 Introduction and Meaning and Definition

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.

The word poverty comes from French word “poverté” which means poor.

It is complex to define poverty. Because it is depend on multifaceted and multidimensional elements like
region, era, geographical condition, circumstances and many more.

According to World Bank, Poverty is pronounced deprivation in well-being, and comprises many
dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary
for survival with dignity. Poverty also encompasses low levels of health and education, poor access to
clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and
opportunity to better one's life.

In India, 21.9% of the population lives below the national poverty line in 2011.

In 2018, almost 8% of the world’s workers and their families lived on less than US$1.90 per person per
day (international poverty line).

 Types of Poverty:

On the basis of social, economical and political aspects, there are different ways to identify the type of
Poverty:

1. Absolute poverty.

2. Relative Poverty.

3. Situational Poverty.

4. Generational Poverty.

5. Rural Poverty.

6. Urban Poverty.

Now let us understand them one by one:

1. Absolute poverty:
Also known as extreme poverty or abject poverty, it involves the scarcity of basic food, clean water,
health, shelter, education and information. Those who belong to 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. Absolute Poverty is usually uncommon in developed countries.

It was first introduced in 1990, the “dollar a day” poverty line measured absolute poverty by the
standards of the world's poorest countries. In October 2015, the World Bank reset it to $1.90 a day. This
number is controversial; therefore each nation has its own threshold for absolute poverty line.

"It is a condition so limited by malnutrition, illiteracy, disease, squalid surroundings, high infant
mortality, and low life expectancy as to be beneath any reasonable definition of human decency." Said
by Robert McNamara, the former president of the World Bank

2. Relative Poverty:

It is defined from the social perspective that is living standard compared to the economic standards of
population living in surroundings. Hence it is a measure of income inequality. 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.

Usually, relative poverty is measured as the percentage of the population with income less than some
fixed proportion of median income.

It is a widely used measure to ascertain poverty rates in wealthy developed nations.

In European Union the "relative poverty measure is the most prominent and most–quoted of the EU
social inclusion indicators"

3. Situational Poverty:
It is a temporary type of poverty based on occurrence of an adverse event like environmental disaster,
job loss and severe health problem.

People can help themselves even with a small assistance, as the poverty comes because of unfortunate
event.

4. Generational Poverty:

It is handed over to individual and families from one generation to the one. This is more complicated as
there is no escape because the people are trapped in its cause and unable to access the tools required
to get out of it.

“Occurs in families where at least two generations have been born into poverty. Families living in this
type of poverty are not equipped with the tools to move out of their situation” (Jensen, 2009).

5. Rural Poverty: It occurs in rural areas with population below 50,000. It is the area where there are
less job opportunities, less access to services, less support for disabilities and quality education
opportunities. People are tending to live mostly on the farming and other menial work available to the
surroundings.

The rural poverty rate is growing and has exceeded the urban rate every year since data collection
began in the 1960s. The difference between the two poverty rates has averaged about 5 percent for the
last 30 years, with urban rates near 10–15 percent and rural rates near 15–20 percent (Jolliffe, 2004).

6. Urban Poverty: It occurs in the metropolitan areas with population over 50,000. These are some
major challenges faced by the Urban Poor:

• Limited access to health and education.

• Inadequate housing and services.

• Violent and unhealthy environment because of overcrowding.

• Little or no social protection mechanism.

Note: “Extreme global poverty could be eliminated by 2025 if the wealthy countries of the world were
to increase their combined foreign aid budgets to between $135 billion and $195 billion from 2005 to
2015. In 2004, 1.1 billion people lived in extreme poverty on less than a dollar a day”. Book by Jeffrey
Sachs “The End of Poverty”

Poverty Estimation in India

Poverty estimation in India is carried out by NITI Aayog’s task force through the calculation of poverty
line based on the data captured by the National Sample Survey Office under the Ministry of Statistics
and Programme Implementation (MOSPI).

Poverty line estimation in India is based on the consumption expenditure and not on the income levels.

Poverty is measured based on consumer expenditure surveys of the National Sample Survey
Organisation. A poor household is defined as one with an expenditure level below a specific poverty line.

The incidence of poverty is measured by the poverty ratio, which is the ratio of the number of poor to
the total population expressed as a percentage. It is also known as head-count ratio.

Alagh Committee (1979) determined a poverty line based on a minimum daily requirement of 2400 and
2100 calories for an adult in Rural and Urban area respectively.

Subsequently different committees; Lakdawala Committee (1993), Tendulkar Committee (2009),

Rangarajan committee (2012) did the poverty estimation.

As per the Rangarajan committee report (2014), the poverty line is estimated as Monthly Per Capita
Expenditure of Rs. 1407 in urban areas and Rs. 972 in rural areas.

 Causes of Poverty in India:

1. Population Explosion:

India’s population has steadily increased through the years. During the past 45 years, it has risen at a
rate of 2.2% per year, which means, on average, about 17 million people are added to the country’s
population each year. This also increases the demand for consumption goods tremendously.

2. Low Agricultural Productivity:

A major reason for poverty in the low productivity in the agriculture sector. The reason for low
productivity is manifold. Chiefly, it is because of fragmented and subdivided land holdings, lack of
capital, illiteracy about new technologies in farming, the use of traditional methods of cultivation,
wastage during storage, etc.

3. Inefficient Resource utilisation:

There is underemployment and disguised unemployment in the country, particularly in the farming
sector. This has resulted in low agricultural output and also led to a dip in the standard of living.

4. Low Rate of Economic Development:

Economic development has been low in India especially in the first 40 years of independence before the
LPG reforms in 1991.

5. Price Rise:

Price rise has been steady in the country and this has added to the burden the poor carry. Although a
few people have benefited from this, the lower income groups have suffered because of it, and are not
even able to satisfy their basic minimum wants.

6. Unemployment:

Unemployment is another factor causing poverty in India. The ever-increasing population has led to a
higher number of job-seekers. However, there is not enough expansion in opportunities to match this
demand for jobs.

7. Lack of Capital and Entrepreneurship:

The shortage of capital and entrepreneurship results in low level of investment and job creation in the
economy.

8. Social Factors:

Apart from economic factors, there are also social factors hindering the eradication of poverty in India.
Some of the hindrances in this regard are the laws of inheritance, caste system, certain traditions, etc.

9. Colonial Exploitation:

The British colonisation and rule over India for about two centuries de-industrialised india by ruining its
traditional handicrafts and textile industries. Colonial Policies transformed india to a mere raw-material
producer for european industries.

10. Climatic Factors:

Most of india’s poor belong to the states of Bihar, UP, MP, Chhattisgarh, odisha, Jharkhand, etc. Natural
calamities such as frequent floods, disasters, earthquake and cyclone cause heavy damage to agriculture
in these states.

 Poverty Alleviation Programs in India:

1. Integrated Rural Development Programme (IRDP):

It was introduced in 1978-79 and universalized from 2nd October, 1980, aimed at providing assistance to
the rural poor in the form of subsidy and bank credit for productive employment opportunities through
successive plan periods.

2. Jawahar Rozgar Yojana/Jawahar Gram Samridhi Yojana:

The JRY was meant to generate meaningful employment opportunities for the unemployed and
underemployed in rural areas through the creation of economic infrastructure and community and
social assets.

3. Rural Housing – Indira Awaas Yojana:

The Indira Awaas Yojana (LAY) programme aims at providing free housing to Below Poverty Line (BPL)
families in rural areas and main targets would be the households of SC/STs.

4. Food for Work Programme:

It aims at enhancing food security through wage employment. Food grains are supplied to states free of
cost, however, the supply of food grains from the Food Corporation of India (FCI) godowns has been
slow.

5. National Old Age Pension Scheme (NOAPS):

This pension is given by the central government. The job of implementation of this scheme in states and
union territories is given to panchayats and municipalities. The states contribution may vary depending
on the state. The amount of old age pension is ₹200 per month for applicants aged 60–79. For applicants
aged above 80 years, the amount has been revised to ₹500 a month according to the 2011–2012
Budget. It is a successful venture.

6. Annapurna Scheme:

This scheme was started by the government in 1999–2000 to provide food to senior citizens who cannot
take care of themselves and are not under the National Old Age Pension Scheme (NOAPS), and who
have no one to take care of them in their village. This scheme would provide 10 kg of free food grains a
month for the eligible senior citizens. They mostly target groups of ‘poorest of the poor’ and ‘indigent
senior citizens’.

7. Sampoorna Gramin Rozgar Yojana (SGRY):

The main objective of the scheme continues to be the generation of wage employment, creation of
durable economic infrastructure in rural areas and provision of food and nutrition security for the poor.

8. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005:

The Act provides 100 days assured employment every year to every rural household. One-third of the
proposed jobs would be reserved for women. The central government will also establish National
Employment Guarantee Funds. Similarly, state governments will establish State Employment Guarantee
Funds for implementation of the scheme. Under the programme, if an applicant is not provided
employment within 15 days s/he will be entitled to a daily unemployment allowance.

9. National Rural Livelihood Mission:

Aajeevika (2011): It evolves out the need to diversify the needs of the rural poor and provide them jobs
with regular income on a monthly basis. Self Help groups are formed at the village level to help the
needy.

10. National Urban Livelihood Mission:

The NULM focuses on organizing urban poor in Self Help Groups, creating opportunities for skill
development leading to market-based employment and helping them to set up self-employment
ventures by ensuring easy access to credit.

11. Pradhan Mantri Kaushal Vikas Yojana:

It will focus on fresh entrant to the labour market, especially labour market and class X and XII dropouts.

12. Pradhan Mantri Jan Dhan Yojana:

It aimed at direct benefit transfer of subsidy, pension, insurance etc. and attained the target of opening
1.5 crore bank accounts. The scheme particularly targets the unbanked poor.

 Conclusion
The Global Multidimensional Poverty Index-2018 released by the UN noted that 271 million people
moved out of poverty between 2005-06 and 2015-16 in India. The poverty rate in the country has nearly
halved, falling from 55% to 28% over the ten-year period. Still a big part of the population in india is
living Below the Poverty Line.

Rapid economic growth and the use of technology for social sector programs have helped make a
significant dent in extreme poverty in the country.

Despite rapid growth and development, an unacceptably high proportion of our population continues to
suffer from severe and multidimensional deprivation. Thus, a more comprehensive and inclusive
approach is required to eradicate poverty in India