POVERTY

IN

INDIA

SUBMITTED TO: SUBMITTED BY:

Dr. M.S. Toor Ashpreet Kaur Bhalla
L-2K9-BS-185-M
 CONTENTS

 Meaning and Definition of poverty

 Poverty Line

 Below Poverty Line

 Income based Poverty Line in India

 Poverty Rates

 Causes of poverty

 What is being done?

 Employment Generation Programmes in Rural India

 Policy Recommendations

 Conclusion
MEANING OF POVERTY

 Poverty is the lack of basic human needs, such as clean water, nutrition, health
care, education, clothing and shelter, because of the inability to afford [Link]
is also referred to as Absolute poverty or destitution.

 Relative poverty is the condition of having fewer resources or less income than
others within a society or country, or compared to worldwide averages.

 About 1.7 billion people live in absolute poverty; before the industrial revolution,
poverty had mostly been the norm.

DEFINITION OF POVERTY
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.

POVERTY LINE
Standard family income threshold (set by each state and revised occasionally) below
which the family is officially classified as poor and entitled to welfare assistance. Below
Poverty Line

BELOW POVERY LINE

is an economic benchmark and poverty threshold used by the government of India to
indicate economic disadvantage and to identify individuals and households in need of
government assistance and aid. It is determined using various parameters which vary
from state to state and within states.
INCOME BASED POVERTY LINE IN INDIA

 Planning Commission of India has defined poverty line based on recommended

nutritional requirements of 2400 calories/person/ day for rural areas & 2100
calories/ person/day for urban areas.

 Based on this, income criterion has been adopted in India to determine poverty
line. The latest income criterion is based on 2004-05 data.

 All India level minimum income for rural and urban areas for a person/ month
should be Rs. 356.30 and Rs.538.60 respectively.

GENERAL

 One fifth of the world’s population live on less than $ 1 a day, and 44% of them
are in South Asia

 26 percent of India is below the poverty line.

 This is happening mainly in rural areas of India.

The poverty line in recent years is as follows - (Rs. per month per head)

Year India Rural India Urban

2000–2001 328 454

2005–2006 368 560

Annual rates of growth of national income (per cent)

In 000’ Rs
Official poverty estimates (% of population below poverty line)

Rates of Poverty Reduction

 Calorie insufficiency in India (% of population)

Annual rates of employment growth for usual status workers (percentages)

Poverty in the States of India

 One half of India’s poor is located the three states of Uttar Pradesh, Bihar, and
Madhya Pradesh

 Maharashtra, West Bengal and Orissa account for 22.5% of poverty

Female Literacy and Infant Mortality Rates

 Lack of food and health care due to low income/assets is associated with the
higher probability of a new born child dying between birth and the age of one

 The High Female illiteracy rate has a major impact on IMR

 If more women were illiterate the IMR would be much higher

Causes of Poverty
 Even though India’s economy is growing there wealth distribution is uneven.
 1/4 of the nation's population earns less than the government-specified $0.40/day.
 Unemployment and underemployment.
 Over-reliance on agriculture.
 High population growth rate.
 Illiteracy
 Large Families
 The Caste System(Hindu Religion) prevents people from educational, ownership,
and employment opportunities.

What is Being Done?

 Microfinance( very small loans) has helped India a lot.
  There are multiple organizations to help feed them and keep there agriculture
going.

 The Planning Commission sets up a five year plan for India to help them achieve
goal such as ending poverty.

Positive Things Happening in India: Middle Class

 Currently India adds 40 million people to its middle class every year.

 estimated 300 million Indians now belong to the middle class.

 one-third of them have emerged from poverty in the last ten years.

 It is predicted that by 2025 the Majority of Indians will live in middle class.

State-Specific Poverty Lines in 2004-05

(Rs. per capita /month)

State/Union Territories Rural Urban

Andhra Pradesh 292.95 542.89
Assam 387.64 378.84
Bihar 354.36 435.00
Chhattisgarh 322.41 560.00
Gujarat 353.93 541.16
Haryana 414.76 504.49
Jammu & Kashmir 391.26 553.77
Jharkhand 366.56 451.24
Karnataka 324.17 599.66
State-Specific Poverty Lines in 2004-05
(Rs. per capita /month)

State/Union Territories Rural Urban

Kerala 430.12 559.39
Madhya Pradesh 327.78 570.15
Maharashtra 362.25 665.90
Orissa 325.79 528.49
Punjab 410.38 466.16
Rajasthan 374.57 559.63
Tamil Nadu 351.86 547.42
Uttar Pradesh 365.84 483.26
Uttarakhand 478.02 637.67
West Bengal 382.82 449.32
All-India 356.30 538.60

Present Poverty Concept in India

• For the first time, Uniform Recall Period (URP) and Mixed Recall Period
(MRP) concepts have been used in 2004-05 to determine BPL population in India.

• URP consumption = Uniform Recall Period consumption in which the

consumer
expenditure data for all the items are collected from 30-day recall period.

MRP consumption = Mixed Recall Period consumption in which the consumer

expenditure data for 5 non-food items, viz., clothing, footwear, durable goods, education
and institutional medical expenses are collected from 365-day recall period and the
consumption data for the remaining items are collected from30-day recall period.

URP DATA FOR SOME Major States of India(2004-05)

States/ Union Territories Rural
No. of Persons
(%) (Million)
Andhra Pradesh 11.2 6.47
Assam 22.3 5.45
Bihar 42.1 33.67
Chhattisgarh 40.8 7.15
Gujarat 19.1 6.34
Haryana 13.6 2.14
Jammu & Kashmir 4.6 0.36
Jharkhand 46.3 10.31
Karnataka 20.8 7.50
Kerala 13.2 3.24
Madhya Pradesh 36.9 17.56
Maharashtra 29.6 17.11
Orissa 46.8 15.17
Punjab 9.1 1.51
Rajasthan 18.7 8.73
Tamil Nadu 22.8 7.65
Uttar Pradesh 33.4 47.30
Uttarakhand 40.8 2.71
West Bengal 28.6 17.32
All-India 28.3 220.93

MRP Data for Some Major States of India (2004-05)

Rural
States/Union Territories
No. of Persons
(%) (Million)
Andhra Pradesh 7.5 4.32
Assam 17.0 4.14
Bihar 32.9 26.29
Chhattisgarh 31.2 5.47
Gujarat 13.9 4.62
Haryana 9.2 1.45
Jammu & Kashmir 2.7 0.22
Jharkhand 40.2 8.97
Karnataka 12.0 4.33
Kerala 9.6 2.36
Madhya Pradesh 29.8 14.20
Maharashtra 22.2 12.84
Orissa 39.8 12.93
Punjab 5.9 0.97
Rajasthan 14.3 6.67
Tamil Nadu 16.9 5.65
Uttar Pradesh 25.3 35.76
Uttarakhand 31.7 2.11
West Bengal 24.2 14.66
All-India 21.8 170.30

Employment Generation Programmes in Rural India

 Presently in rural India 2 employment programmes are in operation sponsored by
the Government of India.

 One is self employment programme for rural below the poverty line population.
Known as Swarnajayanti Gram Swarojgar Yojana (SGSY).

 Another is wage employment programme for rural households which have been
implemented under the Act passed in the Parliament in September 2005. This is
known as National Rural Employment Guarantee Act (NREGA) and as a
programme known as National Rural Employment Guarantee Scheme (NREGS).

Salient Features about SGSY

  Launched in the country from 1st April 1999.

 Organizing poor into Self-help Groups (SHGs).

 After skill development & training , Income Generating Activities are given
through mix of Credit & Subsidy.

 Emphasis on vulnerable sections: Scheduled Caste/ Scheduled Tribe (50%),

Women(40%), Minorities (15%) & Physically Challenged (3%).

 About 3.2 million self-help groups formed since from April 1999 to November
2008 . On an average each self-help group consists of 10 members from 10
different families. Thus roughly 32 million families pursuing economic activities.

Salient Features about NREGS

 Under the Act passed in the Parliament in September 2005.

 Employment is provided to every rural household’s adult member for 100 days in
a financial year.

 Work be provided within 5 kilometers radius of the village or extra wages of

10% payable.

 Each employment seeker to be registered at local self-government, after due

verification and the household is provided a Job Card.

 Village level local self-government is the authority for planning, registering,

issuing job cards to the beneficiaries, allocating employment and monitoring of
works.
Participatory Identification of Poorest of the Poor (PIP) in Andhra Pradesh: A
Qualitative Approach
 Participatory Identification of Poor is being implemented in all the Mandals of
Andhra Pradesh (Mandal is the development unit consists of 15 to 20 villages).

 There are 1128 Mandals in Andhra Pradesh.

 Under ‘Participatory Identification of Poor’ some general indicators are decided at

the district and Mandal level.

 In rural areas agricultural land is an important issue, so indicators regarding the

definition of poorest of the poor is decided first based on land holding followed
by ‘Well being’ of the families.

PIP
 Village to village “Well Being” differs so based on workshop held at
District /Mandal level, indicators are developed.

 After deciding of Indiacators training imparted to Mandal Resource Persons

(MRPs).

 Generally 8-12 MRPs for each Mandal are given training.

 The MRPs, after being trained begin the programme of “identifying the poor
through participatory method” which is later on approved by the elected
representatives of the village.

A case from Balijaguda village, Hayatnagar Mandal of Ranga Reddy district ,

Andhra Pradesh
 Study carried out in January, 2003 under the guidance of Society for Elimination
of Rural Poverty (SERP). Entire process was carried out by the villagers.
 Poorest of the poor 26 families
(Indicators)
 Small Hut
 2 or 3 children, no one going to school
 No Agricultural land
 Daily wage earners- Work – Earn - Eat
 No sheep or goat or cow or buffalo
 Serious illness approach to Government Hospitals
 No approach to Bank

Case 2: Ramakka
 Ramakka a very poor woman of marginalize social group, before joining Menaka
Gandhi self-help group in 1995.

 Never gone school. Eating 2 square meals a day difficult.

 Out of 5 children, 4 children died due to lack of care and poverty. Later her
husband also died.

 After joining the self-help group, she was sanctioned Rs. 5000 for undertaking
business, started selling of eggs.

 Daily earning was Rs. 25. Repaid loan & got another dose of loan for sheep
rearing. Process continued for 14 times.

 Now she owns 5 acres of agricultural land and 1.5 acres of mango garden, which
are looked after by her married son. Another case of ‘Zero to Hero’
4 cases from Nannoor village, Orvakal Mandal, Kurnool district, Andhra Pradesh
where quality of life has been improved.

Name Before joining self-help After joining self-help group

group (1999) (April 2009)
Chi. Shajaha Widow with a daughter; House constructed; beedi making;
Husband died of TB; No Grocery shop;
property; Illiterate; Beedi-
making ( a type of local
cigarette) ;
Rahamath Bee Husband blind; No house;Grocery shop; Bangle selling; Sweet
No property; selling by Husband;
Ch. Noorjaha Widow at 23 years age Husband Building Contractor ; Beedi
with two children; No making
property; Beedi making;
Government sanctioned
house;
Pedda Shajaha No land; Husband was Self- beedi making; Husband
working as mason; Self- Building Contractor ;
beedi making; two
children;

Policy Recommendations
 Agriculture growth alone without any specific strategy is in sufficient to reduce
the level of rural poverty; therefore a comprehensible strategy should be
developed to trickle down the growth at the grass root level.

 Non agriculture sector should be developed to diversify the income sources of

poor households, because analysis highlights the fact that income and
employment multipliers of agriculture growth were insufficient to lead to
substantial gains in rural form and nonfarm incomes.
  Education should be given to every individual, because education plays a vital
role in the exit from poverty

 Land should be redistributed, because the pattern of land holding in Pakistan is

very much skewed; and lack of assets make it very difficult for poor households
to smooth their consumptions in bad years.

 Infrastructure must be improved, because location specific factors are also

involved in determining the poverty status.

Highlights
 26% of India is below poverty line.

 Major reasons of poverty are illiteracy, high population, unemployment and

unequal distribution of wealth.

 MRP and URP are the concepts presently used in India to determine BPL
population

 Employment Generation Programmes have been undertaken by Government.