Poverty

Poverty

 

Introduction

  • It is a multidimensional phenomenon in which an individual or a group lacks the financial means and necessities for a basic level of living.
  • It also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one's life.
  • According to the Tendulkar Poverty line method, 20.8% of the Indian population was still in poverty in 2020.

 

What is Poverty?

  • It is defined as a state or condition in which an individual or a group lacks the financial means and necessities for a basic level of living.
  • It is defined as a situation in which one's earnings from work are insufficient to meet fundamental human requirements.
  • Poverty, according to the World Bank, is a severe lack of well-being that has various dimensions. Low earnings and the inability to obtain the essential commodities and services required for a dignified existence are examples of poverty.
  • The World Bank defined poverty as individuals living on less than $1.90 per day which is called the International poverty line.
  • In India, the National poverty threshold is given by the Tendulkar Committee.
  • It also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one's life.
  • In 2011, 21.9 percent of India's population was living below the national poverty threshold.
  • In 2018, about 8% of the world's workers and their families were living on less than $1.90 per day (international poverty line).

 

Status of poverty in India

  • Global MPI 2022: 415 million individuals in India were able to escape multidimensional poverty in the last 15 years between 2005–2006 and 2019–21, with the incidence of poverty exhibiting a sharp drop from 55.1% to 16.4%.
  • MPI report by NITI Aayog, 2021: National MPI score of India is 0.118. In India, 25.01% of the population was multidimensionally poor.
    • Kerala has turned out to be the state with the lowest rate of poverty in India. (only 0.71% of Kerala’s population is poor).
    • Kottayam of Kerala is the only district in India without poverty.
    • Bihar, Jharkhand, and Uttar Pradesh have registered the highest poverty rate across India.
    • 51.91% of the population in Bihar is classified as poor, followed by Jharkhand (42.16%) and Uttar Pradesh (37.79%).

 

Types of Poverty

  • Absolute Poverty: When a household's income falls below the level required to sustain basic living standards (food, shelter, housing). This condition allows comparisons between countries as well as throughout time.

○The "dollar a day" poverty line, first proposed in 1990, quantified absolute poverty according to the criteria of the world's poorest countries. The World Bank raised it to $1.90 per day in October 2015.

  • Relative Poverty: It is defined from a social perspective as a living standard that is lower than the economic standards of the surrounding population. As a result, it is a measure of income disparity.

○In most cases, relative poverty is defined as the percentage of the population earning less than a certain percentage of median income.

 

What is a Poverty Line?

  • Poverty levels are defined as a level of income or spending below which it is reasonable to conclude that someone is poorer than the rest of society.
  • It is a measure of income or consumption spending that distinguishes the poor from the rest of the population.
  • The Tendulkar Committee proposed a poverty level of Rs 29 per person per day in urban areas and Rs 22 per person per day in rural areas.
  • There are two reasons for choosing a poverty line.

○To create policies that are tailored to the needs of the poor.

○To determine if government programmes have been successful or unsuccessful over time.

 

Poverty Estimation in India

  • Poverty estimation in India is done by the NITI Aayog task force using data from the National Sample Survey Office under the Ministry of Statistics and Programme Implementation to calculate a poverty line (MOSPI).
  • In India, poverty lines are calculated primarily on consumption expenditure rather than income levels.
  • Consumer expenditure surveys conducted by the National Sample Survey Organization are used to determine poverty. A poor household is defined as one that spends less than a certain amount each month.
  • The poverty ratio, which is the ratio of the number of poor to the total population stated as a percentage, is used to determine the prevalence of poverty. It's also referred to as the head-count ratio.
  • The Alagh Committee (1979) established a poverty level based on an adult's daily calorie requirement of 2400 and 2100 calories, respectively, in rural and urban areas.
  • Following that, the poverty estimation was done by other committees, including the Lakdawala Committee (1993), Tendulkar Committee (2009), and Rangarajan Committee (2012).
  • According to the Rangarajan committee report (2014), the poverty line is set at Rs.1407 per capita in urban areas and Rs.972 in rural regions (monthly consumption).

 

Causes of Poverty in India

  • India's population has been continuously increasing throughout the years. It has risen at a pace of 2.2 percent per year for the past 45 years, implying that around 17 million people are added to the country's population each year. This has a significant impact on the demand for consumer products.
  • The agriculture sector's low productivity is a key source of poverty. Low productivity can be caused by a variety of factors. It is primarily due to fragmented and subdivided landholdings, a lack of cash, illiteracy about modern farming technologies, the use of conventional farming practices, wastage during storage, and other factors.
  • The country suffers from underemployment and hidden unemployment, notably in the agricultural sector. Low agricultural output and a drop in living standards have resulted as a result of this.
  •  India's economic development has been slow, particularly in the first 40 years of independence before the LPG reforms in 1991.
  • The country's price increases have been consistent, adding to the burden carried by the poor. Although a few people have profited, the lower-income groups have suffered as a result, and are unable to meet even their most basic needs.
  •  Unemployment is another element that contributes to poverty in India. As the world's population grows, so does the number of people looking for work. However, the expansion of opportunities is insufficient to meet the demand for jobs.
  •  In the absence of capital and entrepreneurship, the economy suffers from a lack of investment and employment creation.
  •  In addition to economic factors, social factors obstruct India's poverty eradication efforts. The laws of inheritance, the caste system, and certain customs, to name a few, are all obstacles in this regard.
  •  For nearly two centuries, the British colonization and authority over India de-industrialized the country by destroying its traditional handicrafts and textile industries. Colonial policies reduced India to a simple source of raw materials for European businesses.
  •  Bihar, UP, MP, Chhattisgarh, Odisha, Jharkhand, and other states in India account for the majority of the impoverished. Natural catastrophes like floods, disasters, earthquakes, and cyclones frequently strike these states, wreaking havoc on agriculture.

 

Poverty Alleviation Programs in India

Jawahar Rozgar Yojana/Jawahar Gram Samridhi Yojana:

The JRY was meant to generate meaningful employment opportunities for the unemployed and underemployed in rural areas through the creation of economic infrastructure and community and social assets.

Integrated Rural Development Programme (IRDP): It was aimed at providing assistance to the rural poor in the form of subsidy and bank credit for productive employment opportunities.

Rural Housing Indira Awaas Yojana: The Indira Awaas Yojana (LAY) programme aims at providing free housing to Below Poverty Line (BPL) families in rural areas and main targets would be the households of SC/STs.

Food for Work Programme: It aims at enhancing food security through wage employment. Food grains are supplied to states free of cost, however, the supply of food grains from the Food Corporation of India (FCI) godowns has been slow.

National Old Age Pension Scheme (NOAPS): This pension is given by the central government. It tries to address the issue of poverty due to old age

Annapurna Scheme: This scheme was started to provide food to senior citizens who cannot take care of themselves and are not under the National Old Age Pension Scheme (NOAPS), and who have no one to take care of them in their village.

Sampoorna Gramin Rozgar Yojana (SGRY): The main objective of the scheme continues to be the generation of wage employment, creation of durable economic infrastructure in rural areas and provision of food and nutrition security for the poor.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: The Act provides 100 days assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women. The central government will also establish National Employment Guarantee Funds. Similarly, state governments will establish State Employment Guarantee Funds for implementation of the scheme. Under the programme, if an applicant is not provided employment within 15 days s/he will be entitled to a daily unemployment allowance.

National Rural Livelihood Mission: Aajeevika (2011): It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income on a monthly basis. Self Help groups are formed at the village level to help the needy.

National Urban Livelihood Mission: The NULM focuses on organizing urban poor in Self Help Groups, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment ventures by ensuring easy access to credit.

Pradhan Mantri Jan Dhan Yojana: It aimed at direct benefit transfer of subsidy, pension, insurance etc. and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor.

 

Conclusion

Finally, poverty is a problem that affects the whole nation, not just one person. It should also be dealt with as soon as possible by putting in place appropriate solutions. Furthermore, poverty eradication is now a must for people’s, society’s, country’s, and economy’s long-term and inclusive development.

 

 

In a given year in India, official poverty lines are higher in some States than in others because:

(a) poverty rates vary from State to State.

(b) price levels vary from State to State.

(c) Gross State Product varies from State to State.

(d) quality of public distribution varies from State.

Answer: B

 

  • Despite the implementation of various programmes for eradication of poverty by the government in India, poverty is still existing’. Explain by giving reasons.
  • COVID-19 pandemic accelerated class inequalities and poverty in India. Comment.        
  • Why did human development fail to keep pace with economic development in India?