Poverty As a Challenge

"A general scarcity of basic necessities of life is called poverty. Income and level of consumption are the usual indicators of poverty. But many social scientists view poverty from many other parameters, like illiteracy, lack of general resistance due to malnutrition, lack of access to safe drinking water and sanitation, etc."

1.0Introduction

In our daily life, we come across many people who we think are poor. They could be landless labourers in villages or people living in overcrowded jhuggis in cities. We see poverty all around us. In fact, every fifth person in India is poor. This means, roughly 270 million for ( 27 crore) people in India live in poverty. This also means that India has the largest single concentration of the poor in the world. This illustrates the seriousness of the challenge.

Poverty is a situation in which parents are not able to send their children to school or a situation where sick people cannot afford treatment. Poverty also means lack of clean water and sanitation facilities. It also means lack of a regular job at a minimum decent level. Above all it means living with a sense of helplessness. Poor people are in a situation in which they are ill-treated at almost every place, in farms, factories, government offices, hospitals, railway stations etc. Obviously, nobody would like to live in poverty. One of the biggest challenges of independent India has been to bring millions of its people out of abject poverty. Mahatma Gandhi always insisted that India would be truly independent only when the poorest of its people become free of human suffering.

2.0Poverty as seen by social scientists.

• Usually, the indicators used relate to the levels of income and consumption.
• But now poverty is looked through other social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation etc.
• Analysis of poverty based on social exclusion and vulnerability is now becoming very common.

(a) Social exclusion:

(b) Vulnerability:

Further, it is analysed on the basis of the greater risks these groups face at the time of natural disasters (earthquakes, tsunami), terrorism etc. Additional analysis is made of their social and economic ability to handle these risks. In fact, vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs.

3.0Poverty line

• A common method used to measure poverty is based on the income or consumption levels.
• A person is considered poor if his or her income or consumption level falls below a given "minimum level" necessary to fulfil basic needs.
• Poverty line may vary with time and place.
• Each country uses an imaginary line that is considered appropriate for its existing level of development and its accepted minimum social norms. For example, a person not having a car in the United States may be considered poor. In India, owning of a car is still considered a luxury.
• While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement etc. are determined for subsistence.
• These physical quantities are multiplied by their prices in rupees. The present formula for food requirement while estimating the poverty line is based on the desired calorie requirement.
• Food items, such as cereals, pulses, vegetable, milk, oil, sugar, etc., together provide these needed calories. The calorie needs vary depending on age, sex, and the type of work that a person does.
• The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.
• Since people living in rural areas engage themselves in more physical work, calorie requirements in rural areas are considered to be higher than in urban areas.
• The monetary expenditure per capita needed for buying these calorie requirements in terms of food grains, etc., is revised periodically taking into consideration the rise in prices.
• On the basis of these calculations, for the year 2011-12, the poverty line for a person was fixed at Rs 816 per month for the rural areas and Rs. 1000 for the urban areas.
• Despite less calorie requirement the higher amount for urban areas has been fixed because of high prices of many essential products in urban centres.
• In the year 2011-12 family of 5 people living in rural area and earning Rs. 4,080 per month will be considered as BPL and similarly in Urban Areas it is Rs. 5000 per month to meet their basic requirements.
• The poverty line is estimated periodically (normally every five years) by conducting sample surveys. These surveys are carried out by the National Sample Survey Organisation (NSSO).
• However, for making comparisons between developing countries, many international organisations like the World Bank use a uniform standard for the poverty line : minimum availability of the equivalent of \ 1.90$ per person per day (2011).
  

4.0Poverty estimates

It is clear from Table that there is a substantial decline in poverty ratios in India from about 45 per cent in 1993-94 to 37.2 per cent in 2004-05. The proportion of people below poverty line further came down to about 22 per cent in 2011-12. If the trend continues, people below poverty line may come down to less than 20 per cent in the next few years. Although the percentage of people living under poverty declined in the earlier two decades (1973-1993), the number of poor declined from 407 million in 2004-05 to 270 million in 2011-12 with an average annual decline of 2.2 percentage points during 2004-05 to 2011-12.

Estimates of Poverty in India (Tendulkar Methodology)

5.0Vulnerable groups

• The proportion of people below poverty line is also not same for all social groups and economic categories in India.
• Social groups which are most vulnerable to poverty are scheduled caste and scheduled tribe households.
• Similarly, among the economic groups, the most vulnerable groups are the rural agricultural labour households and the urban casual labour households.
• Although the average for people below poverty line for all groups in India is 22.43 out of 100 people belonging to scheduled tribes are not able to meet their basic need.
• Similarly, 34 per cent of casual workers in urban areas are below poverty line.
• About 34 per cent of casual labour farm (in rural areas) and 29 per cent of Scheduled Castes are also poor.
• The double disadvantage, of being a landless casual wage labour household in the socially disadvantaged social groups of the scheduled caste or the scheduled tribe population highlights the seriousness of the problem.
• Some recent studies have shown that except for the scheduled tribe households, all the other three groups (i.e., scheduled castes, rural agricultural labourers and the urban casual labour households) have seen a decline in poverty in the 1990s. Apart from these social groups, there is also inequality of incomes within a family. In poor families all suffer, but some suffer more than others. In some cases, women, elderly people and female infants are denied equal access to resources available to the family.
  
  Poverty in India 2000: Most Vulnerable Groups

6.0Inter-State disparities

• Poverty in India also has another aspect or dimension.
• The proportion of poor people is not the same in every state.
• Although state level poverty has witnessed a secular decline from the levels of early seventies, the success rate of reducing poverty varies from state to state. Recent estimates show while all India Head Count Ratio (HCR) was 21.9 per cent in 2011-12 states like Madhya Pradesh, Assam, Uttar Pradesh, Bihar and Odisha had above all India poverty level.
• Bihar and Odisha continue to be the two poorest states with poverty ratios of 33.7 and 32.6 per cent respectively.
• Along with rural poverty, urban poverty is also high in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh.
• In comparison, there has been a significant decline in poverty in Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal.
• States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates.
• Kerala has focused more on human resource development.
• In West Bengal, land reform measures have helped in reducing poverty.
• In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement.

7.0Global poverty scenario

• The proportion of people in different countries living in extreme economic poverty-defined by the World Bank as living on less than \ 1.90$ per day—has fallen from 36 per cent in 1990 to 10 per cent in 2015. Although there has been a substantial reduction in global poverty, it is marked with great regional differences.
• Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development. Number of poors in China has come down from $88.3\%$ in 1981 to $14.7\%$ in 2008 to $0.6\%$ in 2019. In the countries of South Asia (India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan) the decline has also been rapid $34\%$ in 2005 to $15.2\%$ in 2014 . With decline in the percentage of poor, the number of poor has also declined significantly from 510.4 million in 2005 to 274.5 million in 2013.
• In Sub-Saharan Africa, poverty in fact declined from 51 per cent to 2005 to 40.2 per cent in 2018.
• In Latin America, the ratio of poverty declined from $10\%$ in 2005 to $4\%$ in 2018. Poverty has also resurfaced in some of the former socialist countries like Russia, where officially it was non-existent earlier. The new sustainable development goals of the United Nations (UN) proposes ending poverty of all types by 2030 .

Poverty: Comparison among some Selected Countries

8.0Causes of poverty

There were a number of causes for the widespread poverty in India.

• One historical reason is the low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles. The low rate of growth persisted until the nineteen eighties. This resulted in less job opportunities and low growth rate of incomes.
  
  This was accompanied by a high growth rate of population. The two combined to make the growth rate of per capita income very low. The failure at both the fronts: promotion of economic growth and population control perpetuated the cycle of poverty.
• With the spread of Irrigation and the Green Revolution, many job opportunities were created in the agriculture sector. But the effects were limited to some parts of India.
• The industries, both in the public and the private sector, did provide some jobs. But these were not enough to absorb all the job seekers, unable to find proper jobs in cities, many people started working as rickshaw pullers. vendors, construction workers, domestic servants etc.
• With Irregular small incomes, these people could not afford expensive housing. They started living in slums on the outskirts of the cities and the problems of poverty, largely a rural phenomenon also became the feature of the urban sector.
• Another feature of high poverty rates has been the huge income inequalities. One of the major reasons for this is the unequal distribution of land and other resources.
• Despite many policies, we have not been able to tackle the issue in a meaningful manner.
• Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments.
• Since lack of land resources has been one of the major causes of poverty in India, proper implementation of policy could have improved the life of millions of rural poor.
• Many other socio-cultural and economic factors also are responsible for poverty. In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money.
• Small farmers need money to buy agricultural inputs like seeds, fertilizers, pesticides etc.
• Since poor people hardly have any savings, they borrow. Unable to repay because of poverty, they become victims of indebtedness. So, the high level of indebtedness is both the cause and effect of poverty.

9.0Anti-poverty measures

Removal of poverty has been one of the major objectives of Indian developmental strategy.

• The current anti-poverty strategy of the government is based broadly on two planks (1) promotion of economic growth (2) targeted anti-poverty programmes.
• Over a period of thirty years lasting up to the early eighties, there were little per capita income growth and not much reduction in poverty.
• Official poverty estimates which were about 45 per cent in the early 1950 s remained the same even in the early eighties.
• Since the eighties, India's economic growth has been one of the fastest in the world.
• The growth rate jumped from the average of about 3.5 per cent a year in the 1970 s to about 6 per cent during the 1980s and 1990s.
• The higher growth rates have helped significantly in the reduction of poverty.
• Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction.
• Economic growth widens opportunities and provides the resources needed to invest in human development.
• This also encourages people to send their children, including the girl child, to schools in hope of getting better economic returns from investing in education. However, the poor may not be able to take direct advantage from the opportunities created by economic growth. Moreover, growth in the agriculture sector is much below expectations. This has a direct bearing on poverty as a large number of poor people live in villages and are dependent on agriculture.

10.0Anti-poverty programmes

There is a clear need for targeted anti-poverty programmes. Although there are so many schemes which are formulated to affect poverty directly or indirectly, some of them, are worth mentioning.

• Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) 2005 aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas. It also aimed at sustainable development to address the cause of draught, deforestation and soil erosion. One-third of the proposed jobs have been reserved for women. The scheme provided employment to 220 crores person days of employment to 4.78 crore households.
• The share of SC, ST, Women person days in the scheme are 23 per cent, 17 per cent and 53 per cent respectively. The average wage has increased from 65 in 2006-07 to 132 in 2013-14. Recently, in March 2018, the wage rate for unskilled manual workers has been revised, state wise, the range of wage rate for different states and union territories lies in between 281 per day (for the workers in Haryana) to 168 per day (for the workers of Bihar and Jharkhand).
  
• The Prime Minister Rozgar Yojana (PMRY) is another scheme which was started in 1993. The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries.
• Rural Employment Generation Programme (REGP) was launched in 1995. The aim of the programme is to create self-employment opportunities in rural areas and small towns. A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan.
• Swarna Jayanti Gram Swarozgar Yojana (SGSY) was launched in 1999. The programme aims at bringing the assisted poor families above the poverty line by organising them into selfhelp groups through a mix of bank credit and government subsidy.
• Under the Pradhan Mantri Gramodaya Yojana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.
• Another important scheme is Antyodaya Anna Yojana (AAY) launched in 2000.

The results of these programmes have been mixed. One of the major reasons for less effectiveness is the lack of proper implementation and right targeting. Moreover, there has been a lot of overlapping of schemes. Despite good intentions, the benefits of these schemes are not fully reached to the deserving poor. Therefore, the major emphasis in recent years is on proper monitoring of all the poverty alleviation programmes.

11.0The challenges ahead

Poverty has certainly declined in India. But despite the progress, poverty reduction remains India's most compelling challenge. Wide disparities in poverty are visible between rural and urban areas and among different states. Certain social and economic groups are more vulnerable to poverty. Poverty reduction is expected to make better progress is expected to make better progress in the next ten to fifteen years. This would be possible mainly due to 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.

12.0Glossary

• Absolute Poverty - It refers to the total number of people living below the poverty line.
• Relative poverty - It refers to the poverty of people in relation to other people, regions or nations.
• Poverty line - It is the level of income that divides the population as poor and non-poor. It is drawn on the basis of minimum consumption expenditure.
• Social exclusion - It is the state of living in very poor condition and excluded from facilities, benefits and opportunities that others enjoy.
• Vulnerability - It describes the level of poverty when people have a greater probability of being adversely affected than other people of the time of natural disasters.

13.0MIND MAP