POVERTY - ppt.14 2

POVERTY AND DEVELOPMENT
Prof. Hanumant Yadav

Hidayatullah National Law University, Raipur.
Prof. H. Yadav, LPD 1

INDEX
 POVERTY : Meaning 10 - 13
 Poverty in India 14 -

Unemployment
 Unemployment is a condition where persons
are seeking job to work on remuneration but
they are not getting it looking to their
qualification.
 Thus Unemployment is Deprivation of
Employment or denial of employment
opportunities.
 .

UNEMPLOYMENT in india
 In 2012, the total number of
unemployed persons was 44.79 million
persons. They constituted 9.4 % of
manpower.
 Causes of Unemployment in India:
1. Population explosion
2. Slow rate of economic growth
3. Backwardness of agriculture
Poverty
Prevailing education system
Lack of proper manpower of planning

Employment programmes
 Realizing that poverty is major cause of
poverty, employment generation
schemes were launched.
 National rural Employment Program
 PMRY for urban areas
 Jawahar Rozgar Yojna ( job to one
member of BPL family at least for 50 to
100 days in the year.)
Law, Poverty and
Development
 The objective of this course paper is to impart
in depth knowledge of poverty and
development to the students to make them
more enlightened, sensitive and action-
oriented to the problems of Poverty and
Development.
 This course paper discusses the rules and
regulations pertaining to provision of social
and economic justice to different categories
of poor classes and development measures
framed and enforced by the State.

POVERTY : Meaning
 Poverty can be defined as a social
phenomenon in which a section of the society
is unable to fulfill its basic needs of life.
 Poverty is a condition in which a person or
community lacks the essentials for a
minimum standard of well-being and life.
These essentials are material resources such
as food, safe drinking water, clothing and
shelter, or they may be social resources such
as access to health care, information and
education.

Poverty : Meaning
 Poverty is a state of social condition when a
large segment of society is deprived of the
minimum level of living.
 Poverty is collective condition of poor people.
 Poverty is lack of regular income to maintain
minimum level of living.
 Consumption of less food than is required to
sustain a human body is known as condition
of extreme poverty.
 Poverty is condition of lack of income and
wealth.
Other terms used to indicate
poverty
 impoverishment - the state of having
little or no money and few or no material
possessions
 Poverty is indicated by Poor economic or
financial condition of people.
Poverty Ratio
 Poverty Ratio indicates ratio of poor
population to total population expressed
in terms of percent.
Poverty Line
 The poverty line, is the minimum level of
income deemed necessary to achieve an
adequate standard of living.
 Determining the poverty line is usually done
by finding the total cost of all the essential
items/ resources that an average human
adult consumes in one year.
 This approach is needs-based in the sense
that an assessment is made of the minimum
expenditure needed to maintain a tolerable
life
POVERTY LINE IN INDIA
 Poverty line measures the Incidence of poverty.
 In India, per day calorie Intake has been taken as
base for poverty line.
 2400 calorie in rural areas and 2100 calorie intake in
urban areas are required to sustain human body of
an adult male.
 Those adults who are continuously deprived of 2400
calorie intake in rural areas and 2100 calorie in urban
areas are treated as poor.
 21.9 % of Indian population was living below
poverty line in 2012.

Poverty Line in India
 In India, the prevailing prices of 1973-74
have been taken as base for determing the
Poverty Line.
 The poverty line represented monthly
income required for per capita expenditure
of Rs. 49.00 for rural areas and Rs. 54.00
for urban areas in 1973-74.
 For the year 2004-05, Poverty line
represented per capita monthly income of
Rs. 356.35 for rural areas and Rs. 538.60 in
urban areas. Persons below this income
were treated as persons living below poverty
line . Prof. H. Yadav, LPD 14
India : Persons below Poverty
Line
 The Planning Commission, which is the nodal

official agency for poverty estimation, has
estimated that 27.5% of the rural population
was living below the poverty line in 2004–2005,
 down from 51.3% in 1977–1978,
 and 36% in 1993-1994
 75% of the poor are in rural areas with most of
them comprising daily wagers, self-employed
households and landless labourers
 -----------------------------------------------------------
-[Source : 61st round of the National Sample Survey (NSS)]
Rural Poverty in India
Year Persons living below poverty line
--------------------------------------------------------------
1950-51 47 %
1960-61 45 %
1977-78 51 %
1987-88 39 %
2004-05 27 %
According to Prof. Dandekar and Rath, the
urban poor are only an overflow of the rural
poor, into the urban area.
World Bank Estimates of Poverty
 The World Bank defines
 Extreme poverty as living on less than
US$ (PPP) 1 per day,
 Moderate poverty as less than $2 a day.
 It has been estimated that in 2001,
A) 1.1 billion people had consumption levels
below $1 a day and
B) 2.7 billion lived on less than $2 a day.
PPP = Purchase Power Parity
 Exchange rates are determined in
such a way that the prices of
goods in different countries are
the same when measured in the
same currency.

Magnitude of World poverty
 One third of deaths - some 18 million people a
year or 50,000 per day - are due to poverty-
related causes. That's 270 million people during
1990-2005, the majority women and children.
 Every year nearly 11 million children die before
their fifth birthday.
 In 2001, 1.1 billion people had consumption
levels below $1 a day and 2.7 billion lived on less
than $2 a day
 800 million people go to bed hungry every day.

Social Poverty
 Denial of opportunity to socially
backward people, i.e., Scheduled
castes, scheduled castes and other very
backward classes,

Absolute and Relative Poverty
 Absolute Poverty : Absolute poverty
indicates incidence of poverty i.e.
total number of poor people or
percentage of poor people to total
population.
Absolute poverty is measured by
poverty line and poverty ratio.

Relative Poverty
 Relative poverty : Different concepts and
methods have been used to denote and
measure relative poverty.
 One of the measure is estimate the distance
of actual distribution of income and wealth
from equal distribution of income and wealth.
Lorenze curve and Gini-coefficients are tools
used to measure the magnitude of relative
poverty.
Relative poverty
 Another concept of relative poverty is
distance mean income of upper income
strata ( upper 10 % or 20 % ) with the
mean income of lower strata ( 10 % or
20 %). Gini coefficient is used to
measure this type of relative poverty.
High Gini-coefficient indicates large
disparity of income and low coefficient
indicates low disparity.

Absolute and Relative poverty
 Generally income of person or
family is taken into account while
estimating Absolute poverty
whereas both income and wealth
are taken into account for relative
disparity.

Multidimensional Poverty
Index
 The Multidimensional Poverty
Index (MPI) was developed in 2010
by Oxford Poverty & Human Development
Initiative and the United Nations
Development Programme[1] and uses
different factors to determine poverty beyond
income-based lists.
 It shows the number of people who are
multidimensionally poor
Multi Dimensiaonal Poverty
Index
 The following ten indicators are used to
calculate the MPI
 Education (each indicator is weighted equally
at 1/6)
1. Years of schooling: deprived if no household
member has completed five years of schooling
2. Child school attendance: deprived if any
school-aged child is not attending school up
to class 8

MPI
 Health (each indicator is weighted
equally at 1/6)
3. Child mortality: deprived if any child
has died in the family
4. Nutrition: deprived if any adult or child
for whom there is nutritional
information is malnourished

MPI
 Standard of Living (each indicator is weighted
equally at 1/18)
5. Electricity: deprived if the household has no electricity
6. Sanitation: deprived if the household’s sanitation
facility is not improved (according to MDG guidelines),
or it is improved but shared with other households
7. Drinking water: deprived if the household does not
have access to safe drinking water (according to MDG
guidelines) or safe drinking water is more than a 30-
minute walk from home roundtrip

MPI
8. Floor: deprived if the household has a dirt,
sand or dung floor
9. Cooking fuel: deprived if the household cooks
with dung, wood or charcoal.
10. Assets ownership: deprived if the household
does not own more than one radio, TV,
telephone, bike, motorbike or refrigerator and
does not own a car or truck

Starvation line
 Boyd-Orr, DG of FAO was the first person to
propound the notion of starvation line in 1945
which referred to the consumption of less
than 2300 calories per person per day.
 The idea of starvation line has been
transformed by the economist into the
poverty line.
 P.D. Ojha was the first economist in India to
estimate the extent of poverty in terms of per
capita per day expenditure.
Causes of Poverty in India
1. Unemployment ( underutilization of
manpower ) :
2. Capital deficiency : ( Low domestic
savings, Low domestic investment )
3. High growth of population
4. Social structure : Tribes, castes, rural
artisans, landless labourers,
5. Low economic growth

Causes of poverty
6. Low level of production (Low Per Capita
Income )
7. Low productivity
8. Lack of natural resources
9. Lack of skill
10. Low technology
11. Lack of entrepreneurship

Remedial measures by Govt.
 Economic measures
1. Economic Planning: Preparation of five
year plans, fixing targets and
implementation of schemes.
2. Community development blocks and
extension services (Agriculture, Panchayat,
Cooperation, Animal husbandry, PWD,
Irrigation, Education, Health, Women &
child welfare, )
Poverty Removal programmes
3. Welfare schemes for ST and SC
( Job reservations, Input Subsidies,
Scholarships, other reservations)
4. Land reforms : abolition of
zamindari system. land ceiling act,
distribution of surplus land to landless
persons, tenancy reforms,

5. Agriculture development schemes:
Irrigation, New HYV technology, (seeds,
fertilizers ad mechanization), Minimum
support price for produce,
6. Special development programmes, namely SFDA,
MFAL, DPAP, Food for work programme
7. 20 pt. Programme bonded labour,
untouchability, civil rights, (1975)

8. Poverty removal programmes
9. Rural employment programmes, NREP, JRY,
IRDP, SJGSY, SGRY, JRY,
10. Public Distribution system
11. Universal literacy programme
12. Development of backward areas
programme
13. Skill Development programmes

Legal measures
 Constitutional provisions
Ordinances/Acts, Statutes,
 Law : Acts by Parliament
 Rules and regulations passed by the

Legislative assembly
 Orders

Complexities in Measurement
of Poverty
 Estimation or measurement of poverty
is not easy. Due care is required
particularly by those who are using
secondary source of information about
the concept and methodologies used by
the researcher or Institution

of Poverty
Individual or household measures:
The findings of majority of studies
are based on survey of household level
income or consumption. Needs and
Deprivation varies among individual
members of families, male, female,
children, aged persons, aged persons,
handicapped person
of Poverty
2. Private consumption only usually
included in estimation while private
consumption with publicly provided
Complexities in Measurement of Poverty
goods should be included in the studies
adopting Consumption approach.
Goods and services supplied by Govt.
and charitable institution to be included
or not.

of Poverty
 Monetary or monetary plus non-
monetary components of poverty :
In Income approach measurement of
poverty non-monetary goods and
services are often ignored.

of Poverty
 Income or Consumption single
approach : The Income may be higher
but actual consumption may be very
low. Or income may be low
consumption level may be high.faulty.

of Poverty
 Absolute or Relative poverty:
Relative poverty in comparison to other
income group, societies or country.
Customs, food habits, climatic, regional
factors influence the needs of people.

of Poverty
 Income approach : ( Often Wealth
factor is ignored ) : As a matter of fact
wealth is main criteria denoting richness
or poverty. Level of living of an
unemployed person belonging to rich
family may be very high.

Poverty Gap
 Poverty Gap is the difference between the
per capita consumption of poor and the
poverty line.
 Poverty Gap = E (Rs. 356 – X1..n)/n
 Poverty Gap Index (PGI) measures the
Poverty Gap.
 Poverty Gap Index = E(Rs. 356 – X1 ..n) x 100
n
E = sigma or sum of
Squared Poverty Gap
 Squared poverty Gap (SPGI) : It is
composed of Poverty Gap ratio and
consumption and distribution of poor as
measured by the coefficient of
variation.
 SPGI = underroot of sum of (356 – Xn)
squared deviations divided by number and
multiplied by 100.

Squared Poverty Gap
 No. Poverty line Consumption dev squared
Rs. 400 x y d d2
----------------------------------------------------------------
1 400 350 50 2500
2 400 300 100 10000
3 400 370 30 900
4 400 250 150 22500
5 400 320 80 6400
----------------------------------------------------------------
2000 1590 410 42300
Human Poverty
 Human poverty denotes as “ Deprivation of
basic human needs in terms of food, shelter,
education, health facilities.
 The denial of opportunity and choices are
causes of human poverty.
 Human Poverty Index is a composite Index
which measures three elements of human life
: 1) Longevity 2) knowledge and 3) access to
basic needs :
Survival Deprivation Index
 Longevity is measured in terms of life
expectancy at the age of 40 or number
of persons surviving at the age of 40
years).
( Survival deprivation means that these
persons are not surviving after age of
40.

Deprivation of Education /
Knowledge Index
1. Low Adult literacy Rate
2. Number of children not enrolled or not
in the school of age-group 7-14

Deprivation of Economic
Provisioning
 Deprivation of basic human needs

1. % of Population no access to safe
drinking water
2. % of population without access to
primary health services
3. % of Underweight children be low 5
years
Low Per Capita GNP/GNI
 Poor Countries
 Low Income countries
 Developing ( Presently low income but
rate of growth is consistently 5 % or
more ) / Lower-middle income more
than $US 875.
 Under developed countries = Low
income countries
Human Poverty Index in India
Deprivation Value
---------------------------------------------------------
( Life expectancy at age of 40 ) % 16
2. Deprivation of Education and knowledge
Adult Literacy rate % 1995 48
3. Deprivation in safe water, health
Services, provisioning & nutrition to child 29
Human Poverty Index Value 35.9
Human Development Report 1998
1. Survival deprivation 1995

Indicators of Poverty
Poor Countries/Under-developed
countries
1. Low per Capita GNP / GNI
-----------------------------------------------------------------------------------------------------
Country Per Capita GNP US$
--------------------------------------------------------------
I - Low Income $ 875 or less
2- Lower Middle Income $ 876 - 3465
3- Upper Middle Income $ 3466 - 10725
4- High Income $ 10726 & above
--------------------------------------------------------------
--------------------------------------

Per Capita National Income
US$ ( 1996-97 prices)
 GNI (per capita US$)
 World (Average ) US$ 6987
 USA US$ 43740
 European Union US $ 31914
 China US $ 1740
 India US $ 720

Indicators of Poverty
Significant size of Population below
Poverty line
3. Over-dependency on Agriculture
sector
A) Disguised Unemployment
B) Zero Marginal Productivity
4. Heavy Population pressure
5. Low Rate of Capital Formation
6. Inequality of Income and
Wealth
7. Underutilization of Resources
8. Lack of Entrepreneurship
9. Export of Raw material and
Minerals
Indicators of poverty
10. Technological backwardness
11. Poor Infrastructure
a) Poor Transport and Communication
facilities
b) Poor Banking facilities
c) Poor Technological and Professional
Education and Training Facilities
Non-economic factors
1. Low Life Expectancy
2. High Infant Mortality Rate
3. High Mother Mortality Rate
4. High Rate Illiteracy
particularly among female

5. Traditional Outlook
6. Casteism and Regionalism
7. Low status of women

Multi-dimensional Poverty
Index (MPI)
 Multi-dimensional Poverty Index (MPI) was
constructed by Oxford Poverty and Human
Development (OPHD) United Nations
Development Program (UNDP) 2011 Human
Development Report.
 MPI has three dimensions ( Living Standards,
Education and Health ) and 10 indicators,

Poverty
 “ Poverty is human condition, It is
despair, grief and pain.”
Lester Brown, World without borders, 1972.

Statewise population below
poverty line - (Poorest States)
. State & of population
below poverty line
All India 21.9 %
Chhattisgarh 39.9
Jharkhand 36.9
Bihar 33.7
Odisha 32.6
Assam 32.0

Population living below poverty
line – Important States
States & of population below
poverty line
India 21.9
Madhya Pradesh 31.6
Uttar Pradesh 29.4
Karnataka 20.9
West Bengal 20.0
Maharashtra 17.3

States with Low % of
Poverty - 2012
.. States & of population
below poverty line
Punjab 5.2
Kerala 7.0
Andhra Pradesh 9.2
Haryana 11.2
Tamilnadu 11.3
Rajasthan 14.7

Rangarajan Committee
Poverty Line: Rural Area Rs. 32 per day
Urban Area : Rs. 47 per day
29.5 % of Indian population is living

below povery line.

Complexity in Measurement of
poverty

poverty

poverty

poverty

poverty

poverty

National Social Assistance
programme
 NSAP Launched on 15th Aug. 1995 for
providing assistance to families below
the poverty line.
1. National Old Age Pension Scheme
(NOAPS) : Pension of Rs. 75 per
month to destitute and to persons
above 65 years of age living below
poverty line.
National Social Development
programmes
2. National Family Benefit Scheme (NBFS) :
Assistance of Rs. 10,000 in lump sum in case of
accidental death and Rs, 5000 in case of natural
death of bread winner living below poverty line to
the survivor.
3. National Maternity Benefit Scheme (NMBS)
Maternity benefit of Rs. 300/- for expectant
mothers per pregnancy upto first two live births.

Pradhan Mantri Gramodaya
Yojna (PMGY
To eradicate human poverty PMGY was Launched in
the year 2000-01 nation wide for sustainable
human development at the village level.
Per annum budget allotment : ,Rs. 2800 crore.
There are six components of this Yojna:
1. Primary Health
2. Primary Education
3. Gramin Awas ( Rural Shelter)
4. Rural Drinking Water Project
5. Nutrition
6. Rural Electrification

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POVERTY AND DEVELOPMENT

Prof. Hanumant Yadav

Prof. H. Yadav, LPD 1

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 The Planning Commission, which is the nodal

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 Rules and regulations passed by the

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 Deprivation of basic human needs

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9. Export of Raw material and

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Madhya Pradesh 31.6

Uttar Pradesh 29.4

West Bengal 20.0

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Andhra Pradesh 9.2

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29.5 % of Indian population is living

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