URBAN ISSUES - POVERTY

Urban Poverty

Urban poverty is a form of poverty that is particularly visible in megacities and is characterised by substandard living conditions and income, inadequate provision of basic amenities, and a low quality of life. According to the NSSO survey reports, there are over 80 million people in the urban poor. Urban poverty differs from rural poverty in terms of its characteristics and causes.

Urban poverty in India is distinctive, particularly in the way it follows certain patterns of growth. Although the proportion of the urban poor has reportedly declined over the past decades, their absolute numbers continue to increase.

Urban poverty, in contrast to rural poverty, is complex and multifaceted, going beyond a lack of resources for consumption or income. Its many dimensions are related to the vulnerability of the poor due to their limited access to land and housing, physical infrastructure and services, sources of income and employment, health and education facilities, and social security networks, as well as their lack of voice and empowerment.

In most developing nations, urbanisation has been accompanied by the growth of slums and shelter deprivation, informality, worsening living conditions, increasing climate-change-related risks, and exclusionary urban forms. According to UN-Habitat, Asia has 60% of the world’s total slum population, while many more people live in slum-like conditions in areas that are officially designated as non-slums. Working poverty and informality are also high in Asian cities and towns. Recent years have witnessed increasing urban inequalities and stagnating consumption shares among lower-percentile households.

Urban poverty should not simply be understood as rural poverty that has moved to the city. The drivers of poverty differ in urban areas, and so do the forms of deprivation. The first important difference is the cost of living. A village household may grow some of its own food, gather fuelwood, and pay little or no rent. In contrast, a city household generally has to purchase most necessities, including rent, water, transportation, cooking gas, and, in many slums, even drinking water. Therefore, a wage that may appear adequate can still leave a family below the poverty line after accounting for the higher cost of living in cities. This is why “money-metric” poverty, based on monetary consumption, and “lived” poverty can differ significantly in urban areas.

The second factor is informality. Most of the urban poor work in the informal economy, including domestic work, street vending, gig-platform work, and daily-wage labour. Such employment often lacks written contracts, provident fund benefits, paid leave, and protection when demand declines. Although income is generated, it is often irregular, leaving households highly vulnerable to illness, job loss, and other crises.

The third factor is tenure insecurity. While rural households may possess at least a small piece of land, many of the urban poor live in informal settlements, squat on land, encroach on land, or rent informally. This creates a constant threat of eviction and discourages investment in improving their homes. Insecure tenure can also restrict access to formal credit because households may lack property to use as collateral.

The fourth factor is hidden poverty. Rural deprivation may be relatively visible across a village, whereas urban deprivation can exist alongside wealthier neighbourhoods. As a result, city-level averages may conceal the severe poverty experienced by particular communities. A municipal ward may have a relatively high average income even though a significant proportion of its residents live in slum conditions. Urban poverty is therefore concentrated and can remain less visible in overall statistics, which may affect how it is addressed through policy.

 

Major features of poverty in India

Poverty involves an infinite variety of circumstantial misfortunes experienced at both the household and societal levels. Poverty has many faces, changing from place to place and across time, and has been described in many ways. Extreme poverty sets in when household resources are insufficient to secure the essentials of dignified living. The very poor are those who can afford only one meal a day and depend exclusively on a single source of income. India is poorer than the USA, and within India, Bihar and Orissa are poorer than Punjab and Haryana. We might be aware of the poor those who have inadequate income, housing, clothing, etc. We also know that the definition and methods of measuring poverty differ from country to country.

Poverty is the syndrome of assetlessness, landlessness, joblessness, deprivation, and helplessness. It is not a pure economic phenomenon. It has social, cultural, political, historical, and geographical dimensions. There is a lack of livelihood security and food security. It is hunger, starvation, and vulnerability.

Poverty is a lack of shelter, a lack of education, and a lack of access to healthcare. Poverty is being sick and not being able to see a doctor. Poverty is not being able to go to school and not knowing how to read. Poverty is not having a job, fear for the future, and living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, a lack of representation, and a lack of freedom.

The picture of dire poverty is found in India, where the incidence of absolute poverty abounds. Absolute poverty is not related merely to the income or consumption level of the household but to some minimum standard of living. The concept of absolute poverty is relevant for less developed countries. To measure it, absolute norms for living are first established. It is expressed in terms of income or expenditure. A person falling below this norm, called the poverty line, is classified as poor.

In India, the poverty norm is defined in terms of daily food intake. According to the definition by the Planning Commission of India, the poverty line was drawn at an intake of 2,400 calories in rural areas and 2,100 calories in urban areas. If a person is unable to meet the minimum calorie intake, then he or she is considered to be living below the poverty line. The consumption basket representing this calorie intake is then converted into a monetary equivalent by using price indices separately for rural and urban areas.

Poverty has many faces, many causes, and many effects. It has several monetary and non-monetary dimensions and several manifestations. It is caused by several obstacles and constraints that reinforce one another. The following features characterise it:

a. Few assets, landlessness, and low income

b. Low consumption, no savings, and high indebtedness

c. Joblessness, employment insecurity, and food insecurity

d. Illiteracy and lack of formal education and training

e. Poor health, inadequate housing, and poor sanitation

f. Marginalisation and high dependency

h. Few contacts with key persons and institutions

i. Little involvement in influential forums

j. Competition for resources among the poor

k. Economic vulnerability and subordination

l. Low self-esteem, low social status, and resignation

m. Subsistence living and no future plan

 

Factors That Influence Poverty in Urban India

With respect to the mobility of the urban poor, because they live on the periphery of urban centres, a lack of mobility can lead to a loss of earnings due to transportation costs and time. Moreover, roads are insufficiently maintained and are not planned with pedestrians in mind; thus, the poor, who often use bicycles or walk on the roads, are at risk of becoming victims of traffic accidents. From the viewpoint of gender, costs due to transportation time can mean that women who also do housework lose employment opportunities more easily.

1. Mobility

With respect to the mobility of the urban poor, because they live on the periphery of urban centres, a lack of mobility can lead to loss of earnings due to transportation costs and time. Moreover, roads are insufficiently maintained and not planned with priority for pedestrians. Thus, the poor, who often use bicycles or walk on the roads, are at risk of becoming victims of traffic accidents. From the viewpoint of gender, costs due to transportation time can mean that women who also do housework lose employment opportunities more easily.

2. Employment

In both urban and rural areas, the poor lack sufficient employment opportunities that provide a stable income. More than 70% of the rural poor are engaged in agriculture, 48% as agricultural labourers and 28% self-employed. As for the urban poor, 44% are self-employed, 31% are casual labourers, and less than 20% are salaried workers. Compared with the data for 1993/94 and 1999/2000, the employment rate has decreased across India. During this period, there has been an increase in the percentage of agricultural labourers among the rural poor and in the percentage of self-employed and casual labourers among the urban poor.

In the background to this, the average annual growth rate of the labour force has exceeded 2.4%, and the labour market has not expanded sufficiently to absorb this growth. It can be said, therefore, that in rural areas the poor are engaged more often in agricultural labour at low or no wages. In contrast, in urban areas, the poor seek employment opportunities in the casual labour market. In India, employment opportunities in the informal sector are large; thus, to understand the real situation of poor households, it is necessary to examine not only official employment statistics in the formal sector but also the informal labour market.

3. Education

The level of education amongst the poor in India as a whole is low. It is remarkably low in rural areas and among women. According to data from the NSS (National Sample Survey) 1999/2000, the number of literate persons in rural BPL households is lower than the average for all rural areas, which is 560 persons per 1,000, and the disparity between the richest 5% and the poorest 5% is more than double. In urban areas, even among the poorest groups, the average is 515 persons per 1,000, and, as in rural areas, the disparity between the richest and the poorest is about double. The number of literate women per 1,000 is generally smaller than that of men. Gender disparity is more remarkable in rural than in urban areas, and it tends to be larger amongst poorer groups.

Reviewing the literacy rates in Assam, Bihar, Madhya Pradesh, Orissa, and Uttar Pradesh, which have high poverty headcount ratios, shows that their literacy rates are below that of India as a whole. In particular, the rate in Bihar is 47.5%, the lowest among the 15 major states, while Uttar Pradesh has the second-lowest rate at 57.4%. In Bihar, compared with the 1980s, the pace of improvement has been slower than in other states.

4. Health

According to the World Bank “World Development Indicator,” the mortality rate of children under 5 years in the poorest 20% quintile consumption group is three times as high as that of the richest 20% group. This seems to be attributable to disparities in access to health services and to nutritional status. Compared with data from 1992/1993, the child immunisation rate has improved; however, disparities between quintile groups have widened. The ratio of births attended by technical staff is 16% for the poorest group, which indicates a high risk in giving birth. Contraceptive use is prevalent amongst about half of the poorest group, much less in comparison with that of the richest group, which shows a higher risk of infection of sexually transmitted diseases, including HIV/AIDS.

Reviewing the health indicators in each state, the higher the poverty headcount ratio of the state, the higher the infant mortality rate and the shorter life expectancy at birth. Overall, rural areas have a higher infant mortality rate than urban areas. In particular, Uttar Pradesh, Rajasthan, Orissa, and Madhya Pradesh have higher indicators than average for India as a whole in both rural and urban areas. On the other hand, the state government of Kerala, having implemented programmes to improve the social sectors of education and health care, has managed to drastically reduce the infant mortality rate. It can be seen, therefore, that the rural poor have particularly limited access to health and medical services, and, as a result, health indicators have not improved much, implying that the health situation is difficult for the poor.

It can be seen, therefore, that the rural poor have particularly limited access to health and medical services, and, as a result, health indicators have not improved much, implying that the health situation is difficult for the poor.

Nature of urban poverty in India

Poverty in India has been largely a rural phenomenon, with more than three-fourths of the poor located in rural areas. Moreover, the share of the poor population in rural areas has been higher than their share of the population. However, recent trends in poverty indicate that this may no longer be the case, with rural areas accounting for as much as their share of the population. Along with increasing urbanisation of the population, this is primarily due to the differential rates of poverty decline in rural and urban areas, with rural areas showing a faster decline than urban areas.

Between 1983 and 1993-94 (roughly representing the pre-reform decade), rural poverty declined at 0.97 % points per year, and urban poverty at 0.87 % points per year. Compared with this decade, the rate of decline in urban poverty slowed further in the next decade, that is, between 1993-94 and 2004-05. Between 1993-94 and 2004-05, while rural poverty declined at 0.84% per annum, urban poverty declined at only 0.58% per annum. Compared to 1983, when rural poverty was 5-6% higher than urban poverty, by 2004-05, the latest year for which estimates are available, the rural poverty ratio was only marginally higher, by 0.9%, than the urban poverty ratio. That is, in the twenty-one and a half years since 1983, while rural poverty declined by 19.4%, urban poverty declined by only 15.5% by the Mixed Reference Period. Quite clearly, increasing urbanisation has also been accompanied by urbanisation of poverty in India. And, importantly, the pace of urbanisation of poverty seems to have increased in the 1990s compared to the 1980s.

It is thus clear that urban areas differ not only in the magnitude of poverty and inequality, but also in their behaviour over time. Despite the problems associated with using uniform poverty lines for all urban areas, the fact remains that small and medium towns have led the decline in urban poverty since the 1990s. This trend is not only the opposite of the trend seen in the previous period, but also suggests the growing importance of small and medium towns for poverty reduction in urban areas. Partly, the differential behaviour of towns of different sizes can be attributed to their heterogeneity in characteristics. In this context, to understand the differential response to poverty reduction across towns of different sizes, we examine some indicators. However, the level of disaggregation based on population size is not a comprehensive measure of understanding the heterogeneous nature of the urban growth in India. In fact, the slum areas in large cities and medium-sized towns are prime examples of the dualistic nature of urban growth. However, the categorisation adopted here is a fairly good indicator of the nature of social and economic differentiation of urban areas with different population sizes.