SYNOPSIS

TOPIC: THE CONCEPT OF POVERTY

1. INTRODUCTION
2. DEFINITION OF POVERTY
3. MEANING AND CONCEPT
4. POVERTY LINE
5. CAUSES OF POVERTY
6. EFFECTS OF POVERTY
7. POVERTY AS CHALLENGE
8. ROLE OF GOVT. TO ERADICATE POVERTY
9. CONCLUSION
10.BIBLIOGRAPHY
INTRODUCTION
Poverty is a state or condition in which a person or community lacks the financial resources
and essentials for a minimum standard of living. Poverty means that the income level from
employment is so low that basic human needs can't be met. Poverty-stricken people and
families might go without proper housing, clean water, healthy food, and medical attention.
Each nation may have its own threshold that determines how many of its people are living in
poverty.

In the simplest term, poverty may be defined as a social condition where individuals do not
have financial means to meet the most basic standards of life that is acceptable by the society.
Individuals experiencing poverty do not have the means to pay for basic needs of daily life
like food, clothes and shelter.

Poverty also staves people off from accessing much needed social tools of well-being like
education and health requirements. The direct consequences stemming from this problem are
hunger, malnutrition and susceptibility to diseases which have been identified as major
problems across the world. It impacts individuals in a socio-psychological way with them not
being able to afford simple recreational activities and getting progressively marginalized in
the society.

DEFINITION OF POVERTY

The definition of poverty is very complex. A definition is difficult to formulate because

poverty means different things to different people. Some people may define poverty as a lack
of income resulting in the absence of a car or refrigerator, while others may describe it as a
lack of formal housing, basic services or opportunities for training and employment.

Poverty and the poor are associated with a state of want and deprivation and, secondly, that
such deprivation is related to the necessities of life. Experiences of poverty differ from person
to person, from one area to another, and across time. Poverty in India differs from the poverty
experienced in England,

According to Goddard, Poverty is insufficient supply of those things which are necessary for
a individual to maintain himself and those dependent upon himself.

According to World Bank, Poverty is hunger. Poverty is lack of shelter. Poverty is being sick
and not being able to see a doctor. Poverty is not being able to go to school and not knowing
how to read. Poverty is not having a job, is fear of the future, living one day at a time.
Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness,
lack of representation and freedom. 
CONCEPT OF POVERTY

The concept of Poverty is Multi-dimensional. It covers not only the level of income and
consumption, but also health and education, and marginalization and exclusion of poor from
mainstream. Literally, Poverty means scarcity or few. From social and economic point of
view, it refers to that state or condition which fails to provide minimum necessities of life.
Poverty is a state in which the section of society is unable to get basis necessities.

Poverty is a relative concept. No individual or country is absolute poor or rich. A man is poor
or rich in comparison to others. Adam smith says, “Man is poor or rich according to degrees
in which he can afford to enjoy the necessaries, convenience, and amusement of life.” The
form of these necessities changes from time to time and from place to place.

Poverty hinders the economic development of a country by reducing working capacity,

efficiency, savings and investment. If mass population remains below poverty line it will
reduce savings, investment, income and employment. Thus, vicious circle of poverty operates
in a country. Poverty cannotes that the people who do not enjoy a certain minimum
consumption standard should be regarded as poor. Experts who have studied poverty
quantitatively find it difficult to agree on the amount of income that will ensure the minimum
consumption standard at specified time. There are no of studies made by individual as well as
by Govt. on the incidence of poverty.

POVERTY LINE:

Poverty line is the level of income to meet the minimum living conditions.

Poverty line is the amount of money needed for a person to meet his basic needs. It is defined
as the money value of the goods and services needed to provide basic welfare to an
individual.

Poverty line differs from one country to another, depending upon the idea of poverty

Poverty line changes from one country to another. In developed countries, where there is
advanced standard of living and welfare concepts, poverty line is high as basic standard to
live include higher consumption requirements and accessibility to many goods and services.

On the other hand, in many less developed countries, the basic requirements will be low and
contains mostly essential consumption items needed to sustain life. This means that poverty
line is set by the welfare standard in a particular society (economy).

Poverty line in India

India is having a well-designed poverty measurement mechanism under the erstwhile

Planning Commission. The Planning Commission was the nodal agency for estimation of
poverty. For setting poverty line and methodology of constructing it, the Planning
Commission appointed Expert Groups from time to time. The planning commission estimates
the number of people below poverty line in states as well as in the rural and urban areas based
upon the prevailing poverty estimation methodology submitted by the expert groups.

The old formula for estimating the poverty line is based on the desired calorie requirement.
Food items such as cereals, pulses, vegetables, milk, oil, sugar etc. together provide these
needed calories. The calorie needs vary depending on age, sex and the type of work that a
person does. The accepted average calorie requirement in India is 2400 calories per person
per day in rural areas and 2100 calories per person per day in urban areas. Since people living
in rural areas engage themselves in more physical work, calorie requirements in rural areas
are considered to be higher than urban areas. On the basis of these calculations, for the year
2000, the poverty line for a person was fixed at Rs. 328 per month for the rural areas and Rs
454 for the urban areas. In this way in the year 2000, a family of five members living in rural
areas and earning less than about Rs 1,640 per month will be below the poverty line.

CAUSES OF POVERTY

1. Demographic – the main factor that contributes to poverty-ridden state of the country
from a demographical point of view is the problem of over population. The growth of
population in the country has so far exceeded the growth in economy and the gross
result is that the poverty figures have remained more or less consistent.

2. Economic –there are a host of economic reasons behind persistence of the poverty
problems which are outlined hereunder:-

a. Poor Agricultural Infrastructure - . As a consequence there is redundancy and

sometimes complete lack of work leading to decreased wages that is insufficient
for meeting daily needs of a labourer’s family plunging them into poverty.

b. Unemployment – another major economic factor that is causative of poverty in

the country is the rising unemployment rate. Unemployment rates is high in India
and according to survey data, at the all-India level, 77% of families do not have a
regular source of income.

c. Inflation and Price hike – the term Inflation may be defined as an increase in
prices of commodities coinciding with the fall in the purchasing value of money.
As a direct consequence of inflation, effective price of food, clothing items as well
as real estate rises. 

3. Social – The various social issues plaguing the country that contributes towards
poverty are:-

a. Education and illiteracy –lack of education and illiteracy prevent individuals

from getting better paying jobs and they get stuck at jobs offering minimum
 wages. Improvement of quality of life gets hindered and the cycle once again
comes into action.

b. Lack of skilled labour – lack of adequate vocational training makes the huge
labour force available in India largely unskilled, which is unsuitable for offering
maximum economic value. Lack of education, much less higher education, is also
a contributing factor towards this.

c. Gender inequality –the weak status attached with women, deep-rooted social
marginalization and long embedded perceptions of domesticity renders about 50%
of the country’s population unable to work. As a result the women of the family
add to the number of dependents that need to be fed instead of being able to
contribute considerably in the family income which might assuage the poverty
situation of the family.

d. Corruption – despite considerable efforts from the government in the forms of

various schemes to mollify the poverty situation, allegedly only 30-35% actually
reaches the beneficiaries due to wide-spread practices of corruption in the
country. 

4. Individual – individual lack of efforts also contribute towards generating poverty. Some
people are unwilling to work hard or even not willing to work altogether, leaving their
families in the darkness of poverty. Personal demons like drinking and gambling also leads to
draining of the family income inciting poverty.

5. Political – in India, socio-economic reform strategies has been largely directed by political
interest and are implemented to serve a choice section of the society that is potentially a
deciding factor in the elections. As a result, the issue is not addressed in its entirety leaving
much scope of improvements.

Effects of Poverty

1. Effect on Health – one of the most devastating effects that poverty has is on the
overall health of the nation. The most prominent health issue stemming from poverty
is malnutrition. The problem of malnutrition is widespread in all age-groups of the
country but children are most adversely affected by this. Limited income in larger
families leads to lack of access to sufficient nutritious food for their children. These
children over time suffer from severe health problems like low body weight, mental,
physical disabilities and a general poor state of immunity making them susceptible to
diseases. 

2. Effects on Society

a. Violence and crime rate -In a backdrop of unemployment and marginalization,

the poor resort to criminal activities to earn money. Coupled with lack of
education and properly formed moral conscience, a poverty ridden society is more
 susceptible to violence by its people against its own people from a sense of deep-
seated discontent and rage.

b. Homelessness – apart from a definite drop in the esthetic representation of the country,
homelessness affects child health, women safety and overall increase in criminal tendencies.

c. Stress – lack of money is a major cause of stress among the middle-class and the poor and
leads to decline in productivity of individuals.

e. Child labour – one of the hallmarks of a poverty-ridden society is the widespread

practices of exploitation and the worst of it comes in the form of child labour.
Large families fail to meet the monetary needs of the members and children as
young as 5 years are made to start earning in order to contribute to the family
income.

3. Effect on Economy –poverty is a direct index indicating success of the economy of

the country. The number of people living under the poverty threshold indicates
whether the economy is powerful enough to generate adequate jobs and amenities for
its people. Schemes providing subsidies for the poor of the country again impose a
drain on the economy.

POVERTY AS CHALLENGE.

The problem of poverty is considered as the biggest challenge to development planning in

India. High poverty levels are synonymous with poor quality of life, deprivation,
malnutrition, illiteracy and low human resource development. Poverty can be defined as a
social phenomenon in which a section of the society is unable to fulfil even its basic
necessities of life.

Household expenditure is considered for calculating the poverty count in India. In this
method, the purchasing power of people for buying food and some essential non-food items
is taken into account. In the last few years, though the condition in cities continues to be more
or less the same, the government welfare programmes have really helped reduce the
incidence of poverty in rural India. Schemes such as MGNREGS have resulted in a decrease
in the poverty in rural areas at a faster pace than their urban counterparts.
But in spite of all the attempts, the overall number of poor in India is still increasing and
becoming a hurdle. Poverty is just like a disease to which many other problems such as
crime, low-paced development, etc. are associated. There are number of people in India who
still live on the streets and beg for the whole day to eat a meal. Underprivileged children are
unable to attend school and, and those have the opportunity drop out after a year or so. People
below poverty line live in unhygienic conditions and are so prone to many health problems.
With this, the vicious cycle of poor health, lack of education and more poverty keeps on
increasing.

60% of the poor still reside in the states of Bihar, Jharkhand, Odisha, Madhya Pradesh,
Chhattisgarh, Uttar Pradesh and Uttarakhand. The reason for these states to be in the category
of the poorest state is because 85% of tribal people live there. Also, most of these regions are
either flood-prone or suffer from calamities. These conditions hamper agriculture to a great
extent, on which the household income of these groups depends.

According to the Global Hunger Index Report 2018 by the International Food Research
Institute, India ranks 103 in the Global Hunger Index (GHI). Though there is no shortage of
food production in India, our nation still has 35.8% of children under five in the underweight
category. India is working hard to become a superpower in 2020, but such statistics are
worrisome, as our nation still lags behind in improving GHI. At the same time, India seems to
have achieved commendable success towards poverty eradication, because it is no longer the
country with the largest number of poor people.

In 2018, for the first time in decades, Nigeria pipped India to the top slot in terms of the total
number of people living in extreme poverty. As per World Poverty Clock, India’s figure of
70.6 million was surpassed by Nigeria’s 87 million people living in extreme poverty.

ROLE OF GOVT. TO ERADICATE POVERTY.

Ever since coming to power, the current government has come up with several programmes
in order to ease the burden of poverty holding India back. The Pradhan Mantri Jan Dhan
Yojana (PMJDY) is one such programme. It looks to provide economically-disadvantaged
people access to different financial services such as a basic savings account, insurance, credit
as and when needed, pension and remittances. People who invest in this scheme can earn
interest on the amount deposited by them, and have accidental insurance cover amounting to
Rs. 1 lakh. The programme does not have a minimum amount that has to be always
maintained.

Insurance Programmes
On 9th May, a couple of insurance programmes were launched for members of lower income
groups and economically-backward sections – Pradhan Mantri Jeevan Jyoti Bima Yojana
(PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY). The age group covered by
PMJJBY is 18-50 years. People willing to be insured under this programme need to pay a
yearly premium of Rs. 330 and they will be provided a life cover amounting to Rs. 2 lakhs.

Agricultural Schemes

The Kisan Vikas Patra, which had been introduced for the first time by India Post way back
in 1998, was re-launched. Farmers can invest in this programme in denominations like 1,000;
10,000; 5,000; and 10,000. Investors can expect their money to be doubled after 100 months.
The saving certificate scheme can be issued either in the name of one person or many at a
time.

RURAL SCHEMES

The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) programme is supposed to
provide rural areas continuous supply of power. As a part of the plan, the national
administration will invest Rs. 75,600 crore. It has replaced the Rajiv Gandhi Grameen
Vidyutikaran Yojana. The Deen Dayal Upadhyaya Grameen Kaushalya Yojana was launched
on 25thSeptember 2014, which is the 98thbirth anniversary of Pandit Deendayal Upadhyay. It
looks to provide jobs in rural India to people between the age group of 18-35 years.

National Rural Employment Guarantee Act (NREGA)

The NREGA bill was passed in 2005 and it became effective from 2006. It became the
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2008. As per
the programme, 100 days of work are guaranteed to people in villages across the country. It
has been a successful programme as far as increasing the income levels of poor people in the
rural areas is concerned. It provides work opportunities to people as and when they ask for it

In-Kind Benefits
In-kind benefits are a non-cash alternative to regular benefits. The idea behind this is to
provide low-income families and individuals directly with access to certain goods and
services they need most to increase their standard of living. For instance, there are a large
number of charities (government and non-government) that provide food, shelter, or clothing
for those most in need.
Sustained economic growth

The argument is that promoting economic growth increases total income in society, creating
more jobs and income which could be redistributed. In the past 100 years, economic growth
has been a major factor in reducing the levels of poverty which were seen in pre-war Britain
and the US.

2. Reduce Unemployment

Poverty and unemployment are often geographical problems, with depressed areas seeing
higher levels of poverty. Policies to overcome geographical poverty could include
government subsidies for firms to set up in depressed areas. Also building better
infrastructure (transport and communication) in depressed areas can provide an economic
stimulus to create new jobs.

3. Progressive Taxes

Increasing progressive taxes such as the higher rate of income tax from 40% to 50%, will
take more income from those on high-income levels. This enables cuts in regressive
taxes (e.g. VAT/Sales tax) and increased welfare benefits which help increase the income of
the poor. This can be an effective way to reduce relative poverty.

Minimum wage laws

Minimum wage laws require all employers to pay their employees a minimum amount of
wage that is determined by the government. The idea behind minimum wage laws is to help
the working poor without directly increasing government spending. Labor unions are some of
the most influential advocates of minimum wages. They often try to establish a minimum
wage for their members.

Following are some other plans initiated by the national government for poverty alleviation in
India:

 Annapurna

 National Rural Employment Programme (NREP)

 National Maternity Benefit Scheme (NMBS)

  Rural Labour Employment Guarantee Programme (RLEGP)

 National Family Benefit Scheme (NFBS)

 TRYSEM Scheme

 National Old Age Pension Scheme (NOAPS)

 Jawahar Rojgar Yojna (JRY)

 Outlawing bonded labour

 Swarna Jayanti Gram Swarozgar Yojna

CONCLUSION
BIBLIOGRAPHY
1. https://www.toppr.com/guides/economics/poverty-as-a-challenge/poverty/
2. https://www.mapsofindia.com/my-india/india/what-is-the-government-doing-to-eradicate-
poverty
3. https://learn.culturalindia.net/essay-poverty-india-causes-effects-solutions.html
4.