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POVERTY

Inability to fulfil minimum requirements of life like food,

shelter and clothing is called Poverty.

RELATIVE AND ABSOLUTE POVERTY

Relative Poverty - Poverty across different classes,

regions or countries is called Relative Poverty which is
interpreted in terms of inequality of income within the
country.
Absolute Poverty - Poverty line in India is used to
measure absolute poverty. Poverty line is the cut -
offprint that divides people of a region as poor and non -
poor. People spending ₹ 816 on consumption in rural
areas and ₹ 1,000 in urban areas per month are treated
above the poverty line.

Poverty Line Cut - Off should be determined in terms

of consumption not income because consumption reflects
the actual usage of goods and services by an individual
as income only shows the purchasing capacity.

Poverty line Fixed in India by:

 1. While estimating only private consumption
expenditure is considered.

2. Includes food and non - food items both and per

capita calorie consumption is taken
for consumption of food items.

3. Head count ratio shows poor and non - poor

separately for rural and urban areas.

4. Average calorie requirement for urban population is

2,045 and rural is 2,435.

TREND OF POVERTY IN INDIA, INTER - STATE

COMPARISON AND RURAL URBAN PICTURE

• About 17 crore people that is 34 per cent of total

population lived below poverty line during 1960 -
61. It declined to 21.9% in 2011 - 12.

• Percentage of population below poverty line in India

varies from state to state, highest is reported in UP,
Bihar, Odisha, Chhattisgarh, Jharkhand, Manipur,
Assam and Madhya Pradesh
 • Rural poverty edges our urban poverty although there
is a significant decline in both.

• With reference to Underdevelopment of Indian

Economy & Reference to Unequal Distribution of
Income.

CAUSES OF POVERTY

REFERENCE TO UNDERDEVELOPMENT OF
INDIAN ECONOMY:

1. Low Level of National Product (National

Income):

• Compared to the population size the national income

was very low and as a result per capita income was
low too.

1. Low Growth Rate:

• Growth rate of economy very low during Five Year

Plan in India because the growth rate of GDP was
low too as a result per capita income sustained
 poverty.

1. Heavy Pressure of Population:

• Due to population growth mainly due to fall in death

rate there was increase in demand of limited supply
leading to poverty.

1. Inflationary Spiral:

- It is a situation of consistent rise in prices. Due to this

the people who are just marginally above the poverty line
tend to fall below the poverty line.

1. Chronic Unemployment and Underemployment:

- Poverty is a reflection of unemployment in a country.
Unemployment and Underemployment directly lead to
poverty.

1. Capital Deficiency:

- Lack of capital meant low level of production capacity

which means low level of employment leading to
poverty.

1. VII. Lack of able and efficient entrepreneurs:

- To accelerate the GDP growth skilled and efficient
entrepreneurs are required which India lacks
and therefore India failed to tackle poverty.
1. VIII. Outdated Social Institutions:
- Certain outdated traditions and institutions hinder the
changes in the economy due to which the growth rate is
hampered and poverty prevails.

1. Lack of Infrastructure
Underdeveloped social and economical infrastructure
leads to slow pace of growth and poverty.

REFERENCE TO UNEQUAL DISTRIBUTION OF

INCOME

Poverty can also be explained with reference to unequal

distribution of income. This unequal distribution shows
not just the poverty but also is a reflection of widening
gap between the rich and the poor.

•Through GDP growth

• Through/ by improving the income distribution.

• Through population control

• Improving quality of life of the poor.

MEASURES TO REMOVE POVERTY

1. Through GDP Growth:

• Increase in GDP growth leads to new employment

opportunities and greater the employment, more the
inclusive growth meaning lesser poverty.

1. Distribution of Income through Fiscal and

Legislative measures:
FISCAL MEASURES - policy of taxation and subsidies
refers to fiscal measures.

• Higher tax on rich and tax exemption for poor.

• Subsidies to poor sections of society and capital

grants offered to poor for the construction of their
houses plus self - employment.

LEGISLATIVE MEASURES - refers to Minimum

Wages Act where employers have to mandatorily offer
minimum wage to employees. For example
‘Price Floor’ and ‘Right to Education’.

1. Through Population Control:

- Reducing the size of labour force that further will
correct the structural imbalance between labour supply
and capital stock.
1. Enhancing Quality of Life of Poor:

1. Development of Agriculture -
- Modernised and mechanised agriculture, financial
assistance to small farmers and land to landless farmers.

2. Stability in the Price Level and Effective Public

Distribution System -
• Prices to be stabilised when production of food

grains and other goods of mass production is

increased and when these are distributed to the poor
 through fair price shops.

• Food grains and coarse cloth to be provided at

subsidised rate under direct government
supervision.
3. Eradication of Unemployment and Opportunities
of Self Employment -
- Vocalisation of education and establishment of small -
scale industries to eradicate unemployment and generate
self employment.
Labour Intensive techniques of production - to reduce
the level of poverty by generating the demand of labour.

5. Focus on Backward regions - concessions for

backwards regions to encourage private investment.

POVERTY ALLEVIATION PROGRAMMES

YOJANAS AIMS/OBJECT WAYS TO LAUNCH
IVES ACHIEVE ED
SWARANAJAY To remove Through April,
ANTI GRAM poverty from the 1999
SWAROZGAR rural areas. establishme
YOJANA nt of small
enterprises
both on
individual
and
collective
basis like
Self - Help
Groups.
SAMPOORNA To provide Has a target 1
GRAMIN employment of creating September
ROZGAR opportunities to 100 crore , 2001
YOJANA surplus workers man days
and for labour.
development of
infrastructure.
PRADHAN To improve Pradhan 2001
MANTRI standard of Mantri
GRAMODYA living by Gram
YOJANA focusing on Sadak
Housing, Roads, Yojana,
Health, Primary Pradhan
Education and Mantri
Drinking water. Gramin
Awas
Yojana,
Pradhan
Mantri
Gramin
Drinking
Water
Yojana.
SWARNA Provide self - Urban Self I
JAYANTI employment, - December
SHAHRI wage Employme , 1997
ROZGAR employment to nt
YOJANA urban under and Programme
unemployed. Urban
Wage
Employme
nt
Programme
MINIMUM To raise the Primary During
NEEDS standard of level education, Fifth Plan
PROGRAMME of living of the adult
poor and quality education,
of life of poorer rural health,
sections of rural water
society. supply,
rural roads
housing,
electrificati
on and
ecological
improveme
nt of urban
slums.

MAHATMA Provide Employme 2006

GANDHI employment nt seekers
NATIONAL to people can report
RURAL willing to work to rural
EMPLOYMENT at given areas where
GUARANTEE minimum wage it is
ACT for minimum launched.
(MGNREGA) period of 100
days.
MICRO UNITS To meet credit A loan April,
DEVELOPMEN needs of micro entitled 2015
T REFINANCE enterprises and for ₹10
AGENCY self - employed lakh per
BANK (MUDRA reasons. unit
BANK)

ASSESSMENT OF POVERTY ALLEVIATION

PROGRAMMES

1. Failed to achieve the targets.

2. No
supervision from government to ensure judicious
and effective working of programmes.

3. Remote areas and poor households neglected.

4. Thedelivery mechanism was controlled b y the

power groups therefore large - scale leakage as a
result the poor received only a fragment of aid.