A PROJECT REPORT ON

Legal Measures to remove Poverty in India

Submitted to:
Dr. HanumantYadav
(Professor, Economics)
Submitted by:
Pranav Vaidya
Roll no:-117
Semester-III

Date of Submission: 10th October 2014

Hidayatullah National Law University

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Table of contents:

 Declaration
 Acknowledgements.
 Objectives.
 Research Methodology.
 Introduction.
 Evolution of Communalism.
 Understanding Communalism.
 Impact of Communalism on Indian Politics.
 Eradication of Communalism from Indian Politics.
 Conclusion.
 References.

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 Declaration

I, Pranav Vaidya, hereby declare that, the project work entitled, “Legal Measures to
remove Poverty in India” submitted to H.N.L.U., Raipur is record of an original
work done by me under the guidance of Dr.HanumantYadav, Professor,
Economics, H.N.L.U., Raipur.

Pranav Vaidya

Semester III

Roll No. 117

Section C

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 ACKNOWLEDGEMENT

First & foremost, I take this opportunity to thank Dr. HanumantYadav, Professor, Economics,
HNLU for allotting me this challenging topic to work on. He has been very kind in providing
inputs for this work, by way of suggestions and by giving his very precious time for some
discussion. Hence I would like to thank him for all his cooperation and support.

I would also like to thank the University Administration for equipping the University with such
good library and IT lab.

Last but not the least, I would like to thank my friends for having a wonderful debate and
discussion in the hostel, and hence creating a knowledge base for various aspects of this society
as well as our education.

Pranav Vaidya

Roll No.-117, Sec-C

Semester- III

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Objectives:
The objective of the project is:

1. To understand the existence of poverty in India.

2. To understand the root causes behind its existence.
3. To understand the legal measures and steps taken by the Indian Government to eradicate
poverty.

Methodology:
This projects work is based on the descriptive approach as it requires a deep study of the topic
followed by thorough description.It is based on secondary sources, i.e., books and electronic
sources (internet).

Websites, dictionaries and articles have also been referred.

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 Introduction
Poverty has been one of the widespread problems in relation to the development of countries like
India. But in spite of all the efforts, overall number of poor in India is 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. Poor children are unable to attend school and, if they do
attend, they tend to leave the school 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.

In general terms, Poverty can be defined in terms of both income-based poverty definition and
consumption-based poverty statistics are in use.  Outside India, the World Bank and institutions
of the United Nations use a broader definition to compare poverty among nations, including
India, based on purchasing power parity (PPP), as well as nominal relative basis.  Each state in
India has its own poverty threshold to determine how many people are below its poverty line and
to reflect regional economic conditions. These differences in definition yield a complex and
conflicting picture about poverty in India, both internally and when compared to other
developing countries of the world. Despite the country's meteoric GDP growth rate (about 9%),
poverty in India is still pervasive; especially in rural areas where 70% of India’s 1.2 billion lives.
It is one of the fastest growing economies in the world and yet its riches are hardly redistributed
across the population.

The problem of poverty has been a big issue that its existence lies way back to the time of
independence of India. The colonial rule of the British had drained all the wealth of the country
leaving it dependent for its needs to the other countries. Government has been trying out from a
long time to curb out the problem of poverty with the help of various plans, strategies and
policies. But the roots of poverty in Indian society have got strengthened with time, whose
results can be judged from the failure of all these policies. In this project work, I will be trying to
understand these deepened roots of poverty, along with its causes and legal as well as non-legal
measures to remove the problem of poverty from India.

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 Section-I

Poverty: Earlier phase & Concept

1. What is Poverty?

Poverty is about not having enough money to meet basic needs including food, clothing and
shelter.  However, poverty is more, much more than just not having enough money.

The World Bank Organization describes poverty in this way:

“Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a
doctor. Poverty is not having access to school and not knowing how to read. Poverty is not
having a job, is fear for the future, living one day at a time.

Poverty has many faces, changing from place to place and across time, and has been described
in many ways.  Most often, poverty is a situation people want to escape. So poverty is a call to
action -- for the poor and the wealthy alike -- a call to change the world so that many more may
have enough to eat, adequate shelter, access to education and health, protection from violence,
and a voice in what happens in their communities.”

In addition to a lack of money, poverty is about not being able to participate in recreational
activities; not being able to send children on a day trip with their schoolmates or to a birthday
party; not being able to pay for medications for an illness.  These are all costs of being poor.
Those people who are barely able to pay for food and shelter simply can’t consider these other
expenses.  When people are excluded within a society, when they are not well educated and
when they have a higher incidence of illness, there are negative consequences for society.  We all
pay the price for poverty.  The increased cost on the health system, the justice system and other
systems that provide supports to those living in poverty has an impact on our economy.

While much progress has been made in measuring and analyzing poverty, the World Bank
Organization is doing more work to identify indicators for the other dimensions of poverty.  This

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work includes identifying social indicators to track education, health, access to services,
vulnerability, and social exclusion. There is no one cause of poverty, and the results of it are
different in every case. Poverty varies considerably depending on the situation. Feeling poor in
Canada is different from living in poverty in Russia or Zimbabwe.  The differences between rich
and poor within the borders of a country can also be great. Despite the many definitions, one
thing is certain; poverty is a complex societal issue. No matter how poverty is defined, it can be
agreed that it is an issue that requires everyone’s attention.

2. Before Independence

India’s government is well aware that poverty is a giant barrier to overcome if it is to fully
develop the nation. A wide range of anti-poverty policies have been introduced since the 1950s,
which nonetheless took effect after 20 years of implementation.But in spite of all the efforts,
overall number of poor in India is 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. Poor children are unable to attend school and, if they do attend, they tend to leave the
school 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.

Due to various policies implemented by the British government in the course of Colonial rule
which existed in India, the unemployed artisans were forced to move into farming, and
transformed India as a region increasingly abundant in land, unskilled labor and low
productivity, and scarce in skilled labor, capital and knowledge.On inflation adjusted 1973
Rupee basis, the average income of Indian agrarian laborer was Rs.7.20 per year in 1885, against
an inflation adjusted poverty line of Rs. 23.90 per year 1. Thus, not only was the average income
below poverty line, the intensity of poverty was severe. The intensity of poverty increased from
1885 to 1921, then began a reversal. However, the absolute poverty rates continued to be very
high through the 1930s. The colonial policies on taxation and its recognition of land ownership
claims of zamindars and mansabdars, or Mughal era nobility, made a minority of families

1 . T. Roy, London School of Economics, Globalization, Factor Prices and Poverty in Colonial India, Australian Economic
History Review, Vol. 47, No. 1, pp. 73-94 (March 2007).

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wealthy, while it weakened the ability of poorer peasants to command land and credit. The
resulting rising landlessness and stagnant real wages intensified poverty.

According to the Global Hunger Index Report 2012 by the International Food Research Institute,
India ranks 65 in Global Hunger Index. Though there is no shortage of food production in India,
our nation still has the highest percentage of underweight children under five. India is working
hard to become a superpower in 2020, but what about these poor in India as our nation still lags
behind in improving GHI.India at present has a greater share of the poor around the world. Thirty
years ago, India was home to one-fifth of world’s poor but now it is a home to one-third of poor
people. This means we now have more poor in India as compared to thirty years ago. But the
problem still remains the same; as a hindrance to the overall development of the country.

The National Planning Committee defined goals in 1936 to alleviate poverty by setting targets in
terms of nutrition (2400 to 2800 calories per adult worker), clothing (30 yards per capita per
annum) and housing (100 sq. ft per capita). This method of linking poverty as a function of
nutrition, clothing and housing continued in India after it became independent from British
colonial empire.

These poverty alleviation goals were theoretical, with administrative powers resident in the
British Empire. Poverty ravaged India. In 1943, for example, despite rising agricultural output in
undivided South Asia, the Bengal famine killed millions of Indians from starvation, disease and
destitution. Destitution was so intense in Bengal, Bihar, eastern Uttar Pradesh, Jharkhand and
Orissa that entire families and villages were "wiped out" of existence. Village artisans, along
with sustenance farming families, died from lack of food, malnutrition and a wave of diseases.

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 3. After Independence

1970s - 1980s

Dandekar and Rath in 1971 used a daily intake of 2,250 calories per person to define the poverty
line for India. Using NSSO data regarding household expenditures for 1960–61, they determined
that in order to achieve this food intake and other daily necessities, a rural dweller required an
annual income of 170.80 per year ( 14.20 per month, adjusted to 1971 Rupee). An urban
dweller required 271.70 per year ( 22.60 per month). They concluded from this study that 40
percent of rural residents and 50 percent of urban residents were below the poverty line in 1960–
61.

Poverty alleviation has been a driver for India's Planning Commission's Task Force on
Projections of Minimum Needs and Effective Consumption Demand of the Perspective Planning
Division. This division, in 1979, took into account differences in calorie requirements for
different age groups, activity levels, and sex. They determined that the average rural dweller
needed around 2400 calories, and those in urban areas required about 2100 calories per person
per day. To satisfy the food requirement, the Task Force estimated that a consumer spending in
1973–74 of Rs.49.09 per person per month in rural areas and Rs.56.64 in urban areas was
appropriate measure to estimate its poverty line.

Poverty remained stubbornly high in India through the 1970s and 1980s. It created slogans such
as Garibi Hatao (literally, abolish poverty) for political campaigns, during elections in early
1970s through the 1980s. Rural poverty rate exceeded 50%, using India's official poverty line for
1970s.

1990s

Another Expert Group was instituted in 1993, chaired by Lakdawala, to examine poverty line for
India. It recommended that regional economic differences are large enough that poverty lines
should be calculated for each state. From then on, a standard list of commodities were drawn up
and priced in each state of the nation, using 1973–74 as a base year. This basket of goods could

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then be re-priced each year and comparisons made between regions. The Government of India
began using a modified version of this method of calculating the poverty line in India.

There are wide variations in India's poverty estimates for 1990s, in part from differences in the
methodology and in the small sample surveys they poll for the underlying data. A 2007 report for
example, using data for late 1990s, stated that 77% of Indians lived on less than 20 a day (about
US$0.50 per day). In contrast, Datt estimated India's national poverty rate to be 35% in 1994, at
India's then official poverty line of Rs 49 per capita, with consumer price index adjusted to June
1974 rural prices.

2000s

Saxena Committee report, using data over 1972 to 2000, separated calorific intake apart from
nominal income in its economic analysis of poverty in India, and then stated that 50% of Indians
lived below the poverty line. The Planning Commission of India, in contrast, determined that the
poverty rate was 39%.

The National Council of Applied Economic Research estimated that 48% of the Indian
households earn more than 90,000 (US$1,476.00) annually (or more than US$ 3 PPP per
person). According to NCAER, in 2009, of the 222 million households in India, the absolutely
poor households (annual incomes below 45000 (US$740) accounted for only 15.6% of them or
about 35 million (about 200 million Indians). Another 80 million households are in income
levels of 45000 (US$740) to 90000 (US$1,500) per year. These numbers are similar to World
Bank estimates of the "below-the-poverty-line" households that may total about 100 million (or
about 456 million individuals).

2010s

The World Bank has reviewed its poverty definition and calculation methodologies several times
over the last 25 years. In early 1990s, The World Bank anchored absolute poverty line as $1 per
day. This was revised in 1993, and the absolute poverty line was set at $1.08 a day for all
countries on a purchasing power parity (PPP)basis, after adjusting for inflation to the 1993 U.S.
dollar. In 2005, after extensive studies of cost of living across the world, The World Bank raised
the measure for global poverty line to reflect the observed higher cost of living. Thereafter, the

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World Bank determined poverty rates from those living on less than US$1.25 per day on 2005
PPP basis, a measure that has been widely used in media and scholarly circles.

In May 2014, after revisiting its poverty definition, methodology and economic changes around
the world, the World Bank proposed another major revision to PPP calculation methodology,
international poverty line and indexing it to 2011 U.S. dollar. The new method proposes setting
poverty line at $1.78 per day on 2011 PPP basis. According to this revised World Bank
methodology, India had 179.6 million people below the new poverty line, China had 137.6
million, and the world had 872.3 million people below the new poverty line on an equivalent
basis as of 2013. India, in other words, while having 17.5% of total world's population, had
20.6% share of world's poor.

Actual poverty reduction versus expected poverty reduction under equitable growth
graphical representation-

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Percentage of people below the poverty line graphical representation-

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 Section-II

Causes of Poverty in India

Due to the structure of economy prevailing in India, there exists a huge gap in Incomes among
the rich and the poor. Not only that, government policies is directed in a way that focuses upon
kind of people, rich and the poor; as a result of which the so called gap between the rich and the
poor remains the same always.
There are numerous reasons behind the existence of such deep roots of poverty in India2:

1. Limited reforms:

Of the post-independence reforms that have achieved the most in terms of reducing poverty
in India, land reforms get the winning prize. By suppressing intermediaries, simplifying and
standardizing the system of tenancy, production relations were made more efficient and rural
wages went up. But if they had actually redistributed the land - as opposed to preserving the
nearly- feudal system plus incentives and subsidies for big land owners - they could have
really eradicated one of the causes of poverty in India.\

2. Globalization's effects on poverty in India:

1991 is the year that India embraced globalization and started, like many countries, its market
liberalization coupled with privatization and deregulation while ensuring macroeconomic
stability. Where China has been one of the few countries that have successfully managed
their transition to the global market, the picture is more mixed with India, with lots of ups
and downs.

3. Weak democracy and economic opening:

2 . CIA World Fact Book. 7 August 2008. Retrieved 20 August 2008.

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The Indian society is so diverse that the rapid and unequal growth has brought overwhelming
inequalities which in a democratic country are rather dangerous. Truth be told: it’s dangerous
anywhere. But people have more opportunities to voice their concerns in a democracy, and
reaching a consensus on a long-term goal can prove an impossible mission. Tensions
between social groups make it impossible to negotiate, make concessions and solve
problems. That’s why in most cases reforms in rural areas have been mostly half-measures
and limited short-term solutions that have hardly made a dent in poverty reduction in India.
On the other hand, reforms at the macro level encouraging the development of new sectors
and exchanges with the world have been successful and benefited mostly urban populations
and the corporate sector. Many surveys confirm that the population is convinced that the
reforms have benefited mostly the rich while the rest still lack access to basic services.

High population growth rate is one of major reasons of poverty in India. This further leads to
high level of illiteracy, poor health care facilities and lack of access to financial resources.
Also, high population growth affects the per capita income and makes per capita income
even lower. It is expected that population in India will reach 1.5 billion by 2026 and then
India will be the largest nation in the world. But India’s economy is not growing at the same
pace. This means shortage of jobs. For this much population, near about 20 million new jobs
would be required. Number of poor will keep on increasing if such a big number of jobs
won’t be created.

Ever increasing prices of even basic commodities is another reason of poverty. A person
below the poverty line finds it difficult to survive. Caste system and unequal distribution of
income and resources is another reason of poverty in India.

Apart from all these, unskilled workers are paid very low in spite of hard work they put daily.
The problem lies with the unorganized sector as owners do not bother the way their workers
live and the amount they earn. Their area of concern is just cost-cutting and more profit.
Because of the number of workers looking for a job is higher than the jobs available,
unskilled workers have no other option but to work for less money. The government should

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really find a way to impose minimum wage standards for these workers. At the same time,
the government should ensure that this is implemented well.

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 Section-III

Legal Measure and strategies taken by Government

From the time of Independence of India, Government has initiated various policies as well as
strategies to improve the conditions of poor people living in India. Though these policies have
not been so effectively successful ones, yet they have shown continuous signs of improvements.

1. Access to markets and education for everyone.

Overall, the opening of Indian markets to the world did over the years contribute to reducing
poverty in India by raising the income of a large number of people, and opening access to
education to many. Liberalizing the system of exports, imports and trade, along with the
development of higher education in larger cities has been the major factor leading to the rise
of the middle class and reduction of urban poverty in India. However, considering the scale
of the country, it means that trade reforms and education should penetrate all layers of
society if poverty is to be tackled substantially.

2. Investing in India's infrastructures and nascent sectors:

As over 2/3rd of the population lives in rural areas, public investment should focus on
developing agriculture and basic infrastructures, but "for real" this time. While drought
has become the plight of so many places on earth, a lot of Indian regions have plenty of
water and plenty of people to exploit the land, rather than being excluded. On top of that,
the manufacturing sector is starting to boom so now is the best time to improve
agricultural productivity and employ the jobless or underemployed migrating to the cities.
The private sector will be more than happy to invest and trade with new regions, but not
as long as they’re unprofitable or inaccessible. And that is the role of the state: to provide
at least the most basic infrastructure and roads to connect villages. Finding these funds
won’t even be that hard if the government considers the ineffective subsidies given

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elsewhere for fertilizers and such. Plans to reintroduce or reinforce social safety nets have
yet to be implemented.

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 CONCLUSION

India is on the path of development and will join the league of developed nation soon. Our
country needs absolute peace and harmony to achieve this goal in shortest possible time. Few
countries jealous of India fast paced development would like to throw spanner to halt its
progress. Unity in Diversity, which was our strength has become our weakness, both internal and
external enemies are ready to exploit our weakness. India as a nation is mature enough to learn
from its past mistakes which allowed British to rule for centuries on the basis of Divide and Rule
policy. Indians should not allow again to divided and fooled. Defeat of communalism will pave
way for India's all inclusive development leaving behind exclusive development.

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 Reference
 http://www.yourarticlelibrary.com/society/problems-of-communalism-in-india-
essay/4091/
 http://www.sacw.net/article2760.html
 www.jstor.org.