A

Seminar Report
On
Vicious circle of poverty
Submitted in partial fulfilment for the
Award of degree of
Master of Business Administration
(2018-2020)

Faculty of Commerce & Management Studies

Lachoo Memorial College of Science and Technology
(Autonomous)
Submitted to-
Dr. Vandana Gupta
Assistant Professor
Submitted by-
Neelu Chandak
 ACKNOWLEDGEMENT

I am greatly thankful to my presentation guide

Mrs. Dr. VANDANA GUPTA who inspired me
to present this presentation on “POVERTY” She
helped and encouraged me in every possible way
the knowledge required during the preparation of
the presentation. This would definitely help me in
my future ventures.
I would like to express my deep sense of gratitude
to Mrs. Dr. VANDANA GUPTA for giving me
his precious time and support.
I am greatly indebted to all of the helping factors
concerned with the successful completion of this
presentation. I am making this presentation not
only for marks but to also increase my knowledge.
Thanks again to my guide as well as to my
principal who gave us the golden opportunity to do
this wonderful presentation.
Poverty

Poverty can be defined as the lack of basic needs that are necessary for one to lead a
relatively comfortable life. Such requirements may include shelter, clothing, food, education,
and healthcare.

“According to Robert MC Namare, the former president of the World Bank, Poverty is
hunger, poverty is lack of shelter, poverty is being sick & not being able to see a doctor,
poverty is not having access to school & not knowing how to read, poverty is not having a
job, is fear for the future, living one day at a time.

Vicious circle of poverty

The people in the less developed countries have low per capita income having low per capita
income their rates of saving are low, when saving is less and investment will be low, low
investment leads to low productivity with low productivity level income is low as such
people remain poor.

In this way, vicious circle of poverty completes in this poor circle and they remain
economically undeveloped.
Poverty line

A level of personal or family income below which one is classified as poor according to
governmental standards called also poverty level

Poverty line is the line which indicates the level of purchasing power required
to Satisfied the minimum needs of person it represents the capacity to satisfied
the minimum level of human needs the line divides the people of a country into
group above poverty line & below poverty line. This differentiation is done on
the basic of the calorie’s intake of a person per day.

• Urban People = 2100 Calories per day

• Rural People = 2400 Calories per day

Cause of poverty
 Lack of education: Lack of education is one of the root causes of poverty.
Education is one which has enabled many people to overcome poverty. Hence you
can see almost all the nations in the world spend a lot on education. They provide
even scholarships to those from economically backward families. Because of
education, there was spread of scientific knowledge. Hence there was progress
regarding the production of automobiles, electronic gadgets which made huge profits
for the manufacturers. There was also rise in employment due to such growth in
economic benefits. So, on careful observation, one can notice that poverty countries
are those who lack sufficient education among their population.

 Lack of rural infrastructure: Infrastructure refers to the fundamental facilities

and systems serving a country, city, or other area,[1] including the services and
facilities necessary for its economy to function.[2] Infrastructure is composed of
public and private physical improvements such as roads, bridges, tunnels, water
supply, sewers, electrical grids, and telecommunications (including Internet
connectivity and broadband speeds). In general, it has also been defined as "the
physical components of interrelated systems providing commodities and services
essential to enable, sustain, or enhance societal.
  Natural calamities: Environmental and geographical factors may also cause
poverty. Floods, earthquakes, and droughts can cause devastations and economic
hardships as well as poverty. People may lose their businesses, sources of income,
and houses as a result of natural disasters. Change in weather patterns and soil
degradation can sometimes lead to poor agricultural harvests. If the community
depends on farming for income, it will be left without a viable way to generate
money. Natural calamities like flood, earthquake, volcanic eruption, typhoons,
tornado, and cyclone etc, cause serious damages to humanity. During cultivating
season, due to the absence of rain, drought occurs which causes heavy loss to
agriculture this increases poverty.

 Unemployment: Unemployment is essentially caused by a lack of paid work that

people are willing to, and are capable of taking. This is caused by two things,
demand for labour and pay. If the demand is filled, then there is no need to hire more
people. If the pay is too low, many people would rather be unemployed while they
focus on searching for a better job, and if the pay is high, employers will try to find
other ways to get the job done for a smaller cost. That usually means they turn to
automation of some kind, work their existing employees harder, and/or reduce
employee benefits in any way possible, for example by hiring more part-time
workers which they are not legally obligated to provide benefits for.

Suggestion of removal of poverty:

 Good education system: Our educational system generates thousands of

educated persons, who are unemployed and live in poverty because of their inability
to get suitable jobs. The high cost of education and insufficient scholarships are some
defects of the present educational system. Such defects create educated but
unemployed people in the society. People, who are illiterate, cannot get good
employment opportunities. As a result, they go for some small jobs, such as daily
wage labourers and other less paid jobs. Hence, illiteracy increases poverty and
poverty also compels persons to remain illiterate.

 Employment: Employment is a relationship between two parties, usually based on

a contract where work is paid for, where one party, which may be a corporation, for
profit, not-for-profit organization, co-operative or other entity is the employer and the
other is the employee. Employees work in return for payment, which may be in the
form of an hourly wage, by piecework or an annual salary, depending on the type of
work an employee does or which sector she or he is working in. Employees in some
fields or sectors may receive gratuities, bonus payment or stock options. In some
types of employment, employees may receive benefits in addition to payment.
Benefits can include health insurance, housing, disability insurance or use of a gym.
Employment is typically governed by employment laws, regulations or legal
contracts.

 Advance technology: Technology, which requires high training and capital-

intensive, complex infrastructure would not be appropriate for eradicating poverty as
most of the poor people are illiterate, especially in rural areas. A technology, which is
small and simple, capital-saving and labour-intensive is most appropriate, which can
help the poor people to meet their requirements.
  Awakening of woman: Gender inequality should be abolished if the society is to
realize meaningful growth and development. Denying women, the opportunity to
pursue financial success does the community no good. If anything, it compounds the
problems associated with poverty. Statistics has shown that regions with many
economically empowered women are more developed than those with glaring gender
disparities.

Types of poverty

Absolute Poverty:
Absolute poverty refers to not meeting basic survival needs such as food, clothing and
shelter. People living in absolute poverty often do not have access to clean water and a safe
living environment. Living in absolute poverty also means a lack of clothing and medicine. It
is the extreme kind of poverty involving the chronic lack of basic food, clean water, health
and housing. People in absolute poverty tend to struggle to live and experience a lot of child
deaths from preventable diseases like malaria, cholera and water-contamination related
diseases. This type is usually long-term in nature, and often handed to them by generations
before them. This kind of poverty is usually not common in the developed world.

Relative Poverty:
Relative poverty conditions lead to disadvantages through unemployment, low income, poor
health care coverage and lack of education This kind is usually in relation to other members
and families in the society. For example, a family can be considered poor if it cannot afford
vacations, or cannot buy presents for children at Christmas, or cannot send its young to the
university. Even though they have access to government support for food, water, medicine
and free housing, they are considered poor because the rest of the community have access to
superior services and amenities.
Poverty in India

Poverty is the scarcity or the lack of a certain (variant) amount of material possessions or
money. Poverty is a multifaceted concept, which may include social, economic, and political
elements. Absolute poverty, extreme poverty, or destitution refers to the complete lack of the
means necessary to meet basic personal needs such as food, clothing and shelter.

The threshold at which absolute poverty is defined is considered to be about the same,
independent of the person's permanent location or era. On the other hand, relative poverty
occurs when a person who lives in a given country does not enjoy a certain minimum level of
"living standards" as compared to the rest of the population of that country. Therefore, the
threshold at which relative poverty is defined varies from country to another, or from one
society to another.

Providing basic needs can be restricted by constraints on government's ability to deliver

services, such as corruption, tax avoidance, debt and loan conditionalities and by the brain
drain of health care and educational professionals. Strategies of increasing income to make
basic needs more affordable typically include welfare, economic freedoms and providing
financial services.

Poverty reduction is still a major issue (or a target) for many international organizations such
as the United Nations and the World Bank.

Some causes of poverty are, changing trends in a country’s economy, lack of education, high
divorce rate which causes feminization of poverty, having a culture of poverty,
overpopulation, epidemic diseases such as AIDS and malaria, and environmental problems
such as lack of rainfall and others.

In California reduced poverty in the elderly with the creation of the social security program.
Almost 50 percent of people in the world today live on less than $2.50 per day

The poverty rate among seniors in the United States is at 9 percent as of 2010. In 1960 the
official poverty rate among the elderly was 35 percent. The Netherlands offers a universal
pension and leads the world with a 1.7 percent poverty rate among the elderly. Extreme
poverty may affect the lifespan and the lack of money via some type of pension system
increases the poverty rate among the elderly worldwide. Issues like hunger, illness and thirst
are all causes and effects of poverty.

Extreme weather may be a cause of poverty in many countries. Drought, rainfall and flooding
are some of the biggest causes of poverty by weather. When natural disasters do not gain
media attention raising money becomes more difficult. This is made worse when
governments spend money in the capitals instead of the poorest areas which need it most.