Chapter: Poverty as a Challenge

Subject: Economics
Class: IX

Chapter-3: Poverty as a Challenge

(Notes)
Introduction
• Poverty can be defined as lack of daily requirements of livelihood like food, clothing, education
etc.
• The poor could be landless labourers in villages or people living in overcrowded jhuggis in urban
areas.
• Every 4th person in India is poor. India has the largest single concentration of the poor in the world.

Poverty as seen by Social scientists

(i) Social Exclusion - For analysis of poverty, social exclusion is very useful. As per this concept
poverty must be seen in terms of the poor living only in a poor surrounding with other poor
people.
(ii) Vulnerability - Vulnerability describes the greater probability of being more adversely affected
than other people, which is done due to earthquake or simply a fall in the availability of jobs.
• Measurement of vulnerability to poverty describe the greater probability of certain communities
i.e., members of a backward caste or individuals i.e. a widow or a physically handicapped person.
• Poverty Line: Poverty line is a way which is used to identify the poor. It is a method used to
measure poverty. In this method poverty is measured with the help of consumption and income
level of the people.
• If the level of income and consumption falls below the minimum level of income and consumption
of this line, then the person is considered to be poor.

Poverty Estimates
• Economic Survey 2011–12, Ministry of Finance, Government of India
The poverty ratio in the year 1973 is 55 per cent and 30 percent in 2009-10 which shows decline in
the poverty ratios. Poverty ratios further came down to about 26 per cent in 2000 and 36 per cent in
1994. Therefore, the poverty ratio is continuously decreased from 1974 to 2000.

• Vulnerable Groups
ü In India, proportion of people below poverty line is also not same for all social groups and
economic categories.
ü Scheduled caste and scheduled tribe households are vulnerable to poverty in social groups.
ü In same direction rural agricultural labour households and the urban casual labour households
are vulnerable to poverty in economic categories.

Global Poverty Scenario

World Development Indicators 2012, The World Bank
• Through huge investments in human resource development and rapid economic growth poverty is
substantially decreased in China and Southeast Asian countries.
• In China number of poor has come down from 85 percent in 1981 to 14 per cent in 2008.
• In Asian countries i.e. India, Sri Lanka, Bangladesh, Nepal, Bhutan, Pakistan despite decline in the
percentage of the poor the decline has not been rapid.
• In India, poverty is higher than the national estimates. It is done because of different poverty line
definition.
• In Latin America the ratio of poverty has declined from 11% in 1981 to 6.4 per cent in 2008.

Causes of Poverty
(i) Low growth rate - During the British colonial administration, the rate of growth was very low
which was the basic cause of poverty.
Chapter: Poverty as a Challenge
Subject: Economics
Class: IX

(ii) Discouragement of development of industries and handicrafts Products - It is one historical

reason of poverty. The policies of the colonial government discourage development of industries,
like textile industries which is the basic source of income of the poor. An uneducated person can
easily get job in this type of industries as labour and sustains his livelihood.
Discouragement of handicrafts Products is also a major cause of poverty, during the British
colonial administration. The households can easily earn money by the way of to produce
handicrafts products.
(iii) High growth rate of population - The population is increasing instead of low level of income
which becomes cause of poverty.
(iv) Huge income inequalities - There are huge income inequalities between have or have not. For
this term, huge income inequalities make it difficult to properly implement the poverty
elimination policies of government. Therefore, it is the major cause of poverty.
(v) Lack of land resources - Lack of land resources is the also major cause of poverty. Incomes of
the villagers are fully based on agriculture income and lack of land resources creates low level
of agriculture income which becomes the major cause of poverty.

Anti-Poverty Measures
Anti-poverty strategy of the government is based broadly on two plank:
(i) Promotion of economic growth
(ii) Targeted anti-poverty programmes

Promotion of economic growth

• According to official poverty estimation, the growth rate jumped from the average of about 3.5
percent a year in the 1970s to about 6 percent during the 1980s and 1990s. With the help of high
rate of growth, reduction of poverty is possible.
• It shows a link between poverty reduction and economic growth. Therefore, promotion of
economic growth helps to reduce poverty.

Targeted anti-poverty programmes

a) National Rural Employment Guarantee Act (NREGA) - It was launched in September 2005 and it
provides 100 days assured employment every year to every rural household in 200 districts. Later,
the scheme will be extended to 600 districts. One third of the proposed jobs would be reserved for
women. In this Act if an applicant is not provided employment within fifteen days, then he/she
will be entitled to a daily unemployment allowance. The central government and state governments
will also establish National Employment Guarantee Funds and State Employment Guarantee Funds
for implementation of the scheme.

b) Prime Minister Rojgar Yojana (PMRY) – It was launched on 2nd October, 1993. The objective of
the programme is to create self-employment opportunities for educated unemployed youth in rural
areas and small towns. It also helped in setting up small business and industries.

c) Swarnajayanti Gram Swarozgar Yojana (SGSY) - This programme was launched on 1st April,
1999. The objective of this programme is to help rural people to organize themselves into self help
groups by the way of promoting enterprises at the village level. This programme helps to exist
poor families above the poverty line. In this programme the government provides subsidy and bank
credit to the rural people for generating the income.

d) Rural Employment Generation Programme (REGP) - This programme was launched in 1995. The
target of this programme is to provide 25 lakh new jobs to the rural and small towns persons under
the Tenth Five Year plan.
Chapter: Poverty as a Challenge
Subject: Economics
Class: IX

e) Pradhan Mantri Gramodaya Yozana (PMGY) - This programme was launched in 2000. The
objective of this programme to develop standard of living of the rural people by the way of focus
in five critical areas i.e. primary health, primary education, rural shelter, rural drinking water and
rural electrification.

f) Sampoorna Grameen Rojgar Yojana (SGRY) - This programme was launched in September, 2001.
The Employment Assurance Schemes and JGSY would be merged with SGRY. The aim of the
programme is to provide wage employment and to create durable community, social and economic
assets.

The Challenges Ahead

• Poverty reduction remains India’s most compelling challenge despite the progress. Because of
unequal distribution of income, increase in population etc.
• The positive situation can be done by the way of higher economic growth, increasing stress on
universal free elementary education, declining population growth, increasing empowerment of the
women and the economically weaker sections of society, providing health care, education and job
security.
• Unemployment: Unemployment is a situation where a person have not job despite of he/she able
to do job. It is a big cause of poverty. Unemployment is also a situation of being joblessness when
people are in condition of without job and in situation of seeking job during recession.
• It is a sign of poverty, where an individual is unemployed. It is a loss of human resources to the
nation and stigma to the society.
• Child labour: Child labour is a situation where a child is employed for earning money. Which is
mentally, physically and socially dangerous and harmful for the children. Child labour is a basic
problem of poverty. Because of doing work, child can not be illiterate and he/she is unable to make
his/her future.
• The Child Labour (Prohibition and Regulation) Act, 1986 defines a child as any person who has
not completed his fourteenth year of age.
• According to International labour Organization (ILO), the term ‘child labour’ is often defined as
work that deprives children of their childhood, their potential and their dignity, and that is harmful
to physical and mental development.
• Illiteracy: Illiteracy is the condition where a person unable to read and write. In India Illiteracy is
a major problem of poverty.