CHAPTER : 33

POVERTY
MEANING
 Poverty is a condition that exists when people lack adequate income and wealth to
sustain a basic standard of living.
 Poverty creates many social and economic problems, including poor health (such as
malnutrition and famine), deaths, crime, high unemployment etc.
 The United Nations defines poverty as ‘a lack of income and productive resources to
ensure sustainable livelihoods’.
This includes :
1. Hunger and malnutrition
2. Ill health and mortality from illness
3. Limited or lack of access to education and other basic services
4. Homelessness and inadequate housing
5. Unsafe environments
6. Social discrimination and exclusion.
 CATEGORIES OF POVERTY
 ABSOLUTE POVERTY
Absolute poverty exists when there is extreme outright poverty, that is income equal to or less than
$1.25 per day. People in absolute poverty are undeniable poor. Their income, if any, is entirely spent on
minimal amounts of food, clothing and shelter – that is, the basic human needs essential for survival.

Since 1995 UN has adopted the following definition of absolute poverty :

“ A condition characterized by severe deprivation of basic human needs, including food, safe drinking
water, sanitation facilities, health, shelter, education and information. It depends not only on income
but also on access to services”.

 RELATIVE POVERTY
Relative poverty is a comparative measure of poverty, referring to those who have a lower standard
of living in comparison to the average member of society.
Relative poverty measures the extent to which a person’s financial resources fall below the average
income for the country’s population.
CAUSES OF POVERTY
 UNEMPLOYMENT

 LOW WAGES

 ILLNESS

 AGE

 POOR HEALTHCARE

 LOW LITERACY RATE

 HIGH POPULATION GROWTH

 POOR INFRASTRUCTURE LOW FOREIGN DIRECT INVESTMENT

 HIGH PUBLIC DEBT

 RELIANCE ON PRIMARY SECTOR OUTPUT

 CORRUPTION AND INSTABILITY

POLICIES TO ALLEVIATE POVERTY AND
REDISTRIBUTE INCOME
 PROMOTING ECONOMIC GROWTH

 IMPROVING EDUCATION

 PROVIDING MORE GENEROUS STATE BENEFITS

 USING PROGRESSIVE TAXATION

 INTRODUCING (OR INCREASING) A NATIONAL MINIMUM WAGE

THANK YOU !