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Measuring Urban Poverty

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. 1973-74, the urban population was 60 million. It increased to 64.6
million in 1977-78, 70.9m in 1983-84, 75.2m in 1987-88, 76.3m in 1993-94, and in 1999-
2000 it had risen to 77.2m. The growth rate of urban population is due to the large-scale
shifting of rural population to urban areas. This steep rate of growth of urban population
along with the urban bias in developing countries has brought in its wake problems like
population explosion in cities, slum formation and urban poverty. Urban poverty, which
has a serious impact on economic growth in India.

Tamilnadu is fourth most populated state in India. Tamil Nadu has performed well in
human development. With an index of 0.531, it ranked third in India, though considered
low as against western standards. This includes population, sex ratio, density of
population, per capita income, Below Poverty Line, Infant Mortality Rate, Literacy Rate,
and Women's Empowerment. The life expectancy at birth for males is 65.2 years and for
females it is 67.6 years. However, it has a number of challenges, significantly, the
poverty is high, especially in the rural areas. As of 2004-2005, the poverty line was set at
Rs. 351.86 / month for rural areas and Rs. 547.42 / month for urban areas. Poverty in the
state had dropped from 51.7% in 1983 to 21.1% in 2001. For the period 2004-2005, the
Trend in Incidence of Poverty in the state was 22.5% as against the national figure of
27.5%. Over one-half of these people live in slums or are homeless; they live in
tenements and huts, on pavements, along railway tracks, under bridges and in other
spaces available to them. The conditions of life under which the homeless and slum
dwellers of Chennai live are conditions of terrible poverty, squalor and deprivation.
Poverty is symptomatic of inadequate economic development.

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

The estimation of poverty in India is based on two critical components. First, information
on the consumption expenditures and its distribution across households is provided by the
NSS consumption expenditure surveys. Second, these expenditures by households are
evaluated with reference to a given poverty line. Households with consumption
expenditures below the poverty line are deemed poor.

Poverty in India can be defined as a situation only when a section of peoples are unable
to satisfy the basic needs of life. The definition and methods of measuring poverty differs
from country to country. The Planning Commission estimates the proportion and number
of poor separately for rural and urban India at the national and State levels based on the
recommendations of the Task Force on ‘Projections of Minimum Needs and Effective
Consumption Demands’ (1979). The Task Force had defined the poverty line (BPL) as
the cost of an all India average consumption basket at which calorie norms were met. The
norms were 2400 calories per capita per day for rural areas and 2100 calories for urban

5 49.1 193. 49. The poverty in India can be defined on the basis of rural poverty as well as urban poverty.2 38.1 15.3 264. The reasons behind urban poverty are as follows: 1) Improper Training 2) Growing population 3) Slower job Growth 4) Failure of PDS System Estimates of incidence of Poverty in India Year Poverty Ratio (Per cent) Number Of Poor (Millions) Rural Urban Combined Rural Urban Combined 1977-78 53.6 220. The recent experiences tell that the urban areas are facing the same problem of poverty as of the rural areas.2 51.9 1987-88 39.1 45.3 2007* 21. If the person is unable to get that minimum level of calories is considered as being below poverty line.9 322.4 36.0 70.3 170.6 26. Rural Poverty in India India is a more rural based country highly dependent on agricultural sector.09 and Rs. 56.1 19.4 328. These calorie norms have been expressed in monetary terms as Rs.0 76.7 40.3 32.5 252. Government's plans and procedures have failed in many times.1 23.9 1983 45.64 per capita per month for rural and urban areas respectively at 1973-74 prices.3 1999-00 27.1 1993-94 37.1 38.8 44.3 64.2 67.3 320.9 231.1 .2 307.areas.1 260. The important reasons for country's poverty are as follows: 1) Alarming population Growth 2) Lack of Investment 3) Lower Literacy Rate 4) Regional inequalities 5) Failure of PDS system Urban Poverty in India India is stepping forward for becoming a country with more urbanized.0 244. There is higher concentration of poverty in the rural India as to the given statistics.9 75.

2. make demands within political systems or get a fair response. which is not the same as the income level they need to avoid deprivation. environmental legislation and protection from violence. The urban poor population in India is estimated to be nearly 8 crores currently. India’s mega-cities have the highest percentage of slum-dwellers in the country. 5. drainage. between men and women and between adult men and children. emergency services. For urban poverty. caste. while the slum population is only 4 crores. it usually focuses on variations in the cost of food or variations in what the poorest 20 per cent of households spend on non-food items. schools. resources and services are monetized – and usually particularly expensive in larger or more prosperous cities. 3.* Poverty projections for 2007 Source: Tenth Five Year Plan. A poverty line should be set which reflects the income needed to avoid deprivation within each local context. etc. etc. Where there is provision for this. Limited asset base for individuals. as access to housing. even though the urban poor do not all live in slums. sanitation and garbage collection. households or communities (including both material assets such as housing and capital goods.) 4. and non-material assets such as social and family networks and ‘safety nets’). Inadequate household income (resulting in inadequate consumption of basic necessities).) . ethnicity. reflecting differences in the income needed to avoid poverty. The ‘non-food’ monetary costs of avoiding poverty are generally higher in urban areas than in rural areas. their slums will swell. sanitation. Exploitation and discrimination (often on the basis of gender. Planning Commission The biggest cities are growing faster than smaller towns. Inadequate protection by the law – for instance. sometimes exacerbated by an uneven distribution of consumption within households. and to afford health care and medicines when needed. 6. at the very least it should reflect the income needed not only to purchase sufficient food but also to obtain a secure shelter with adequate quality water. health care. age. Inadequate provision of ‘public’ infrastructure and services (piped water. Volume I. But very few nations have income-based poverty lines that vary from place to place. Establishing an appropriate poverty line to monitor changes in income poverty is also difficult. The multi-dimensional nature of poverty Urban poverty is usually characterised by: 1. This indicates that as big cities grow even larger. regarding civil and political rights. health and safety in the workplace. ‘Voicelessness’ and powerlessness within the political system – no possibility or right to receive entitlements. to pay for transport and for keeping children at school. While slums have become an important place to reach the urban poor.

in general. community centres and social services relating to health care. right from the time of their entry to the city they become a part of the informal sector as they have neither the skills nor the opportunities to enter better-paid and more secure formal sector jobs. Those . health. they live in polluted and degraded environments not suited to human habitation.” People in urban areas are homeless and slum households are deprived of good housing. The bulk of the urban poor are living in extremely deprived conditions with insufficient physical amenities like low-cost water supply. to another level of poverty.20 or $0. nutrition. For obvious reasons of convenience it developed two simple notions of poverty. for these people. access to affordable shelter and basic amenities.Urban poverty and problems Urban poverty was easily discernible through lack of security of land tenure. opportunities for skill development and employment. the lower poverty line was set at $1 a day per capita. Those below it were considered “the poorest of the poor”. their wages are less than the stipulated minimum wages. their income is meagre. At the same time there is a growing section of workers in the formal sector who have lost their jobs and are compelled to work in the informal sector. unregulated employment. A large section of this population consists of low-skilled rural migrants or migrants from smaller towns.Urban poverty was linked to the aspects of social inclusion. at their destination. education and social security. and the dollar being the reserve currency by design. drainage. development and management. responsiveness of local governance structures and policies and programmes impacting on urban environment. But purchasing power (dis)parities suggest that it could be more accurate to say that the poor in countries like India are living on less than $0. Global Poverty and India Global poverty estimates report the number of people living on less than $1 or $2 a day. The upper poverty line was set at $2 a day. sanitation. they do not have access to hygienic systems of waste disposal (including the sanitary disposal of faeces) and. city-wide infrastructure and basic service delivery systems. Workers in this sector get low wages or if they are self-employed. sewerage. particularly.which has to be applauded for having made the first such attempt – started making international comparisons of poverty only about two decades ago. This implies that their living conditions are low and. There are hardly any regulations on their working conditions and social security is virtually non-existent. they do not have access to clean water. pre-school and non-formal education “Workers engaged in the urban informal sector form the bulk of the urban poor. The US Treasury being the power behind the institution. For these people and their families this change means a reduction in their standard of living and insecure. Hence. if employed. They thus move from one level of poverty.40 a day The World Bank -. at their place of origin.

But the size of this small additional amount is usually unrealistically low in relation to the cost of non- food essentials. and also providing security. to building materials. especially for people living in areas where the costs of these are particularly high.15. The income needed to avoid poverty is usually particularly high in the larger and/or more prosperous cities. for example. Take. the case of infrastructure and services.08 and $2. such as the cost of housing. even schools and health care. to a place to defecate. Underestimates of the scale of urban poverty are particularly high when use is made of an income-based poverty line that makes no allowances for differences in living costs between countries – as in the World Bank’s US$1 per person per day poverty line. corrected for inflation. getting to and from work. but not as badly off. These are usually based on the cost of a ‘minimum food basket’. One of the key characteristics of cities is that access to virtually everything is highly monetized – access to land. to water. child care and. health care and keeping children at school. In many nations. The updated numbers today. often. Relying on income-based poverty lines (which assume that the income needed to avoid poverty is the same in all locations) to identify who is poor leads to large underestimates in the scale of urban poverty. . the provision of good quality water and sanitation can increase poorer groups’ incomes directly because households who previously paid 10-30 per cent of their income to water vendors or kiosks and pay- as-you use toilets now get better quality provision which also uses less income. Although it has become unfashionable for international agencies to support these. Good quality water and sanitation can also increase real incomes by greatly reducing the amount that was previously spent on health care and medicines as a result of water- related diseases and lost when income-earners were ill or had to nurse other ill family members. this also diverts attention from the many other ways in which poverty can be reduced. transport. water.living on $1-2 a day were still poor. Where there is little public provision for basic infrastructure and services. Reducing urban poverty without economic growth The almost exclusive focus by most governments and international agencies on defining and measuring poverty by income level leads to an assumption that economic growth is the only real means by which poverty will be reduced. Even leaving aside any reservations about the extent to which economic growth translates into increased real income for poorer groups (who are often in the weakest position to benefit from expanded economic opportunities). are $1. Housing schemes that really respond to the needs and priorities of low-income households can also reduce poverty – again reducing the health burden from infectious and parasitic diseases and accidents. governments set income-based poverty lines too low. with some small additional amount added in recognition that there are non-food essentials that have to be paid for. costs can be particularly high. a larger asset base and space for income-earning activities.

3. The need of the hour is to assist the urban poor by helping them to set up micro-enterprises thereby providing them avenues for enhancement or supplementation of their incomes. The bulk of the urban poor are living in extremely deprived conditions with insufficient physical amenities like low-cost water supply. national government agencies or local offices of international agencies. The Ministry of Tamil Nadu Urban Development is monitoring the implementation of three significant programmes related to urban poverty alleviation: 1. federations of community organisations. nutrition supplementation. 3. local NGOs. community centres. health care. (ii) the scheme of Urban Wage Employment and (iii) the scheme of Housing and shelter Upgradation 2. The goal is to adequately feed.000/. nutrition.can be further enhanced by an additional amount of Rs.But ‘poverty-reducing’ measures outside of economic growth depend on local institutions that can ‘deliver’ for the poor on one or more of the different aspects of poverty listed above.000/. on occasion. Social Welfare and Industry/ Industrial Training in Urban Slums with special focus on child and women survival and development through immunization.under the EWS scheme of HUDCO. sewerage.is provided under this scheme to entitled beneficiaries for Housing/Shelter upgradation. The form of local institutions that can do so varies a lot with context. local foundations. The Environmental Improvement of Urban Slums 1.The Yojana consisted of three schemes.at 7% rate of interest and a subsidy upto a ceiling of Rs. preschool and creche facilities and training for income generation in relation to social .000/. (B) The centrally sponsored programme of Urban Basic Services was introduced in 1986 with the assistance of UNICEF for provision of basic social services and physical amenities in urban slums. educate. sanitation. 1. drainage. 18. municipal authorities or even. house and employ the large and rapidly growing number of impoverished city dwellers. they can be community organisations. pre-school and nonformal education. The loan amount of Rs. Urban Poverty Alleviation Programmes Urban poverty alleviation is a challenging task before the nation which calls for imaginative new approaches.000/. Education. The programme aimed at convergence of social and physical services rendered by different specialist departments like Health. The Urban Basic Services for the Poor – (A) The Scheme of Housing and Shelter Up gradation seeks to provide assistance for housing and shelter upgradation to the economically weaker sections of the urban population as well as to provide opportunities for Wage Employment and upgradation of construction skills. A loan upto a limit of Rs. (i) the scheme of Urban Micro Enterprises. The Nehru Rozgar Yojana 2. Another major area of assistance to the urban poor is provision of funds for housing or shelter up gradation. The Nehru Rozgar Yogana . The Urban Basic Services for the Poor 3.

Environmental improvement of Urban Slums – The scheme aims at ameliorating the living conditions of urban slum dwellers and envisages provision of drinking water. . drainage and low cost sanitation in relation to physical services. community baths. street lighting and other community facilities. The .programme emphasized community based management through neighbourhood committees of the urban poor themselves. widening and paving of existing lanes. drainage.services and provision of basic physical facilities such as water supply. 3. community latrines.