POVERTY
Meaning of Poverty
Poverty is one of the most widespread socio-economic problems in India. It is, indeed, a common problem that is being faced by most of the underdeveloped and developing countries of the world. It is not only socio-economic but also emotional, cultural, and political. The development that has been taking place in this land for the past six decades has not been able to wipe out poverty. Poverty has been the root cause of many of the problems. As a multidimensional phenomenon, poverty is defined and measured in many ways. This section describes the various meanings of poverty. In India, 21.9% of the population lived below the national poverty line from 2007-2018, and the proportion of employed people below $1.90 purchasing power parity a day from 2007-2017 was 21.2%.
As per Global Multidimensional Poverty Index (MPI) 2019, India stood 0.123 Index amongst the developing countries in 2015/2016. Additionally, 8.8 percent of the population lives in severe multidimensional poverty, and 19.3 percent of the population is vulnerable to multidimensional poverty.
Definition of Poverty
The definition matters because how it is defined determine how much poverty there is. The definition can also influence the explanations of poverty and the possible solutions that are put forward.
As Ruth Lister puts it, ‘how we define poverty is critical to political, policy and academic debates about the concept. It is bound up with explanations and has implications for solutions.’
According to Gillin and Gillin, “Poverty is that condition in which a person either because of inadequate income or unwise expenditures, does not maintain a scale of living high enough to provide for his physical and mental efficiency and to enable him and his natural dependents to function usefully according to the standards of the society of which he is a member.”
According to Adam Smith, “A person ... is rich or poor according to the degree in which he can afford to enjoy the necessaries, the conveniences and the amusements of life.” - Adam Smith in his “Wealth of Nations.”
According to Goddard, “Poverty is insufficient supply of those things which are requisite for an individual to maintain himself and those dependent upon him in his health and vigour.”
Therefore, poverty refers to a situation when people are deprived of basic necessities of life. It is often characterized by inadequacy of food, shelter, and clothes. In other words, poverty refers to a state of deprivation where there is a lack of essential needs for subsistence.
Concept of Poverty
The Concept of poverty is multi-dimensional (viz., income poverty and non-income poverty). It covers not only the levels of income and consumption but also health and education, vulnerability and risk, and marginalization and exclusion of the poor from the mainstream of poverty. To quote Prof. Chelliah, “There has been much debate about how exactly poverty should be defined. In popular understanding, poverty is identified with lowness of income, which prevents a family from obtaining and enjoying the basic necessities of life, including a minimum of food, clothing, and shelter water. This concept is defined as income poverty. For a comprehensive picture of poverty those other deprivations, such as in relation to health, education, sanitation and insurance against mishaps, must be taken into account.”
Poverty means scarcity or few. From a social and economic point of view, it refers to that state or condition which fails to provide minimum necessities of life. Thus, poverty leads to an extremely lower standard of living, denying even the basic requirements of life to a vast majority of the population. Poverty is a state where a section of society cannot get the basic necessities of life.
Poverty is a relative concept. No individual or country is absolutely poor or rich. A man is poor or rich in comparison to the others. As Adam Smith says, “Man is poor or rich according to the degree in which he can afford to enjoy the necessaries, conveniences and amusements of life.” However, the form of these minimum necessities changes with variation in place and time. There is no uniform standard to define poverty throughout the world.
Poverty conventionally refers to the inability of the people to attain certain predetermined minimum consumption needs. But in a wider sense, poverty is the constraint that restricts people from enjoying certain life facilities of life. This is regarded as capability poverty. Thus, capability poverty is defined as the lack of basic capabilities. When people are unable to reach a certain level of essential human achievements of functioning, they suffer from capability poverty.
Poverty hinders economic development, especially in India, by reducing working capacity, efficiency, saving, and investment. If the mass population remains below the poverty line, it will reduce savings, investment, income, and employment. Less income will lead to less savings, less investment, and less income and employment. Thus, the vicious circle of poverty operates in a country. Poverty connotes that people who do not enjoy a certain minimum consumption standard should be regarded as poor.
Absolute Poverty and Relative Poverty
Since the 19th century, when rigorous studies of poverty first began, researchers have tried to establish a fixed standard against which to measure poverty. There have been areas of controversy over the basic principles on which such a standard can be based.
Let us discuss the two expressions, absolute and relative poverty, which are quite common in any in-depth study of poverty.
Absolute Poverty:
Right from the 19th century, some researchers have been trying to fix some yardstick for measuring poverty in precise terms. Ideally, such a yardstick would help us establish a fixed level of poverty, known as the “poverty line,” below which poverty begins and above which it ends. Such a yardstick is believed to be universal in character and would be applicable to all societies. This concept of poverty is known as “absolute poverty.
Absolute poverty is often known as “subsistence poverty,” for it is based on assessments of minimum subsistence requirements of basic “physical needs” such as food, clothing, shelter, health requirements, etc. Some concepts of absolute poverty would even include the idea of “basic cultural needs.” This broadens the idea of basic human needs beyond the level of physical survival. Drewnowski and Scott include education, security, leisure, and recreation in their category of “basic cultural needs.”
Relative Poverty:
The difficulties involved in applying the consent of “absolute poverty” made some researchers abandon the concept altogether. In place of absolute standards, they have developed the idea of relative standards, that is, standards which are relative to a particular time and place. In this way, the idea of absolute poverty has been replaced by the idea of relative poverty.
“Relative poverty is measured in terms of judgements by members of a particular society of what is considered as reasonable and acceptable standard of living and styles of life according to the conventions of the day. Just as conventions change from time to time, and place to place, so will definitions of poverty.” in a rapidly changing world, definitions of poverty based on relative standards will constantly be changing. Hence, Peter Townsend has suggested that any definition of poverty must be “related to the needs and demands of a changing society.”
Causes of poverty
The causes of poverty are many-sided. However, it may be discussed under the following heads:
Individual incapacity:
There are various causes for an individual’s failure. Failure in life may be due to inborn deficiencies such as physical or mental handicap, dumbness, deafness, blindness, feeble mind, deficient legs and hands, and so on. Some of the deficiencies might have been developed later in life. Since an individual does not have any control over many of these deficiencies, he is bound to yield to them and suffer from them. They make such an individual a parasite on society.
Some individuals often neglect some of the deficiencies that can be managed or overcome and hence falls prey to poverty. It may include, under this category, deficiencies such as illiteracy, laziness, extravagance, immorality, and bad habits such as gambling, alcoholism, etc.
Economic factors:
It is further categorized in the following below:
Inadequate Economic Development:
Our economic development since independence has been disappointing in certain respects. The rate of growth of our economy between 1951-91 has been just 3.5% which is negligible. During 2004-05, though this growth rate increased to 5%, it was not enough to fight the challenges of poverty. Our per capita income is still very less. In 2017-18, the monthly per-capita income stood at Rs 9,580. In March 2019, during the financial year ended, per-capita income was estimated to have risen by 10 percent to Rs 10,534.
Increasing Unemployment:
Our economy has not provided enough employment opportunities for the people. The unemployment rate in India increased to 8.2 percent to the Centre for Monitoring Indian Economy (CMIE) on 21 August 2019, from 3.52 percent in 2017. The unemployment rate in India averaged 4.05 percent from 1983 until 2017, reaching an all-time high of 8.30 percent in 1983 and a record low of 3.41 percent in 2014. Out of Seven States in North Eastern, five (5) states are on top in the table below. Tripura is in top rank in unemployment, following Sikkim, Assam, Arunachal Pradesh, and Nagaland.
Unmanageable inflationary Pressures:
Due to incessant inflation, the value of money has come down. It came down to 8.28 paisa in 1990-91. The annual inflation rate was estimated to be at 13.4% in 1991, and with great difficulty, it was brought down to 7.3% in 1997. The rupee value further decreased to 7.2 paise at 1960-61 prices. As per Economic Survey 2019, Consumer Price Index (CPI) stood at 2.9 percent in April 2019, compared to 4.6 percent in April 2018. This uncontrolled inflation adversely affected the purchasing power of the common people.
Capital Deficiency:
Capital is needed for setting up industry, transport, and other projects for the fast growth of industries. The process of economic liberalization, which has been let loose recently, has, of course, started showing its positive results these days. Shortage of capital creates hurdles in development.
Too much Dependence on Agriculture:
Our economy is primarily agrarian. More than 65% of the people are still dependent on agriculture. Agriculture has its own limitations. In India, in particular, people follow the traditional cultivation method, so agricultural production is comparatively very low.
Social factors:
Traditionalism:
India is a land of traditionalism, communalism, casteism, linguism, parochialism, religious and linguistic prejudices, and so on. These factors have a negative effect on the country’s progress by making people dogmatic in their approach and narrow–minded and selfish in outlook.
Illiteracy and ignorance:
Illiteracy and ignorance are supportive of poverty. India’s literacy rate is at 74.04%. Tripura has achieved the highest literacy rate of 94.65%. Bihar is the least literate state in India, with a literacy of 63.82%. The biggest population in the Northeast is facing the issue of unemployment; however, the literacy rate of Northeastern states Tripura, Manipur, Meghalaya, Assam, and Nagaland are higher than in other metro cities.
Further, our defective educational system is incapable of generating employment, and there is no guarantee of jobs for the educated youths.
The dominance of Caste and Joint Families:
Our caste system still has its hold on the caste members. The caste system compels its members to stick to the traditional and hereditary occupations of the caste. It does not encourage the caste members to take up jobs of their choice. In the same manner, the joint families, which are still dominant in the rural areas, do not allow young members to take the initiative in making new adventures in the employment and economic spheres.
Spread of diseases:
The poor, who are also illiterate, have a limited chance of using improved production technologies and preventive health services. That is why diseases such as HIV and Malaria have exacerbated the already precarious conditions of the poor. Diseases increase expenditure on health while reducing effective working time, thus plummeting household labor productivity and availability. The association between diseases and poverty can be easily depicted using the case of HIV-AIDS.
Demographic factors:
The population in India is growing at an alarming rate. The total population in 1921 within the present borders of India (i.e., excluding what is now Pakistan and Bangladesh) was 251 million. In 1947, at the time of independence, it was about 340 million. India’s population doubled between the 1947 and 1981 census, and from 2001 to 2011 population added 181 million.
Other factors:
A long period of Foreign Rule:
India was under foreign rule for a very long period. The British, who ruled India ruthlessly, had systematically spoiled the basic economic structure of our land and destroyed the various arts, crafts, cottage, and small-scale industries that we had previously. They exploited Indian resources for the glory of Britain and made Indians parasites in several respects.
Climate Factors:
Climate can also be a cause of poverty. India's hot climate reduces the people's capacity to work, and hence, naturally, production cannot be increased to the desired quantity.
Wars and Threats of War:
India had to spend a huge amount of money on wars that she had fought with China and Pakistan. There is a constant threat of war also. Hence a huge amount of money is being spent on our defense industry. About 15% to 25% of national income was spent previously for defense purposes. At the Union Budget held on 5 July 2019, Nirmala Sitharaman, the finance minister, announced that the fixed amount for the Defence Sector on February 1, 2019, Interim Budget was Rs.3.18 lakh crore, and this will stay the same.
Defective Political System and Lack of Political Will:
Indian political system is very often condemned as corrupt. Inefficient and defective. Unhealthy competition among the political parties for power has often damaged our national interests.
Consequences of poverty
Culture of Poverty:
An anthropologist, Oscar Lewis, developed the concept of ‘Culture of poverty’ based on his studies in Mexico. He suggests that the poor develop a culture of their own, or rather a subculture which is not part of the behaviour pattern or the value system of the society in which they live. Lewis says that the poor tend to be socially isolated. Apart from the family, no matter what other group they belong, their outlook remains narrow. They do not relate to their whole society or the poor in other parts of the country. The individual who grows up in this culture has strong feelings of fatalism, helplessness, dependence, and inferiority. Their orientation is to live in the present; they hardly think of the future.
In brief, it can be said that the culture of poverty is both an adaptation and a reaction of the poor in the marginal position. It is an effort to cope with the feeling of hopelessness and despair due to a realization that it is almost impossible to achieve success according to the values of the high societies. Their isolation also means a lack of participation in the activities of the society-political, social and economic.
Poverty in India:
This week, the World Bank released a report saying the proportion of people living in extreme poverty fell to 9.6 percent in 2015, whereas in 2012, to12.8percentt.
Poverty in Rural India:
According to Malthus, poverty increases because food production increases in arithmetic progression while population increases in geometrical progression.
A World Bank report released this week has proposed a new way to measure poverty, which suggests that India may have been overestimating the number of its poor. Ministry of Rural Development, nearly 7 percent of the country’s rural population still live in “extreme poverty.”
Some of the reasons behind rural poverty in India:
Farming in India relies heavily on monsoons that bring rainfall and irrigate the land. This means that erratic weather, cyclones, water shortages, and droughts have a huge impact on agriculture and can cause damage to crops.
A social issue related to poverty in rural India is the custom of child marriage. It was estimated that one-fifth of Indian girls are married before age 16 and give birth to their first child before age 18.
Due to the high poverty rate, they depend on loans with relatively high annual interest rates. While this seems like a good solution to the poverty crisis and reduces the immediate pressure of economic needs, it will negatively affect these rural areas in the long run. Such loans lead to future debts and increase the demand for funds to pay back the loans.
The Green Revolution started in 1965 to increase food grain production, particularly wheat. The upper social class or caste owned large portions of cultivated land; most people owned little land. Due to this reason, they struggle with a low income which leads to the debt since the harvests from their lands seldom bring a profit.
Other issues such as crop patterns, neglect of crop rotation, and poor-quality materials and technology influence poverty in rural India.
Poverty in Urban India:
However, if we compare it to rural poverty, urban poverty is comparatively low.
Some of the reasons behind urban poverty in India:
The lack of affordable housing leaves these people's addresses on paper. They settle wherever they can, but a whole community of undocumented settlers emerges as more people join. This further complicates the procedure of accessing basic services like electricity, water, sanitation, etc., as the authorities and public utilities can only serve those registered on paper this is how poverty begins.
As cities worldwide rapidly develop, life is becoming increasingly difficult for those left behind. In India, the causes of urban poverty can be linked to the lack of infrastructure in rural areas, forcing inhabitants to migrate or seek work in cities.
Those who seek work in cities overcrowded the cities, which becomes a major factor in informal settlements. Due to a lack of awareness of personal health and hygiene, many people suffer from different types of infections and diseases.
Due to low income, these communities cannot meet the standard of medical help. Therefore, when it rains, or the neighbourhood is flooded, these settlements become breeding grounds for various parasites and infections, and the cycle repeats itself.
Inequality of Income and wealth:
Income distribution is unequal. Let us highlight some of the main reasons for the following –
Unemployment:
The reason for the inequality distribution of the majority of Indian people is unemployment and underemployment, which leads to low productivity of labour. Due to low labour productivity leads to a low rate of economic growth and is considered to be the main cause of the large masses of people. As per the Centre for Monitoring Indian Economy (CMIE) report on 21 August, 2019 unemployment rate in India is 8.2%, compared to urban and rural areas of 9.8% and 7.5%, respectively. Therefore, sufficient employment could not be generated through planned economic development, leading to low-income levels for most people.
Inflation:
Another cause of inequality is inflation. During inflation, few profit earners gain, and most wage earners lose. This is exactly what has happened in India. Since wages have lagged behind prices, profits have increased. This has created more and more inequality. Moreover, money income increases no doubt during inflation, but real income falls. And this leads to a fall in the standard of living of the poor people since their purchasing power falls.
During inflation, workers in the formal sector get higher wages which partly offset the effect of price rise. But wages and salaries of workers in informal sectors (such as agriculture and small-scale and cottage industries) do not increase. So, their real income (purchase income) falls. This is how inequality in the distribution of income increases between the two major sectors of the economy — formal and informal sectors.
Tax Evasion:
In India, the personal income tax rates are very high. High tax rates encourage evasion and avoidance and give birth to a parallel economy. This is exactly what has happened in India during the plan period. Here, the unofficial economy is as strong as (if not stronger than) the official economy. High tax rates are responsible for inequality in the distribution of income and wealth. This is due to undue concentration of incomes in a few hands caused by large-scale tax evasion.
Regressive Tax:
The indirect taxes give maximum revenue to the government. But they are regressive in nature. Such taxes have also created more and more inequality over the years due to the government's growing dependence on such taxes.
New Agricultural Strategy:
India’s new agricultural strategy undoubtedly led to the Green Revolution (1960) and raised agricultural productivity. But the benefits of higher productivity were enjoyed mainly by the rich farmers and landowners. At the same time, the economic conditions of landless workers and marginal farmers deteriorated over the years. Most farmers in India could not enjoy the benefits of higher agricultural productivity. As a result, inequality in the distribution of income in rural areas has increased.
Poverty is not merely an economic phenomenon but also has political and social ramifications.
Strategies for Alleviating Poverty
Since the end of World War II, the Third World countries are attempting to eliminate the colonial legacy of underdevelopment and social backwardness by adopting various measures to reshape the economy and social structure. The newly emerged independent states have been trying to follow the path of rural development; India has adopted various poverty alleviation measures. The “Garibihatao” slogan was adopted during the Fifth five-year plan. The government of India has started various poverty alleviation programmes of basically two types:
Encouraging self-employment
Providing supplementary wage employment
The followings are some schemes of Poverty alleviation:
Encouraging self-employment
Integrated Rural Development Programme (IRDP):
It started in 1978-79 to eliminate rural poverty by providing income-generated assets to the poorest of the poor. It was based on the assumption of the creation of assets and skills which are expected to generate a permanent flow of income for the beneficiaries identified as the poorest of the poor. The rural youth from families below the poverty line have the necessary technical and entrepreneurial skills to take up self-employment in agriculture, allied activities, industries, service, and business activities. Assistance is given through subsidies by the government and funded on a 50:50 basis by the centre and the state.
National Rural Employment Guarantee Act (NREGA):
It came into force in 2006. It was later modified as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on October 2, 2009. Indian labour law and social security measures guarantee the “right to work.” It was started to enhance the livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year. Applicants are entitled to an unemployment allowance if work is not provided within 15 days of applying. Recently, Finance Minister Arun Jaitley announced Rs- 48000cr for the MGNREGA.
National Maternity Benefit Scheme (NMBS):
It is for the family below the poverty line. States and union territories implemented it. It provides a sum of Rs-500 to a pregnant woman for the first two live births. It was later changed into Janani Suraksha Yojana with Rs. 1440 for every institutional birth.
National Old Age Pension Scheme (NOAPS):
To provide pension to old people, above the age of 65. Came into effect on 15 august 1995. Initially, 200 rupees per month were given, but later, it was changed to 500 rupees per the 2011-12 budgets.
Jawahar Gram Samridhi Yojana (JGSY):
It is a comprehensive version of the previously launched “Jawahar Rozgar Yojana (JRY)”. It started on 1 April 1999. The main objective is to develop rural areas, and the secondary objective is to give out sustained wage employment. This was only for those below the poverty line. It aims at providing gainful employment to rural poor by encouraging the setting up of self-employment ventures.
National Family Benefit Scheme (NFBS):
It started in August 1955 and was sponsored by the state government. Later it was transferred to the state sector scheme from 2002-03. It is under community and rural development. It provides a sum of 20,000 rupees to a person of a family who becomes the head of the family after the death of its primary breadwinner.
Annapurna:
It started in 1999-2000 by the central government. Rs.100cr was allocated during 2000-01. It mostly covers groups of “poorest of the poor” and “indigent senior citizens.”
Pradhan Mantri Awas Yojana - Gramin (PMAY-G):
It was started in 1999–2000. This scheme is aimed at creating housing for everyone. It aimed at creating 20 lakh housing units, of which 13 lakhs were in rural areas.
Aajeevika Grameen Express Yojana (AGEY):
It is a part of Deendayal Antyodaya Yojana - National Rural Livelihood Mission (DAY-NRLM). This will help to provide safe, affordable, and community-monitored rural transport services to connect remote villages with key services and amenities.
Providing supplementary wage employment
Even though some are already discussed above, let us discuss in terms of Employment Generation Schemes in India the following –
Swarnjayanti Gram Swarojgar Yojana (SGSY):
It started in 1999 for the self-employment of the rural poor. Later it became Integrated Rural Development Programme (IRDP). It aims at providing gainful employment to rural poor by encouraging the setting up of self-employment ventures.
Pradhan Mantri Gram Sadak Yojana (PMGSY):
The Hon’ble Prime Minister launched it on 25th December 2000. The primary focus of the programme is on the construction of new roads. It is proposed to connect about 1 lakh villages in the next seven years. Besides, upgradation (to prescribed standards) about 5 lakh kilometers of existing roads will be taken up under the Programme to achieve connectivity through a good all-weather road.
Swarna Jayanti Shahari Rozgar (SJSR):
It started on 1 December 1997. The aim is to employ urban unemployed and under-employed through the set up of self-employment ventures. It is centrally sponsored.
Prime Minister’s Employment Generation Programme (PMEGP):
To generate continuous and sustainable employment opportunities in rural and urban areas. It was announced on 15 August 2008 by Prime Minister (PM).
National Food for Work Programme (NFFWP):
It was started in 2001 to provide food through wage employment in the drought-affected areas in eight states.
Sampoorna Grameen Rozgar Yojana (SGRY):
It came into existence by merging Jawahar Gram Samridhi Yojana (JGSY) and Employment Assurance Scheme (EAS). It was launched in September 2001 to provide additional wage employment in rural areas.
Rural Landless Employment Guarantee Programme (RLEGP):
It was started in 1983. The aim was to provide employment to landless farmers and labourers.
Pradhan Mantri Kaushal Vikas Yojna (PMKVY):
On March 21, 2015, the cabinet cleared the scheme to provide skill training to 1.4 million youth with an overall outlay of Rs. 1120 crore. This plan is implemented with the help of the Ministry of Skill Development and Entrepreneurship through the National Skill Development Corporation. It will focus on the fresh entrants to the labour market, especially labour market and class X and XII dropouts.
Heritage City Development and Augmentation Yojana (HRIDAY):
HRIDAY scheme was launched on 21 January 2015. To preserve and rejuvenate the rich cultural heritage of the country.
Even though all-pervading problems like poverty cannot be removed suddenly, India remains a poor country despite our various development projects, plans, and programmes. Recently, the study “Rural Poverty Despite Growth” by G. S. Bhalla says that India’s post-reform economic trends present stagnation and poverty in the rural area despite remarkable overall economic growth.
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