For example, it may be more valuable to
look at income data more in terms of composition from different sources and
economic returns to different assets, rather than as the primary welfare
measure in its own right. Indeed, we would argue that the contemporary
emphasis on income over and above consumption in poverty analysis has
been a step too far.
4. The macro-level breakthrough that has been occasioned by the
widespread use of the HDI needs to be taken down to the micro-level. We
know that the HDI is imperfect, but it does have well-proven advantages
over GNP per capita for understanding welfare and deprivation. At the very
least, we need an active debate about the feasibility of establishing a
household level HDI to challenge the contemporary supremacy (and use and
abuse) of household income/expenditure/consumption measures.

BIBLIOGRAPHY