1. Concept of Poverty


Mollie Orshansky, the developer of poverty measurements that are in use by the US government, says ‘to be poor is to be deprived of those goods and services and pleasures which others around us take for granted.’


A socio-economic malady, poverty is one of the worst challenges facing India today. Poverty not only refers to an absence of necessities of material well-being, but also the denial of opportunities for living a tolerable life and enjoying a decent standard
of living, freedom, dignity, self-respect and respect for others. There are two types of poverty. One is income poverty and the other is human poverty. Income poverty refers to the lack of necessities of material well-being. Human poverty refers to the denial of opportunity for living a tolerable life.


The definition of poverty is varied for most countries. Poverty in India has been
referred to as that situation in which a person is unable to earn adequate income to buy the minimal means of subsistence. These include a satisfactory level of nutritional diet, minimum required clothing, housing and minimum level of health facilities such as clean water and so on. Poverty can be classified into two categories: absolute poverty and relative poverty.


(i) Absolute poverty: Less prevalent in developed countries, absolute poverty is a state in which people do not have the minimum level of income deemed necessary for living in a civilized society. Absolute poverty refers to the percentage of populace living below the poverty line.


(ii) Relative poverty: Relative poverty refers to the phenomenon when the income for consumption expenditure of a section of the society is distinctively below the average income level of the society. Relative poverty indicates that a group or class of people belonging to lower income group is poorer when compared to those belonging to higher income group. Since income is distributed unequally in almost all the countries–whether developed or undeveloped–relative poverty exists
in every country.


2. The Meaning of Poverty Line


Poverty line is a level of personal income defining the state of poverty. This concept is very frequently used by economists to measure the extent of poverty in a country. In order to find out the extent of poverty and measure the number of poor people in the
country, the economists use the concept of poverty line. Poverty line has been defined as a level of personal or family income below which one is classified as poor according to governmental standards. Poverty line can be identified through the following steps:

Poverty line is identified in terms of a minimum nutritional level of food energy
required for subsistence. This minimum nutritional level of food energy is expressed in terms of minimum daily intake of calories. The Planning Commission of India has defined the poverty line in terms of nutritional requirement of 2,400 calories per person per day for rural areas and 2,100 calories per person per day in the
urban areas.

Poverty line is also identified in terms of per capita consumption expenditure
required to get minimum calorie intake.

Thus, poverty line is set at the level of
consumption expenditure per person required for the minimum calorie intake. The percentages of populace which falls below poverty line are identified as the underprivileged. Head Count Ratio calculates the extent of poverty in India. This method
measures the number of poor as the proportion of people living below poverty line.


3. Causes of Poverty

There are several factors responsible for poverty in India. Some of them are discussed as follows:

Growth of population: One of the major problems of poverty in India is the high growth rate of population, especially among the poor. This is because of their strong belief in traditions, illiteracy and also their preference for the male child, which results in an increase in population. With limited income and numerous mouths to feed, people are unable to make ends meet.

Low rate of economic development: The low rate of economic development
is another major cause of poverty. The rate of economic development in India has been below the required levels. This means that we have low per capita income that results in a low standard of living. Population in India has recorded an increase of average rate of over 2 per cent during the plan period. The employment opportunities increase slowly because of low growth rate in the economy. This has kept the poor families in a state of constant poverty.

Unemployment: The unemployment rate in India was 9.9 per cent in 2012. With a large number of people being unemployed, India is facing the twin challenges of unemployment and underemployment. There are less job opportunities compared to the number of job seekers. Though efforts have been made to promote small and cottage industries to generate employment, even these industries could not
absorb sufficient workforce so as to reduce poverty. Thus, unemployment
intensifies the problem of poverty to a massive degree.

Lack of education: The growth of population has long been associated with the lack of education. Since the poor have limited access to education, they usually end up with low-paid jobs. This in turn, results in low income. Since most underprivileged people are illiterate, they think that the more the number of members in the family, the more it will help them in acquiring wealth.

Inflationary pressure: The constant rise in price has only made things more
difficult for the poor people. Inflation has reduced the real income of fixed and low-income earners. As a result, there is a marked decline in the purchasing power of the poor. Thus, the poor cannot avoid a decline in their living standards.

Socio-cultural factors: The socio-cultural set-up of the country also contributes to poverty to a large extent. Usually, people belonging to lower castes and tribal groups comprise the poor. Illiteracy and limited chances of mobility perpetuate poverty. Factors such as the prevalence of casteism, existence of joint family system, communal hatred and inheritance laws have proven to be an obstacle for
economic development.

Growth strategy: The various strategies designed in the government plans have not been implemented properly. Some are yet to be developed. In fact, the growth strategy has kept the poor out of the development process. Prof. H. Meghnad Desai points out, ‘India’s poverty creating programme is larger than its poverty removal programme.’

Inequalities in income: The inequality of income in rural and urban areas of the country is another cause of poverty. During the plan period, a large proportion of increased income has been cornered by the affluent ones. Due to inequalities in the distribution of income and assets, even a small rise in per capita income could not affect the poor. Hence, the problem of poverty has become acute.

Inadequate anti-poverty measures: In view of the large magnitude of the
problem of poverty in the country, the anti-poverty measures taken by the
government are far from adequate. Some of them have been implemented half-heartedly and the ones, which have been implemented, have benefited only selected sections of the populace. Despite the implementation of measures, success in alleviating poverty has been limited.

Capital deficiency: Capital formation directly contributes to economic growth
by reducing poverty. There is a dearth of capital in India which results in low
productivity, low per capita income and the end result happens to be poverty. As
in all developing countries, the credit market in India does not function well. Those who can offer collateral go to formal markets, while those who cannot have to resort to informal credit markets where the interest rate on loan is quite high.

 Globalization: Globalization has resulted in pushing many householders to reduced circumstances. In the wake of globalization, farmers began to utilize their lands for the production of export crops, thereby bringing down the production of important food crops. Liberalization has also forced small farmers to compete in a global market where the prices of agricultural goods are low.

Political factors: The political structure of the country is also one of the factors accounting for the continuation of poverty. Political power is concentrated in the hands of the upper strata of the society, both in the urban and rural areas. Economic
policies are formulated to promote the interest of the richer section of the society. Poor people, particularly peasants, landless labourers, tribal people and slum dwellers suffer in the process.

Discrimination: The poor are often discriminated against in social institutions. They cannot avail of education, healthcare and other opportunities as freely as
other social classes.

Prejudices: The society is prejudiced against the poor. They are seen as unhygienic and lacking integrity.

Casteism: Many poor people also belong to the historically oppressed castes. Thus, they are relegated to the fringes of the society, especially in areas and regions where casteism is prevalent.

Communalism: Communal hatred and feelings can result in the oppression and victimization of the poor.

Parochialism: Provincial attitudes hamper the growth, progress and development of the poor people.


4. Government Policies and Programmes to Eradicate Poverty


The problem of poverty–a multidimensional challenge for India–needs to be addressed
seriously. Poverty alleviation and improvement in the standard of living of the masses has been one of the most important objectives of planning in India. However, the emphasis that is laid on the objective of poverty alleviation and strategy to achieve this objective has changed over the years. The measures which have been adopted by the government for the removal of poverty are as follows:

Economic growth: Economic growth can be helpful in removing poverty because of the trickle-down effect. It was thought that the benefits of economic growth would trickle down to the underprivileged in the form of more employment and more income because of the expansion of agricultural and non-agricultural activities. The Twelfth Five-Year Plan appraisal document, prepared by NITI Aayog exuded confidence that growth in 2016-17, would be 7 per cent to 7.75 per
cent.

 Population control: High growth rate of population among the lower strata of
the society is an important factor that is responsible for the perpetuating problem of poverty. Jansankhya Sthirata Kosh (JSK) has been registered as an autonomous society of the Ministry of Health and Family Welfare. The Government has provided a `100 crore corpus fund to signify its commitment to the activities of the Kosh. JSK has to use the interest on the corpus and also raise contributions from organizations and individuals that support population stabilization.

 Agricultural development: Along with a substantial increase in plan allocation and credit for agriculture proper, an ambitious Bharat Nirman for rural infrastructure, the National Rural Employment Guarantee Act (MGNREGA) to dovetail employment security with land and water conservation, and the Backward Regions Grants Funds (BRGF) have enabled Panchayati Raj institutions in poorer regions to make their own plans. In addition to enhancing the scope of these
initiatives, and making modifications as suggested by the various working groups, the Eleventh Plan introduced the Rashtriya Krishi Vikas Yojana (RKVY). This put in effect the NDC resolution to ‘introduce a new scheme for Additional Central Assistance to incentivize states to draw up plans for the agricultural sector more
comprehensively, taking agro-climatic conditions, natural resource issues and
technology into account, and integrating livestock, poultry and fisheries more fully.’ The Twelfth Five-Year Plan continued with RKVY with an outlay of 63,246 crore.

 Land reforms: The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was passed in 2013 by the central government and came into effect on 1 January 2014. Land acquisition was central to the government’s thrust in infrastructure development. The Act seeks to balance the need for facilitating land acquisition for various public purposes, including infrastructure development, industrialization and urbanization, while at the same time, meaningfully addressing the concerns of farmers and those whose livelihoods are dependent on the land being acquired.

 Development of cottage and small-scale industries: The small-scale industries have been given a special place in the industrialization programme. Since these industries have played an important role in the generation of employment and in
ensuring a more equitable distribution of income; the government has provided necessary incentives, support technical assistance and infrastructure facilities to promote these industries.

Public Distribution System: The government has also launched a scheme of Public Distribution System (PDS). The objective of this scheme is to provide
cheap and subsidized food grains to the poor. The PDS functions through a wide
network of fair price shops. Since June 1997, a new scheme known as the Targeted Public Distribution System (TPDS) has been adopted in order to provide subsidized food grains for the families falling below the officially estimated poverty line at the rate of 10 kgs per month per family. As passed by the Parliament, the government notified the National Food Security Act, 2013 on 10th September 2013 with the objective to provide for food and nutritional security in human life cycle approach, by ensuring access to adequate
quantity of quality food at affordable prices to people to live a life with dignity.


The Act provides for coverage of upto 75 per cent of the rural population and upto 50 per cent of the urban population for receiving subsidized food grains under Targeted Public Distribution System (TPDS), thus covering about two-thirds of the population. The eligible persons are entitled to receive 5 Kgs of food grains per person per month at subsidized prices of Rs. 3/2/1 per Kg for rice/wheat/coarse grains. The existing Antyodaya Anna Yojana (AAY) households, which constitute the poorest of the poor, will continue to receive 35 Kgs of foodgrains per household per month.