Economics Learning Room Class 9th

Date:09-Nov-24 (Notes)
Poverty as a Challenge
1. Introduction
• Definition of Poverty: Poverty is a state where individuals lack access to essential resources required for a basic
standard of living. This includes inadequate food, shelter, and access to healthcare and education.
• Importance of Studying Poverty: Understanding poverty is crucial for designing effective policies and
measures to improve the quality of life for the disadvantaged and achieve equitable economic development.
2. Poverty as Seen by Social Scientists
• Concept of Poverty: Social scientists view poverty as a multidimensional issue that affects various aspects of
life including economic, social, and psychological factors.
• Income and Non-Income Measures: While income is a critical factor in determining poverty, social scientists
also consider access to services, social exclusion, and living conditions as part of poverty analysis.
3. Poverty Estimates
• Methods of Estimation: Poverty estimates are derived from surveys and data collection on income,
consumption, and living conditions. Common methods include income-based measures and consumption-based
measures.
• Data Sources: Governments and research organisations conduct surveys such as the National Sample Survey
(NSS) and Household Consumer Expenditure Survey to gather data for estimating poverty.
4. Global Poverty Scenario
• Current Status: Global poverty has seen significant reductions over the years, but it remains a major issue in
many developing countries.
• Regional Disparities: Poverty levels vary significantly across regions, with sub-Saharan Africa and South Asia
having some of the highest poverty rates.
5. The Challenges Ahead
• Addressing Inequality: Reducing disparities between different socio-economic groups is crucial for effective
poverty reduction.
• Ensuring Effective Implementation: Ensuring that anti-poverty measures are effectively implemented and
reach the intended beneficiaries is a significant challenge.
• Sustainable Development: Balancing economic growth with environmental sustainability and social equity is
necessary to create lasting solutions to poverty.
6. Poverty Line
• To measure poverty, a common method is generally used which is based on income & consumption levels. If a
person is unable to satisfy his/her basic needs then he or she is considered as poor. Poverty line also varies with time and
place. For each country, the poverty line is considered different.
• Basic amenities like food requirements, clothing, footwear, fuel, education, light & the medical requirements are
determined for measuring poverty. Food items like cereals, pulses, vegetables, oil, and sugar together provide calories to
the body. Calorie requirement varies with age, sex, and type of work that a person does. In India, the average calorie
requirement is 2400 calories/day in rural areas and 2100 calories/day in urban areas. People living in rural areas are also
associated with more heavy physical work hence the calorie requirement is higher in people living in rural areas in
comparison to urban areas. The National Sample Survey Organisation (NSSO) is responsible for doing surveys to
determine the standard of the poverty line in the country.
7. Vulnerable Groups in India
• The proportion of people who are below the poverty line is not equal for all the social groups & economic
categories in the country. Some groups are more vulnerable than others. These are Scheduled Castes and the Scheduled
Tribe households. Also, among the economic groups, agricultural labourers & the urban casual labours are more
vulnerable. In India, out of 100 poor people, 43 of them are of Scheduled Tribes. 34% of casual urban workers are also
below the poverty line. 23% percent of the Scheduled Castes community are also poor.
• Recent studies have shown that except for Scheduled Tribe households the other groups of Scheduled Castes,
rural agricultural labourers, and the urban casual labourers have seen a decline in poverty since 1990. In poor families,
some people also suffer more than others. In some cases, women, female infants, and elderly people are denied equal
access to resources available to the family.
8. Interstate Disparities in Poverty Levels
• Not every state in the country has the same proportion of poor people. The success rate of poverty reduction
since the early seventies generally varies from state to state.
• The all-India headcount ratio is 21.9% in states like Madhya Pradesh, Uttar Pradesh, Assam, Bihar & Orissa.
This was also lower than the all-India poverty levels in the year 2011-12. To date, Bihar and Orissa are the two of the
poorest states having poverty ratios of 33.7 and 32.6. However, there has been a good decline of poverty in the states of
Maharashtra, Kerala, Andhra Pradesh, Tamil Nadu, Gujarat & West Bengal. The states of Haryana and Punjab have also
succeeded in poverty reduction with the help of high agricultural growth. Kerala has focused on human resource
development.
• In West Bengal, land reform measures had been undertaken which helped in poverty reduction. Andhra Pradesh
& Tamil Nadu had distributed food grains amongst the public which reduced the poverty levels.
9. Causes of Poverty
There are various reasons for the prevalence of widespread poverty in India. Some of these are:
• Economic exploitation under British colonial rule can be seen as one of the reasons. The policies of the British
government ruined traditional cottage, handicrafts & textile industries. The low growth rate was also persistent till the
1980s. There were low job opportunities and incomes accompanied by high population growth. The growth rate per
capita income was also extremely low.
• With the dawn of the Green Revolution in the country, new job opportunities were created also in the
agricultural sector. The problem with this was that it was limited to some parts of the country. There were industries in
the public & private sectors which provided some jobs but were unable to provide jobs to all the seekers. People who
were unable to find proper jobs started working as construction workers, vendors,
• housing and hence started living in slums.
• Another reason for this high poverty rate in the country has been huge income inequalities. This was because of
the unequal distribution of land & resources. In India, there is also a lack of proper land resources and this has also been
a major cause of poverty.
• Proper implementation of government policies will improve the conditions of poverty-stricken people.
• Farmers in the country also require money to buy agricultural inputs like fertilisers, pesticides, seeds, etc. They
used to borrow money which they were then unable to repay because of poverty. When they are unable to repay the loan,
they become victims of indebtedness which is both a cause and effect of poverty.
• Money is then spent in the country by both the poor and the non-poor to fulfil social and religious obligations
and ceremonies. This spent money could be used for something else in a meaningful manner.
10. Anti-Poverty Measures
Presently, the anti-poverty scheme has two parts to it. First is the promotion of economic growth and second is targeted
anti-poverty programmes. Since 1980 India's economic growth has been one of the fastest in the world. Economic
growth and poverty reduction are associated with each other. There were some schemes formulated aimed at reducing
poverty. These are-
• The MGNREGA or Rural Employment Act of 2005 - This act provided 100 days of wage employment to
every household in rural areas to ensure their livelihood security. It proposed that one-third of job vacancies would be
reserved for women. It aimed to manage situations of deforestation, drought, and soil erosion.
• Pradhan Mantri Gramodaya Yojana of 2000 was started to assist states with services like primary health and
education, rural shelter, rural drinking water, and rural electrification.
• In 1999, the Swarna Jayanti Gram Swarozgar Yojana was also started which aimed to assist low-income
families in coming above the poverty line by organising them into self- reliant groups by the help of bank credit and
government subsidy.

• Rural Employment Generation Programme - Launched in 1995 to create self-employment opportunities in

the small towns, and rural areas.
• In 1993, the Prime Minister Rozgar Yojana was launched. This initiative aimed to create as well as provide
employment opportunities in rural areas and small towns.
11. Upcoming Challenges
The poverty rate in India has been declining but it remains a challenge. It is expected that poverty reduction will make
better progress in the upcoming years. Economic growth, free elementary education, a declining population, and
empowered women will help in reducing poverty levels in the country.