CHAPTER-2

CONCEPTUAL FRAMEWORK

OF POVERTY AND INEQUALITY

 CHAPTER-2
CONCEPTUAL FRAME WORK OF POVERTY
AND INEQUALITY

2.1 CONCEPTUAL FRAMEWORK OF POVERTY

Poverty as a public policy concern is now widely considered to be a
multidimensional problem at the global, national and community level. However,
these dimensions of poverty are more interrelated and complementary rather than
substitutes.
The concept of poverty has a very long and diverse history. Early studies on poverty
in the 20th century can be traced back to booth’s( 1892) pauperism and analysis of
town life in Row tree’s( 1901) work who initially defined poverty in terms of
“physical efficiency”—a physiological standard referring to a prescribed “basket of
goods”. Rowntree’s definition provides a framework for survey conducted by
Bowley.

Nevertheless by 1965, another philosopher, Townsend, contradicted Rowntree’s

definition and adopted a relative rather than an absolute standard of poverty
.Townsend and Smith (1965) argued that individuals, families and groups in the
population can be said to be in poverty when they lack the resources to obtain the
types of diets, participate in the activities and have the living conditions which are
customary or at least widely encouraged and approved in the societies to which they
belong.

In Harrington’s (1962) “the other American” and Galbraith’s (1958) “the affluent
society”, much was said to arouse the attention of the public, the politicians, and
especially academicians about the importance of poverty to economic development.
The 1964 report of the council of economic advisers set out a poverty line at $3000,
drawing heavily on the research of Orshansky (1965), with more emphasis on the
level of disposable income, which was reflected in macroeconomic indicators like
Gross National Product (GNP) per capita and with an emphasis on precipitate
income growth.

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In the 1970’s political debate especially within the World Bank and acadmic
research in major universities, helped reshape the whole concept of poverty. Further
emphasis on relative deprivation, inspired in the UK by Runciman, helped redefine
Poverty as not just a failure to meet minimum nutrition or subsistence, but rather as
a failure to keep up with the standards prevalent in a given society. Another
important shift at this time was a broadening of the concept of income poverty to a
wider set of basic needs, including those provided within the socio-economic
environment. Following the international labor organizations (ILO) pioneering work
in the mid 1970’s poverty came to be defined not just as lack of income but also as a
lack of access to health, education and basic social services deemed necessary for
survival.

The 1980’s saw new layers of complexities added to the concept of poverty.
Principle innovations included:
1) The incorporation of non-monetary aspects, particularly as a result to Robert
Chamber’s work on powerlessness and isolation. This helped to inspire
greater attention to participation.
2) A r9enewed interest in vulnerability and its counterpart, security, associated
with better understanding of reasonability and of the impact of shocks
notably drought. These points to the importance of assets as buffers and
social relations (The moral economy, social capital etc.) It also let to new
work on coping strategies.
3) A broadening of the concept of poverty to a wider construct livelihood, the
Bruntland commission on sustainability and the envioumment which
popularized the term “sustainable livelihood” adopted this line to thought.
4) Theoretical work by Amrtya Sen (1985, 1987) emphasized that income was
only value able in so far as it increased the capabilities of individual and
there by permitted functioning in society.
5) A growing interest in the study of gender and its relevance to poverty.
Besides this, the debate moved from a focus on women alone (women in
development-WID) to wider gender relative (Gender and development-
GAD) policies followed to ascertain women empowerment.

9
On the other hand, the 1990’s saw further development in the concept of poverty in
terms of well being and failure of social entitlements. The idea of well being came to
act as a metaphor for the absence of poverty with concomitant emphasis on how
poor people themselves view their own situation. This has been termed as the
participatory paradigm. At the same time, inspired by Sen, United Nations (UNDP)
developed the concept of human poverty within the sphere of human development
and defined poverty as the denial of opportunities and choices and the objective of
human development is to lead a long, healthy and creative life and to enjoy a decent
standard of living, freedom, dignity, self-esteem and the respect for others (UNDP,
Human Development Report 1997). This opened up a development approach to
qualitative and quantitative measurements regarding the incidence and depth of
human condition of the poor5.

2.1.1 ALTERNATIVE DEFINATIONS OF POVERTY:

There is no shortage of approaches to the conceptualization and definitions of
poverty. Some of the most eminent social scientists have been trying to define
poverty for more than 200 years and the most influential approaches are:

Adam Smith (1776):

By necessaries, I understand not only the commodities which are indispensable
necessary for the support of life but whenever the custom renders it indecent for
creditable people, even of the lowest order to be without. A linen shirt for example
is strictly speaking not a necessity of life. But in the present time-a creditable day,
laborers would be ashamed to appear in public without a linen shirt, the want of
which would be supposed to denote that disgraceful state of poverty

Seeboham Rowntree (1899):

A family is counted as poor if their total earnings are insufficient to obtain the
minimum necessities of merely physical efficiency

5 Mabughi, Ngiwal and Selim, Tarek (2006), “Poverty as social Deprivation: A Survey”, Review of
Social Economy, Vol. LXIV, No.2 June 2006.

10
William Bveridge (1942):
In considering the minimum income needed by person of working age for
subsistence during interruption of earnings, It is sufficient to take into account food,
clothing, fuel, light and household sundries, and rent, though some margin must be
allowed for inefficiency in spending.

Ronald Henderson (1975):

Insofar as poverty is defined by references to a minimum acceptable standard of
living, it is a relative concept. It requires a value judgement that must reflect the
productivity of the economy and community attitudes. The task of determining a
minimum standard of living is difficult given the variety of life styles and values in
society and the range of matters such as food, shelter, clothing, health and education
that must be considered.

Peter Townsend (1979):

Individual’s families and groups in the population can be said to be in poverty when
they lack the resources to obtain the types of diet, participate in the activities and
have the living conditions and amenities which are customary, or at least widely
encouraged or approved in the societies to which they belong.

JaannaMack and Steward Lansley (1985):

Poverty is an enforced lack of socially perceived necessities

Amartya Sen (1992):

Poverty is the failure of basic capabilities to reach certain minimally acceptable
levels. The functioning relevant to this can vary from such elementary physical ones
as being well-nourished, being adequately clothed and sheltered, avoiding
preventable morbidity etc to more complex social achievements such as taking part
in the life of the community being able to appear in public without shame and so

6 Peter (2004), “Poverty framework: From Income Poverty to Deprivation Towards a Credible”,
International Journal of Learning in Social Contexts, No. 2, Dec.

11
According to Webster’s Encyclopedia abridged Dictionary of the English language,
the word poverty means ‘a state or condition of having little or no money, good or
means of support, condition of being poor, indigence . Its synonyms are penury,
destitution, need and want. These words imply a state of deprivation and lack of the
means for a proper existence.

According to Concise Oxford Dictionary, the adjective poor means “lacking

adequate money or means to live comfortably” The term poverty is defined as the
state of being poor and as “want of the necessities of life”. As in Spanish and
Arabian, the word gives the sense of lacking those things that are necessary.

Therefore, it can be inferred that poverty is clearly multidimensional in nature. It

encompasses not only material deprivation in terms of income or consumption levels
arising from illiteracy, malnutrition, bad health, poor access to water and sanitation,
but also vulnerability to economic shocks and lack of political freedom. Material
deprivations are clearly linked in many cases to these other types of deprivation;
however, these are not all-encompassing. In other words deprivations in terms of
some minimally adequate income or consumption do not always move together with
other deprivation. As a result there are different conceptualizations and approaches
of poverty.

2.1.2 DIFFERENT APPROACHES OF POVERTY

Monetary Approach: Monetary approach of the identification and measurement of

poverty is the most commonly used. The approach was pioneered by the seminal
work by Booth Rowntree, who studied poverty in London and York, respectively, in
the 19th and early 20th centuries.

It identifies poverty with a shortfall in consumption (or income) from some poverty
line. The valuation of the different components of income or consumption is done at
market prices, which requires identification of the relevant market and the
imputation of monetary values for those items that are not valued through the market
(such as subsistence production and in principle, public goods)

12
The Capability Approach: was pioneered by Sen, according to this approach
development should be seen as the expansion of human capability, not the
maximization of utility, or its proxy, money income. The capability approach rejects
monetary income as its measure of well being and instead focuses on indicators of
the freedom to live a valued life. In this framework, poverty is defined as
deprivation in the space of capabilities where ‘basic capabilities’ are ‘the ability to
satisfy certain crucially important functioning up to certain minimally adequate
levels.

In the capability approach well being is seen as the freedom of individuals to live
lives that are valued (termed the capability of the individual), i.e., the realization of
human potential. This emphasis on the “outcomes” characterizing the quality of life
of individuals implies a shift away from monetary indicators (which at best can
represent indirect measure of those outcomes) and a focus on non monetary
indicators for evaluating well being or deprivation. The emphasis therefore is put on
the idea of adequacy of monetary and other resources for the achievement of certain
capabilities rather than their sufficiency and the role of externalities and social goods
are brought into the picture as other influences over capabilities.

Social Exclusion Approach: The concept of social exclusion was developed in

industrialized countries to describe the process of marginalization and deprivation
that can arise even within rich countries with comprehensive welfare provision. The
concept has been gradually extended to developing countries through the activities
of various UN agencies (especially the international labour institute) and the social
summit.

Social exclusion refers to the phenomenon where by individuals or groups are

unable to participate fully in society. The types of exclusion can be many. Certain
groups, such as women or other people belonging to particular socio-ethnic groups
may be excluded from the labour market and education while still others may be
excluded from participation in the political process. Since excluded individuals or

13
groups might not to be deprived materially, this concept is much broader than that of
material poverty.
Participatory Approach (Pioneered by Chambers): This approach aims to get
people themselves to participate in decisions about what it means to be poor and the
magnitude of poverty. The practice of participatory poverty assessment (PPA) has
evolved from PRA (participatory rural appraisal), it is defined as ‘a growing family
of approaches and methods to enable local people to share , enhance and analyze
n
their knowledge of life and conditions to plan and to act.

Livelihood Approach: The livelihood approach also accepts the multidimensional

nature of human deprivation as it is based on the recognition that poor households
typically use a range of strategies to deal with their situations. Understanding these
diverse strategies is essential for effective design and implementation of poverty
reduction policies. Among other things, the livelihood approach has been useful in
sensitizing poverty analysts and policy makers to the concept of vulnerability and
the related notion of risk in so far as deprivation is concerned. For instance the
perception of risk can induce the poor to remain engaged in subsistence activities at
the expense of market oriented activities, even if these activities after higher average
returns but are regarded as having greater volatility7
8.

Thus poverty requires meticulous definition, identification of constituent parameters

and verifiable and measurable indicators.

2.1.3 POVERTY IN DIFFERENT PERSPECTIVES

Social Scientists have looked at poverty from three broad perspectives viz. absolute,
relative and subjective poverty.

Absolute Poverty:
This refers to subsistence poverty, based on assessment of minimum subsistence
requirements, involving a judgement on basic human needs and measured in terms
of resources required to maintain health and physical efficiency. The resources in

7Ruggeri, Caterina, et.al.(2003), “Does it Matter that we do not Agree on the Definition of Poverty?
A Comparision of four approaches”, Oxford Development Studies, Vol 31, No. 3, Sep.
8 “Poverty in Asia -Measurement, Estimation and Prospects”,
www.adb.org/documents/books/key..../special-chapter-2004.pdf.

14
question include quality and quantity of food clothing and shelter, all perceived as
necessary for a healthy life. These basic life necessities are then priced and the total
figure or price constitutes the poverty line. Those with income below the poverty
line are the poor. Poverty begins below and ends above the poverty line in question.

Operationalization and measurement of absolute poverty has been based on

“Focusing on such basic needs as:

•Nutrition: Indicated mainly by caloric and protein intake.

•Shelter: Reflected by the quality dwelling and absence or presence as well as the
degree of overcrowding.

•Health: As reflected, for example, by the health status of the population, which
includes the overall physical, mental and the social wellbeing of the individuals in
the population as well as other trends indicated by infant mortality rates, access to
and quality of available medical facilities.
The basic human needs have also been broadened beyond physical survival to
include “basic social and cultural needs” such as the need for education, security,
leisure and recreation.

•Education: As indicated by the proportion of the population enrolled in schools.

•Security: the numbers of violent deaths, relative to the population size and also
cases and types of theft, mugging, rape etc., have been taken to reflect the socio­
cultural and security status of the resident populations.

•Leisure: The amount of leisure time, relative to work time has been considered as a
good indicator of life consolations away from propensities towards socio-economic
inadequacies.

Critique: The concept of absolute poverty has been widely criticized especially
against its assumption of universal applicability. It assumes, for example, that there

15
are minimum basic needs uniformly applicable to all levels of social and economic
categories.
It is however, recognized that there are variations of diets , shelter, security, leisure
and recreation , depending on the diversity of cultures and modes of production , as
well as the degree of socio-cultural change towards modernity and globalization .
African pastoral societies , for example , look at their basic necessities through
adequacies in livestock members, unlike the urban dwellers among whom TVs ,
videos , radios , good housing , leisure , security , education , etc, would count as
basics . The concept of adequate provisioning is also increasingly changing
according to needs of specific population categories, e.g. Youth, women, aged. The
changing needs patterns also vary from one society and culture to another.

Relative Poverty: This refers to the use of relative standards in both time and place
in the assessment of poverty, viewed as an improvement over the concept of
absolute standard. In application, relative poverty is based on judgments of members
of particular societies, regarding what they see as reasonably acceptable standards of
living and styles of livelihood.
The notion of relative poverty is thus elastic and receptive to conventional and rapid
changes. Thus in some cases, people might be viewed as relatively poor because
they lack running water, modem medical facilities, higher educational institutions
such as universities, tourist and holiday facilities and cars for personal use.

Critique: Acceptable standards are in themselves problematic between inter-

societal, ethnic, religious and other social groups. Relatively acceptable standards of
life style of the slum dwellers are not acceptable to higher residential class area
resident. To engage in meaningful comparison of relative poverty, there may be
need to differentiate between local, national and international levels of poverty
measurement.

Subjective Poverty: Closely related to poverty, subjective poverty has to do with

whether or not individuals or groups actually feel poor. This is because those
defined as poor by the standards of the present day, will probably have low self­
esteem, and hence see themselves as poor.

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Critique: A moderately-well-to-do person, who might have done much better
before, but currently experiencing cash-flow problems, may subjectively feel poor.
However he or she may be a way ahead of other members of society, who may not
see him/her as poor.
Groups or societies, seen as relatively poor by majority standards may also not see
themselves as poor. They may either be having different assessment standards. This
is often a problem with rural populations, who might just be content with provision
of a few key services such as running water9.

2.2 CONCEPTUAL FRAMEWORK OF INEQUALITY

2.2.1 MEANING OF INEQUALITY
The first question on which opinions differ is what is meant by ‘inequality’, because
it is a social judgment, and no attempt is made here to review the procedures through
which such judgments could be made. It is important to clarify, however, the way in
which the term is used.
As Bauer and prest (1973) have observed the term ‘inequality’ may either be applied
quite generally to cases where incomes or wealth are simply different, Just as we
might refer to two people being of equal height, or to be restricted to cases where
there is a moral content (i.e. a presumption that equality would be desirable). This
may be seen as parallel to the distinction drawn in the Oxford English Dictionary
between inequalities meaning ‘the fact of occupying a more or less advantageous
position’. The two uses of the term are clearly different one person may have a
higher income than another, but this may be considered not to be unjust because he
will have a correspondingly lower income next year. The mere existence of
disparities in income and wealth is not a sufficient bias for statement about justice or
injustice; we need to establish that the people involved are comparable in other
relevant aspects.
The use of the term in its general sense of income difference is widespread. To take
an example , Kuznets in his pioneering study of incomes in the United States set out
by stating that ‘when we say “income inequality” we mean simply differences in

9Nonjeru, Enos. H. (2004), “Bridging the qualitative-quantitative Methods of Poverty analysis”,

Paper written for work shop on SAGA Quantitative-Qualitative Methods for poverty analysis, at the
Grand Regency Hotel, Nairobi.

17
income without regard to their desirability as a scheme running counter to some
ideal of equality.
Thus term ‘inequality’ is confined to case where we are considering people whose
circumstances are comparable in other respects.
This use of term ‘inequality’ depends in turn on what other respects are considered
relevant. Again this is a matter for social judgement. Here are some of the important
factors which are likely to have to be taken into account.
Resources and needs: The flow of income received by an individual or the amount
he consumes has to be viewed in relation to his needs, as represented by such
consideration as his age, the size of his family and his health. What is generous for a
single man may be felt to be inadequate for a family of six. What is enough for a
child may not be enough for a working man. The distribution of income and wealth
has, therefore, to be assessed in the light of individual differences in needs.
Taste and Choice: individuals differ in their taste with regard to work, to save and
to risk taking. As a result people with the same opportunities may make different
decisions, leading to disparities in observed incomes or wealth. One person may
prefer a job with low earning but short working hours and little responsibilities. A
person who prefers to save while working to provide for old age may have more
wealth when he retires than those who preferred to consume when they were young.
Age and the life cycle: The distribution may be influenced by the systematic
variation of income and wealth over a typical person’s life. One person may be
richer than another because he is older and longer to save individuals may differ in
the time when they receive their peak incomes. One person may choose to forgo
earnings when young to train for a skilled job, whereas another does not.
Opportunity and income: The impact of random chance factors on the distribution
means that people who start out with the same opportunities ahead of them may still
end up with very different incomes. If we are concerned only with inequality of
opportunity, then all that is relevant is how they start out, whether, the expectation
of success is the same for everyone. If we are concerned with equality of outcome,
then the working of chance becomes a matter of concern.
These factors and others not mentioned, mean that it is not easy to move from
statement about differences in income and wealth to statement about justice and
injustice. There are many difficulties in reaching social judgements about the
allowance for differing needs, or in deciding between opportunities and outcomes.

18
Thus in general, inequality is used to refer to the unequal distribution on income and
wealth as well as of status and power10.
2.2.2 TYPES OF INEQUALITY
Some of the most important types of inequality are discussed below.
Economic inequality: Economic inequality comprises all disparities in the
distribution of economic assets and income. The term typically refers to inequality
among individuals and groups within a society, but can also refer to inequality
among countries. Economic inequality generally refers to equality of outcome, and
is related to the idea of equality of opportunities. It is a contested issue whether
economic inequality is a positive or negative phenomenon, both on utilization and
moral grounds.

Income disparity or wage gap is a term used to describe inequalities and

asymmetry in the distribution of wealth and income between socio-economic groups
within society.

International inequality -The term international inequality describes the

inequalities that exist between the nations. Commonly, one hears that America is
much more developed than India. For example, socio-economic disparity exists at
the global level, and that is why, countries are classified into two categories:
developed countries and underdeveloped countries. There are countries which are in
the process of developing, and such countries are referred to as developing
countries. Each country is at a different level of development, which causes
inequality between countries. Some countries have been endowed with resources in
abundance, while there are countries that are extremely poor in resources.
Differences in the availability of resources, by and large, cause disparity between
countries, and put them at different levels of development.

Social inequality refers to a lack of social equality, where individuals in a society

do not have equal social status. Instances that may involve being socially unequal
include property rights, voting rights, freedom to speech and get assembled, access
to health care, and education as well as many other social commodities.

I0B. Atkinson, A. (1975), “The Economics of Inequality”-A.B. Atkinson, Clarendon Press. Oxford.

19
Gender inequality: Gender inequality refers to the obvious or hidden disparity
between individuals due to gender. Gender is constructed both socially through
social interactions as well as biologically through chromosomes, brain structure, and
hormonal difference^Gender systems are often dichotomous and hierarchical; binary
gender systems may reflect onto the inequalities that manifest in numerous
dimensions of daily life. Gender inequality stems from distinctions, whether
empirically grounded or socially constructed

Interstate inequality: Like international inequality, there also exist inequalities

between the states of a country. Some states can be more developed than other
states, for example, in India, Punjab and Haryana are more developed than the other
states of the country.

2.2.3 NEED OF MEASURMENT OF INEQUALITY

Social Scientists in general and economists in particular are interested in knowing
the direction and magnitude of change in the level of inequality which may possess
certain desirable features. Units of human aggregates such as individual families
and households, communities and other social group formations, states and regions,
countries and blocks of countries are found differing in many attributes. Some of the
attributes such as income, consumption, wealth, knowledge, status and power are
highly valued by us. Measurement of the level of inequality in the distribution of
such attributes has often attracted the analysts. This helps in assessment of the
differences across space and changes over time. This can also help in gauging the
effects of policy interventions11.

2.2.4 MEASURES OF INEQUALITY

Measures of inequality fall into two classes, i.e. positive measures which make no
explicit use of any concept of social welfare, and the highest normative measures
which are based on an explicit formulation of social welfare and loss
incurred from unequal distribution. Some commonly used measures of inequality are
presented here:

"Chaubey, P.K. (1996), “Economic Inequality, Theory of Measurement”, Indian Economic

Association Trust for Research and Development, New Delhi.

20
Range: Range is perhaps the simplest measure of inequality, simply the difference
between the highest and lowest value of any variable, for example, income. If
income is equally distributed then the value of range will be equal to zero and if one
person receives the all income then the value of range will be equal to N. Thus the
value of range lies between zero and N.
Mean deviation: Mean deviation as a measure of inequality was proposed by Von
Bortkiewwicz in 1898. But the relative mean deviation as a measure of inequality
was introduced by C.Bresciani, Turroni in 1910. It is the arithmetic average of the
deviations of the various items of a series computed from some statistical average
say mean or median.

Standard deviation (or): standard deviation is the square root of the arithmetic
mean of the square of the deviation of items from the mean.

Coefficient of variation or relative standard variation: generally known as the

coefficient of variation, suggested by Pearson, it is defined as the standard deviation
divided by the mean, multiplied by 100.

Coefficient of variation= (o / Arithmetic mean) x 100

Here o = standard deviation

Variance: variance is simply the square of standard deviation.

Gini-coefficient of inequality: This is the most commonly used measure of

inequality purposed by Corrado Gini in 1912. The coefficient varies between 0,
which reflects complete equality and 1, which indicates complete inequality (one
person has all the income or consumption, all others have none). Graphically the
Gini Coefficient can be easily represented by the area between Lorenz curve and
line of equality.

Lorenz curve: Lorenz curve is a graphical measure of inequality developed by

economist Max Lorenz in 1905. It is a diagram illustrating the degree of inequality
and concentration for a group. This is accomplished by plotting the cumulative
percentage of a total amount obtained by cumulative percentages of the group. A

21
common use of the Lorenz curve is the distribution of income, in which the
cumulative percentage of income is measured on the vertical axis and the cumulative
percentage of the population is measured on the horizontal axis. Perfect equality is
indicated by a 45-degree line (i.e. 10 percent of the population has 10 percent of the
income, 20 percent of the population has 20 percent of the income, etc.). The actual
Lorenz curve inevitably lies below the 45-degree line. The extent that the Lorenz
curve differs from the 45-degree line indicates the extent of inequality.

23 POVERTY AND INEQUALITY

Poverty as concept is closely related to inequality. Given the average income level, a
higher level of inequality (reflected by the usual measures) will tend to be associated
with a higher level of poverty. Furthermore, the so- called ‘poverty line’ may
sometimes be drawn in the light in the socially accepted ‘minimal’ standard of living
and the latter can be influenced by the average income level, so that measures, thus
defined may catch an aspect of relative inequality as well.
The famous study groups (set up by the planning commission) that sanctified in
1962 the figure of Rs 20 per month at 1960-61 prices as the poverty level had
considered nutrition, but did not specify any particular nutritional norm nor any set
of prices as a justification for its choice of Rs 20. That number has been widely used
alone with other rules of thumb e.g. Bardhan’s Rs 15 for rural and Rsl8 for urban
areas, and Dandekar and Rath’s Rsl5 for rural and Rs 22.50 for urban areas. While
other estimates were also done by Ojha, Dandekar and Rath and Bardhan using
specific nutritional standards, many of the poverty estimates are based on minimal
levels that directly or indirectly take note of the prevailing social ideas on the subject
of poverty. The number of the poor in such a contest is also partly a reflection of
relative inequality and the same authors would have presumable used different
norms if they were to estimate, say in the United States. Thus the identification of
poverty with inequality though illegitimate is not easily dismissable as it may appear
at first sight. However, even if the minimal level is determined entirely by the actual
distribution of income (e.g. equated to some fraction of the mean or the mode) the
number of the poor will still is a very gross measure of inequality. .

,2Sen, Amartya (1990), “Poverty Inequality and Unemployment- Some Conceptual issues in
Measurement”, Poverty and Income Distribution - Edited by Krishna Swamy, Oxford University
Press.

22
Thus the idea that the concept of poverty is essentially one of inequality has some
immediate plausibility. After all, transfer from the rich to the poor can make
substantial dent on poverty in most societies. Even the poverty line to be used for
identifying the poor has to be drawn with respect to contemporary standards in the
community in questions, so that poverty may look very like inequality between the
poorest group and the rest of the community. Argument in favour of viewing
poverty as inequality are presented powerfully by Miller and Roby, who conclude
:casting the issues of poverty in term of stratification leads to regarding poverty as
an issue of inequality. In this approach, we move from efforts to measure poverty
lines with pseudo-scientific accuracy. Instead we look at the nature and size of the
differences between the bottom 20 or 10 percent and the rest of the society. Our
concern becomes one of the narrowing the differences between those at the bottom
and the better off in each stratification dimension.
There is clearly quite a bit to say in favour of this approach. But one can argue that
inequality is fundamentally a different issue from poverty. To try to analyze poverty
as an issue of inequality or the other way round would do little justice to either.
Inequality and poverty are not, of course, unrelated. But neither concept subsumes
the other . The question of interrelation between poverty and inequality are two
sides of the same coin. The assumption is sometimes made explicit but more often it
is left implicit. Where there is an increase in the number and proportion of those
below poverty line, the presumption is of an increase of inequality. It is therefore
recognized that there are inequalities among the poor themselves. This has led to the
construction of indices to test the depth and intensity of poverty.
Those interested in social theory rather than social policy recognizes that the
relationship between poverty and inequality is neither clear not direct. Poverty and
inequality are analytically distinct concepts. They are very independent of each other
and it is misleading beyond a point to treat the one as a maker of the other. There is
a high incidence of poverty inequality is generally widespread for contrary examples
may also be found. The study of both poverty and inequality has been closely
associated with an interest in economic and social change. But poverty and
inequality do not change at the same pace, and they may even change in opposite
directions.

l3Sen, Amartya (1982), “Poverty and Famines: - An Essay on Entitlement and Deprivation Oxford
University Press.

23
An increase in poverty may be accompanied by a decrease in inequality overall
although examples of this may difficult to find in contemporary world. The aim of
policy makers concerned with social welfare has in general been to bring about
simultaneously a reduction in both poverty and inequality. Although this aim has
proved difficult to accomplish.
The divergence of views regarding the relationship between poverty and inequality
is largely due to the fact that there are different conception of poverty and different
kind of inequality. Suffice it to say here that there is a relative and an absolute
concept of poverty, and that there are many kinds of inequality, besides those of
income and expenditure. Those who use an absolute concept of poverty find it easier
to delink poverty and inequality, particularly, when their concern is mainly with
inequalities of income and expenditure. On the other hand, those who adopt a
relative concept of poverty tend to argue that there is a close if not inextricable
relationship between inequality and poverty14.

14Bteille , Andre (2003), “Poverty and Inequality”, Economic and Political Weekely, 18 Oct.

24