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Poverty in India is a major issue. Rural Indians depend on unpredictable agriculture incomes, while urban Indians rely on jobs that are, at best, scarce. Since its independence, the issue of poverty within India has remained a prevalent concern. As of 2010, more than 37% of India’s population of 1.35 billion still lives below the poverty line. More than 22% of the entire rural population and 15% of the urban population of India exists in this difficult physical and financial predicament.
The division of resources, as well as wealth, is uneven in India - this disparity creates different poverty ratios for different states. For instance, states such as Delhi and Punjab have low poverty ratios. On the other hand, almost half the population in states like Bihar and Orissa live below the poverty line. A number of factors are responsible for poverty in the rural areas of India. Rural populations primarily depend on agriculture, which is highly dependant on rain patterns and the monsoon season. Inadequate rain and improper irrigation facilities can obviously cause low, or in some cases, zero production of crops Additionally, the Indian family unit is often large, which can amplify the effects of poverty. Also, the caste system still prevails in India, and this is a major reason for rural poverty people from the lower casts are often deprived of the most basic facilities and opportunities. The government has planned and implemented poverty eradication programs, but the benefits of these programs are yet to bear fruits.
" However. Dalits constitute the bulk of poor and unemployed.. Caste explanations of poverty fail to account for the urban/rural divide. and direct seizures. they created the Indian landless laborer. and continues to segregate Dalits. especially in the areas of textiles and metal-working. British era The Mughal era ended at about 1760. taxes. Michael. Others.The phenomenal increase in population in the cities is one of the main reasons for poverty in the urban areas of India. including changes in industrial policies. and other on-going initiatives. tariffs on manufactured or refined Indian goods. regulations.. M. The government has sought to increase the GDP through different processes. Shashi Tharoor. however. Other programs include the Integrated Rural Development Program. Jawaharlal Nehru claimed "A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today.the British killed the Indian artisan. This migration is mainly attributed to poor employment opportunities in villages. have noted the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits. ". through colonial privatizations. Jawahar Rozgar Yojana and the Training Rural Youth for Self Employment (TRYSEM). 65% of rural forward castes are below the poverty line. according to economist . casteism is widespread in rural areas. and has had some success with these programs. they exported our full employment and they invented our poverty. According to William A. Since 1970." The Indian economy was purposely and severely deindustrialized. There is a Public Distribution System. the Indian government has implemented a number of programs designed to eradicate poverty. Causes of poverty in India Caste system Further information: Caste system in India According to S.. Haviland. which has been effective to some extent. former UN Undersecretary-General and author wrote in The Great Indian Novel. Using the UN definition of poverty. A major portion of this additional population is due to the large scale migration of rural families from villages to cities.
where all aspects of the economy are controlled by the state and licenses were given to a select few. the average income in India was not much different from South Korea in 1947.5% from 1950s to 1980s.720. Taiwan by 8%. the average annual income in India was US$439. US$13.259.3%. The labyrinthine bureaucracy often led to absurd restrictions . how much. at what price and what sources of capital were used. Hindu rate of growth is an expression used to refer to the low annual growth rate of the economy of India. US$3. and US$936 for Taiwan. (numbers are in 1990 international Maddison dollars) In other words. and US$15. but South Korea became a developed country by 2000s. the numbers were US$1. while per capita income averaged 1. At the same time. such explanation ignores the role of changes in demand and technology.818. Corruption flourished under this system. By 1999. and South Korea by 9%. At the same time. —BBC India had started out in the 1950s with: • • • • • high growth rates openness to trade and investment a promotional state social expenditure awareness macro stability but ended the 1980s with: • • • • low growth rates (Hindu rate of growth) closure to trade and investment a license-obsessed. The term was coined by Indian economist Raj Kumar Krishna. Thailand by 7%. India was left as one of the world's poorer countries. compared with US$619 for China.up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced. India's economic policies In 1947. The License Raj was a result of India's decision to have a planned economy.317. which stagnated around 3.Angus Maddison. License Raj refers to the elaborate licenses. Indonesia by 6%. restrictive state (License Raj) inability to sustain social expenditures . Pakistan grew by 5%. US$770 for South Korea. regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990.
resulted in a very high portion of rural households getting into the debt cycle. Literacy rates have risen from 52 percent to 65 percent in the same period. Poverty has decreased significantly since reforms were started in the 1980s. one-third of them have emerged from poverty in the last ten years. hunger in India has reached its highest level in decades. according to Sainath. Cetron writes that an estimated 300 million Indians now belong to the middle class. when at the same time. High population growth rate. resulting in a very high number of farm suicides. While services and industry have grown at double digit figures. has resulted in an extraordinary . Commentators have faulted the policies pursued by the government which. Farmers are a large vote bank and use their votes to resist reallocation of land for higherincome industrial projects. Also: • • Over-reliance on agriculture. As professor Utsa Patnaik. in place of traditional food crops. although demographers generally agree that this is a symptom rather than cause of poverty. Marvin J. Neo-liberal policies and their effects Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway. He also points out that rural economies across India have collapsed. or on the verge of collapse due to the neo-liberal policies of the government of India since the 1990s. Analysts such as the founder of "Forecasting International". India currently adds 40 million people to its middle class every year. As journalist and the Rural Affairs editor for The Hindu. India’s top economist on agriculture. The human cost of the "liberalisation" has been very high. At the current rate of growth. the average poor family in 2007 has about 100 kg less food per year than it did in 1997. has pointed out. according to official statistics. with some saying the true number is much higher.• macro instability. Government policies encouraging farmers to switch to cash crops. Despite this. About 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%. P Sainath describes in his reports on the rural economy in India. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200. That number remains disputed.000. agriculture growth rate has dropped from 4. a majority of Indians will be middle-class by 2025.8% to 2%. There is a surplus of labour in agriculture. indeed crisis. the level of inequality has risen to extraordinary levels.
while only 4-7% of the Indian population hold any equity. the government spends less than 0. However. Efforts to alleviate poverty . and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.” from 26 per cent of farm households to 48. some government schemes such as the mid-day meal scheme. there are few jobs to be found. marginal or small farmers.increase in farm input costs. As of 2006. Executive Director at Morgan Stanley. it is pointed out that there has been a wealth increase of close to US$1 Trillion in the time frame of 2003-2007 in the Indian stock market. even if the price falls. Employment has collapsed. Non-farm employment has stagnated. India kept reducing investment in agriculture (standard neoliberal procedure). In one estimate. all along. Sainath points out that a disproportionately large number of affected farm suicides have occurred with cash crops. because with food crops such as rice. sub-marginal. During the time when Public investment in agriculture shrank to 2% of the GDP. there is food left to survive on. In a report by Chetan Ahya. Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times. Much has happened to make it a lot worse. the same time as India became the nation of second highest number of dollar billionaires. Nothing has happened in 15 years that has changed that situation for the better. Meanwhile.2% of GDP on agriculture and less than 3% of GDP on education. too. Public investment in agriculture shrank to nothing a long time ago. while market forces determined the price of the cash crop. over 85 per cent of rural households are either landless. Sainath argues that Farm incomes have collapsed. Hunger has grown very fast. He also points out that inequality has reached one of the highest rates India has ever seen. the nation suffered the worst agrarian crisis in decades. Life was being made more and more impossible for small farmers.) Millions move towards towns and cities where.6 per cent.
the . but the distribution of wealth is not at all even. Probably the most important initiative has been the supply of basic commodities. It is incorrect to say that all poverty reduction programmes have failed. India is adding 60 to 70 million people to its middle class every year. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India. Increasing stress on education. While there is a consensus that there has not been increase in poverty between 1993-94 and 2004-05. reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society. the extent of poverty reduction is often debated. After the liberalization process and moving away from the socialist model. available throughout the country as poor spend about 80 percent of their income on food. as a trickle-down effect of the growing middle class. it questioned the government of India's definition of poverty saying: The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is said to be declining rapidly. a majority of Indians will be middle-class by 2025. Outlook for poverty alleviation Eradication of poverty in India is generally only considered to be a long-term goal. are also expected to contribute to the alleviation of poverty. Cetron writes that an estimated 390 million Indians now belong to the middle class. particularly food at controlled prices. Literacy rates have risen from 52 percent to 65 percent during the initial decade of liberalization (1991-2001). govt has initiated. sustained. and refined various planning schemes to help the poor attain self sufficiency in food production. one-third of them have emerged from poverty in the last ten years. Poverty alleviation is expected to make better progress in the next 50 years than in the past. Analysts such as the founder of "Forecasting International". highlights the increasing disconnect between official poverty estimates and calorie deprivation.Since the early 1950s. While total overall poverty in India has declined. Marvin J. At the current rate of growth. In its report on global hunger index. Controversy over extent of poverty reduction The definition of poverty in India has been called into question by the UN World Food Programme.
they should not be dismissed outright." However.  A study by the McKinsey Global Institute found that in 1985.25 a day is expected to go down from 435 million or 51. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India.picture is not so clear if one considers other non-pecuniary dimensions (such as health. education. finding that the number of people living on US$1.5). have shown the clearest trends of globalization with the accelerated rise in per-capita income. by 2005 that proportion had been cut nearly in half. With the rapid economic growth that India is experiencing. In 1992. Nicholas Stern. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people. vice president of the World Bank. at 230 million. India. or about a dollar per person per day.3 percent in 1990 to 295 million or 23. to 54%.50 nominal.6 percent by 2015 and 268 million or 20.3 percent by 2020. living in abject poverty. He insisted that the 1999-2000 survey was well designed and supervised and felt that just because they did not appear to fit preconceived notions about poverty in India. or 836 million people. crime and access to infrastructure). together with China. a new report from the UN disputes this. and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18. India is positioned at 132ond place in the 2007-08 UN HDI index. lived on less than 20 rupees per day (USD 0. as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. making the issue of urban poverty more significant in the long run . it is likely that a significant fraction of the rural population will continue to migrate toward cities. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country. like journalist P Sainath. has published defenses of the poverty reduction statistics. They project that if India can achieve 7. hold the view that while absolute poverty may not have increased. USD 2. and is 94th of 119 in the world hunger index). It is the lowest rank for the country in over 10 years. India remains at a abysmal rank in the UN Human Development Index.3% annual growth over the next 20 years. with most working in "informal labour sector with no job or social security..0 in PPP). A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians. 465 million .000 rupees a year. the highest in the world) as of 2008. Some. 93% of the Indian population lived on a household income of less than 90. India was at 122ond place in the same index. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well.
rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005. and they project that it will drop to 26% by 2025. has not translated into superior nutritional status for the South Asian child. The World Bank." The World Bank also noted that "[w]hile poverty is often the underlying cause of malnutrition in children.more people will be lifted out of poverty. citing estimates made by the World Health Organization. Contrary to popular perceptions.  Persistence of malnutrition among children According to the New York Times.5% of the children in India suffer from malnutrition. is estimated that about 42." A special commission to the Indian Supreme court has noted that the child malnutrition rate in India is twice as great as sub-Saharan Africa  . the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa. Report concludes that India's economic reforms and the increased growth that has resulted have been the most successful anti-poverty programmes in the country. live in India. 34 per cent of the world's stunted children and 46 per cent of the world's wasted children. states "that about 49 per cent of the world's underweight children.
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