POVERTY
BY
KRISHNAKUMAR C S, PGT ECONOMICS
DAV – BHEL SCHOOL, RANIPET
Poverty is a situation in which an individual is unable
to fulfill the basic necessities of life such as food,
shelter, clothing, basic education and healthcare.
• SECTIONS OF SOCIETY THAT ARE VULNERABLE TO
POVERTY IN URBAN AREAS (URBAN POOR)
PUSH CART VENDORS COBBLERS FLOWER SELLERS
STREET VENDORS RAG PICKERS BEGGERS
• SECTIONS OF SOCIETY THAT ARE VULNERABLE TO
POVERTY IN RURAL AREAS (RURAL POOR)
LANDLESS LABOURERS MARGINAL AND SMALL FARMERS
VILLAGE ARTISANS
CHARACTERISTICS OF POOR PEOPLE
(MANIFESTATIONS OF POVERTY)
They live in huts. Some of them do not have any
shelter.
In villages, they are landless. Some of them have
small pieces of land.
They do not get sufficient food. Starvation is
common among them. Children suffer from
malnutrition.
They are uneducated and unskilled. So, it is
difficult to get employment.
Many of them suffer from diseases. Health
condition is poor.
They do not get safe drinking water and sanitation
facilities.
The children do not get education.
They borrow money from money lenders and fall
in to debt trap.
Gender inequality prevails among them. Women
are the poorest among the poor.
Measures of Poverty
Absolute Poverty
Relative Poverty
ABSOLUTE POVERTY
• It refers to the inability to secure basic necessities of
life such as food, shelter, clothing, basic education
and health care.
RELATIVE POVERTY
• It refers to the poverty of people in comparison to
another person, place or country.
• Examples:
• A teacher is poor in comparison to a big business
man.
• A casual worker is poor in comparison to a teacher.
• India is poor in comparison to the USA.
• Somalia is poor in comparison to India.
POVERTY LINE
The minimum income required for a person
to satisfy his basic necessities of life is termed Poverty
Line. It is used to identify the poor people.
Estimation of Poverty line
The minimum food required for a person is
calculated in calories. Then it is converted in to
equivalent money value. A minimum amount is added
for shelter and clothing. The total amount is called
Poverty Line.
If a persons income or expenditure is less than
poverty line, he is considered poor (Below Poverty
Line). India uses Monthly Per capita Expenditure(MPCE)
DADABHAI NAOROJI
He is the first person to estimate Poverty
Line in India. He used Jail Cost of living. He estimated the
amount of money needed for providing food to a prisoner.
Adjustments were made to calculate the amount needed
Attempts to Estimate Poverty Line after Independence
(i) In 1962, the Planning Commission set up a Study
Group.
(ii) In 1979, another the ‘Task Force on Projections of
Minimum Needs and Effective Consumption Demand’
was formed.
(iii) IN 1989 1ND 2005 Expert Groups were formed.
CATEGORIES OF POOR PEOPLE
DRAWBACKS OR LIMITATIONS OF POVERTY LINE
(i) It does not differentiate between poor and very
poor.
(ii) It considers only the money needed for food,
shelter and clothing. Man needs many other
facilities like basic education and health care.
(iii) It does not consider social factors like illiteracy,
social discrimination, ill health etc.
ALTERNATIVE METHODS TO MEASURE POVERTY
• Amartya Sen, has developed an index known as Sen
Index.
• Poverty Gap Index and Squared Poverty Gap are the
other tools used to identify poor.
HEAD COUNT RATIO
• The Head count ratio (HCR) is the proportion of
population below Poverty Line.
Head Count Ratio = X 100
POVERTY SITUATION IN INDIA
(i) In 1973 – 74, 320 million people were below poverty line. In 2011 – 12, this
number has decreased to 270 million.
(ii) In 1973 – 74, 55% of the population was below poverty line. In 2011 – 12, it
has decreased to 22%
(iii) More than 75% of the poor people are living in rural areas.
(iv) Poverty is severe in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh.
(v) Poverty has decreased considerably in Tamil Nadu and West Bengal.
• CAUSES OF POVERTY IN INDIA
(i) social, economic and political inequality
(ii) social exclusion
(iii)unemployment
(iv) indebtedness
(v) unequal distribution of wealth.
(vi) low capital formation
(vii) lack of infrastructure
(viii) lack of demand
(ix) rapid growth of population
(x) lack of social/ welfare nets.
(xi) British Rule
BRITISH RULE AND POVERTY
• British followed a policy of de-industrialisation in
India. Indian industries declined during the British
Rule.
• Indian agricultural sector became backward. Land
Revenue systems introduced by the British resulted
in the decline of agriculture.
• The British imposed heavy tax on the Indian people.
• They took away India’s resources. They used India
as a market for selling their goods and a source of
raw materials.
• GOVERNMENT’S APPROACH TO ABOLISH POVERTY
ECONOMIC GROWTH
POVERTY ALLEVIATION PROGRAMMES
PROVIDING BASIC FACILITIES
A. Growth Oriented Approach:
Increase in GDP and Per Capita GDP will help
in abolishing poverty. The effects of economic growth
will spread to all sections of society. It will trickle down
to poorer sections of society. So, development of
agricultural sector, industrial sector and service sector
was given priority in the Five year Plans.
B. POVERTY ALLEVIATION PROGRAMMES
They are targeted programmes to help poor
people to come out of poverty. They aim at providing
employment and create social assets.
(i) National Food for Work Programme (NFFWP) was
launched in 2004 to provide wage employment to
unemployed people.
Wage will be given in the form of food materials.
Creation of community assets like roads, schools,
hospitals and public buildings are given importance in
this programme.
(ii) Rural Employment Generation Programme (REGP):
It aims at creating self employment opportunities
in rural areas and small towns.
The Khadi and Village Industries Commission is implementing
it.
Under this programme, one can get financial assistance in the
form of bank loans to set up small industries.
(iii) Prime Minister’s Rozgar Yojana (PMRY):It was
launched in 1994 to create self employment.
Educated young men are given financial and technical
help to start their own enterprises.
(iv) Swarna Jayanti Shahari Rozgar Yojana (SJSRY):
SJSRY mainly aimed at creating employment
opportunities— both self-employment and wage
employment—in urban areas.
Now this programme is renamed Prime Minister’s
Employment Generation Programme (PMEGP).
(v) Swarnajayanti Gram Swarozgar Yojana (SGSY):
This programme encourages rural unemployed men and
women to form self help groups and start their own
enterprises.
Financial and technical help are provided through SHGs.
Now this programme is restructured as National Rural
Livelihoods Mission (NRLM) (Deendayal Upadhyay Antyodaya
Yojana).
(vi) National Urban Livelihoods Mission:
This programme encourages urban unemployed men
to form self help groups and start their own
enterprises.
Technical and financial help is provided through SHGs.
(vi) Mahatma Gandhi National Rural Employment Guarantee Act
(MNREGA):
It was passed in 2005.
Under this Act, it is the responsibility of the Government to provide
at least 100 days work to one member of a family in an year.
It is also called Right to Work Act.
C) Third approach was to directly provide basic
facilities to the poor.
• Examples: Provide food materials at subsidised
rates, provide free education and health care,
provide safe drinking water and sanitation facilities
etc.
• Public Distribution System, Integrated Child
Development Scheme and Midday Meal Scheme.
Pradhan Mantri Gram Sadak Yojana and Valmiki
Ambedkar Awas Yojana are aimed at providing
minimum basic necessities to the poor people.
• National Social Assistance Programme : Under this
programme, old people who do not have anyone to
take care of them are given pension. Poor women
and widows are also covered under this scheme.
• Jandhan Bank Accounts: People are encouraged to
open zero balance bank accounts. This will promote
saving habit. It enables Government to provide all
benefits and subsidies directly to the people. The
account holder gets insurance for Rs. 30000/- and
accident insurance for Rs. 1 lakh.
REASONS BEHIND THE FAILURE OF THE POVERTY
ALLEVIATION PROGRAMMES
• Due to unequal distribution of land and other
assets, the benefits from direct poverty alleviation
programmes have been taken away by the non-
poor.
• The resources allocated for Poverty Alleviation
Programmes are not sufficient.
• The Government and Bank officials who are
responsible to implement the programmes are
illmotivated, ill trained.
• Local institutions do not participate actively in these
programmes.
• The people just above poverty line do not get the
benefits of these programmes.
• People’s participation in these programmes is less.
