Poverty in India

Poverty is the state of one who lacks a certain amount of material possessions or money. Absolute poverty or destitution refers to being unable to afford basic human needs, which commonly includes clean and fresh water , nutrition , health care, education , clothing and shelter. About 1.7 billion people are estimated to live in absolute poverty today. Relative poverty refers to lacking a usual or socially acceptable level of resources or income as compared with others within a society or country. For most of history poverty had been mostly accepted as inevitable as traditional modes of production were insufficient to give an entire population a comfortable standard of living. After the industrial revolution, mass production factories made wealth increasingly more inexpensive and accessible. Of more importance is the modernization of agriculture, such as fertilizers in order to provide enough yield to feed the population. The supply of basic needs can be restricted by constraints on government services such as corruption, debt and loan conditionalities and by the brain drain of health care and educational professionals. Strategies of increasing income to make basic needs more affordable typically include welfare accommodating business regulations and providing financial services . Today, poverty reduction is a major goal and issue for many international organizations such as the United Nations and the World Bank. The country may boast a meteoric 9% GDP growth rate, its impact on poverty in India has been inconsistent, especially in rural areas where 70% of Indias 1.2 billion people live. Its one of the fastest growing economy in the world and yet its riches are hardly redistributed across the population. It spends only 1% of its GDP on health, which is twice less than China whos already planning on increasing that by a lot more (ok, 3 to 4% if you insist). And since you do insist, know that Russia and Brazil's spending on health are around 3.5% of GDP.

But the government is well aware that poverty in India is a giant barrier it has to overcome if it is to develop the nation for good. Hence a wide range of anti-poverty policies have been introduced since the 1950s, which nonetheless started to prove effective only 20 years later. If the decline in poverty went from 60% to 35% between the 70s and the early 90s, globalization and liberalization policies made this trend go backward for a while.

Poverty in India is still so high.

Definitions
Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow ones food or a job to earn ones living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation. United Nations Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better ones life. World BankLife expectancy has been increasing and converging for most of the world. SubSaharan Africa has recently seen a decline, partly related to the AIDS Epidemic. Graph

shows the years 1950-2005.

Percentage of people living on less than $1 a day from 1981-2001

Absolute poverty
Absolute poverty refers to a set standard which is consistent over time and between countries. The World Bank defines extreme poverty as living on less than US $1.25 per day, and moderate poverty as less than $2 a day (but note that a person or family with access to subsistence resources, e.g. subsistence farmers, may have a low cash income without a correspondingly low standard of living - they are not living "on" their cash income but using it as a top up). It estimates that "in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day." A dollar a day, in nations that do not use the U.S. Dollar as currency, does not translate to living a day on the amount of local currency as determined by the exchange rate. Rather, it is determined by the Purchasing power parity which would look at how much local currency is needed to buy the same things that a dollar could buy in the United Nations. Usually, this would translate to less local currency than the exchange rate in poorer countries as the United States is a more expensive country. Six million children die of hunger every year - 17,000 every day. Selective Primary Health Care has been shown to be one of the most efficient ways in which absolute poverty can be eradicated in comparison to Primary Health Care which has a target of treating diseases. Disease prevention is the focus of Selective Primary Health Care which puts this system on higher grounds in terms of preventing malnutrition and illness, thus putting an end to Absolute Poverty. The proportion of the developing world's population living in extreme economic poverty fell from 28 percent in 1990 to 21 percent in 2001. Most of this improvement has occurred in
East and South Asia. In East Asia the World Bank reported that "The poverty headcount rate at

the $2-a-day level is estimated to have fallen to about 27 percent [in 2007], down from 29.5 percent in 2006 and 69 percent in 1990." In Sub Saharan African extreme poverty went up from 41 percent in 1981 to 46 percent in 2001, which combined with growing population increased the number of people living in extreme poverty from 231 million to 318 million. In the early 1990s some of the transition economies of Eastern Europe and Central Asia experienced a sharp drop in income. The collapse of the Soviet Union resulted in large declines in GDP per capita, of about 30 to 35% between 1990 and the trough year of 1998 (when it was at its minimum). As a result poverty rates also increased although in subsequent years as per capita incomes recovered the poverty rate dropped from 31.4% of the population

to 19.6%The World Bank issued a report predicting that between 2007 and 2027 the populations of Georgia and Ukraine will decrease by 17% and 24% respectively. There are various criticisms of these measurements. Shaohua Chen and Martin Ravallion note that although "a clear trend decline in the percentage of people who are absolutely poor is evident ... with uneven progress across regions...the developing world outside China and India has seen little or no sustained progress in reducing the number of poor". Since the world's population is increasing, a constant number living in poverty would be associated with a diminishing proportion. Looking at the percentage living on less than $1/day, and if excluding China and India, then this percentage has decreased from 31.35% to 20.70% between 1981 and 2004. The 2007 World Bank report "Global Economic Prospects" predicts that in 2030 the number living on less than the equivalent of $1 a day will fall by half, to about 550 million. An average resident of what we used to call the Third World will live about as well as do residents of the Czech or Slovak republics today. Much of Africa will have difficulty keeping pace with the rest of the developing world and even if conditions there improve in absolute terms, the report warns, Africa in 2030 will be home to a larger proportion of the world's poorest people than it is today.

Relative poverty
Relative poverty views poverty as socially defined and dependent on social context, hence relative poverty is a measure of income inequality. Usually, relative poverty is measured as the percentage of population with income less than some fixed proportion of median income. There are several other different income inequality matrices. Relative poverty measures are used as official poverty rates in several developed countries. As such these poverty statistics measure inequality rather than material deprivation or hardship. The measurements are usually based on a person's yearly income and frequently take no account of total wealth. The main poverty line used in the OECD and the European Union is based on "economic distance", a level of income set at 60% of the median household income.

Other aspects
Economic aspects of poverty focus on material needs, typically including the necessities of daily living, such as food, clothing, shelter, or safe drinking water. Poverty in this sense may be understood as a condition in which a person or community is lacking in the basic needs for

a minimum standard of well-being and life, particularly as a result of a persistent lack of income. Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished "capability" of people to live the kinds of lives they value. The social aspects of poverty may include lack of access to education , health care or political power. Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society. Such social exclusion can be minimized through strengthened connections with the mainstream, such as through the provision of relational care to those who are experiencing poverty. The World Bank's "Voices of the Poor," based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include:

Precarious livelihoods Excluded locations Physical limitations Gender relationships Problems in social relationships Lack of security Abuse by those in power Dis-empowering institutions Limited capabilities Weak community organizations

David Moore, in his book The World Bank, argues that some analysis of poverty reflect pejorative, sometimes racial, stereotypes of impoverished people as powerless victims and passive recipients of aid programs. Ultra-poverty, a term apparently coined by Michael Lipton connotes being amongst poorest of the poor in low-income countries. Lipton defined ultra-poverty as receiving less than 80 percent of minimum caloric intake whilst spending more than 80% of income on food.

Characteristics
The effects of poverty may also be causes, as listed above, thus creating a "poverty cycle" operating across multiple levels, individual, local, national and global.

Health
One third of deaths - some 18 million people a year or 50,000 per day - are due to povertyrelated causes: in total 270 million people, most of them women and children, have died as a result of poverty since 1990. Those living in poverty suffer disproportionately from hunger or even starvation and disease. Those living in poverty suffer lower life expectancy . According to the World health Organization , hunger and malnutrition are the single gravest threats to the world's public health and malnutrition is by far the biggest contributor to child morality present in half of all cases.

Hunger

Rises in the cost of living make poor people less able to afford items. Poor people spend a greater portion of their budgets on food than richer people. As a result, poor households and those near the poverty threshold can be particularly vulnerable to increases in food prices. For example, in late 2007 increases in the price of grains .led to food riots in some countries. The World Bank warned that 100 million people were at risk of sinking deeper into poverty. Threats to the supply of food may also be caused by drought and the water crises. Intensive fields often leads to a vicious cycle of exhaustion of soil fertility and decline of agricultural yields. Approximately 40% of the world's agricultural land is seriously degraded .In Africa, , if current trends of soil degradation continue, the continent might be able to feed just 25% of its population by 2025, according to united nations university's Ghana-based Institute for Natural Resources in Africa. Every year nearly 11 million children living in poverty die before their fifth birthday. 1.02 billion people go to bed hungry every night. According to the
Global hunger index, south asia has the highest child malnutrition rate of the world's regions.

Nearly half of all. Indian children are undernourished, one of the highest rates in the world and nearly double the rate of Sub Saharan African. Every year, more than half a million women die in pregnancy or childbirth Almost 90% of maternal deaths occur in Asia and subSaharan Africa, compared to less than 1% in the developed world. Women who have born children into poverty may not be able to nourish the children efficiently and provide adequate care in infancy. The children may also suffer from disease that has been passed down to the child through birth. Asthma and rickets are common problems children acquire when born into poverty.

Education
Research has found that there is a high risk of educational underachievement for children who are from low-income housing circumstances. This often is a process that begins in primary school for some less fortunate children. Instruction in the US educational system, as well as in most other countries, tends to be geared towards those students who come from more advantaged backgrounds. As a result, these children are at a higher risk than other children for retention in their grade, special placements during the school's hours and even not completing their high school education. There are indeed many explanations for why students tend to drop out of school. For children with low resources, the risk factors are similar to others such as juvenile delinquency rates, higher levels of teenage pregnancy, and the economic dependency upon their low income parent or parents. Families and society who submit low levels of investment in the education and development of less fortunate children end up with less favorable results for the children who see a life of parental employment reduction and low wages. Higher rates of early childbearing with all the connected risks to family, health and well-being are majorly important issues to address since education from preschool to high school are both identifiably meaningful in a life. Poverty often drastically affects children's success in school. A child's "home activities, preferences, mannerisms" must align with the world and in the cases that they do not these students are at a disadvantage in the school and most importantly the classroom. Therefore, it is safe to state that children who live at or below the poverty level will have far less success educationally than children who live above the poverty line. Poor children have a great deal less healthcare and this ultimately results in many absences from the academic year. Additionally, poor children are much more likely to suffer from hunger, fatigue, irritability, headaches, ear infections, flu, and colds. These illnesses could potentially restrict a child or student's focus and concentration.

Housing

Poverty increases the risk of homelessness. Slum-dwellers, who make up a third of the world's urban population, live in a poverty no better, if not worse, than rural people, who are the traditional focus of the poverty in the developing world, according to a report by the United Nations. There are over 100 million street children worldwide. Most of the children living in institutions around the world have a surviving parent or close relative, and they most commonly entered orphanages because of poverty. Experts and child advocates maintain that orphanages are expensive and often harm children's development by separating them from their families. It is speculated that, flush with money, orphanages are increasing and push for children to join even though demographic data show that even the poorest extended families usually take in children whose parents have died.

Violence
According to experts, many women become victims of trafficking, the most common form of which is prostitution, as a means of survival and economic desperation. Deterioration of living conditions can often compel children to abandon school in order to contribute to the family income, putting them at risk of being exploited, according to ECPAT International, an NGO designed to end the commercial sexual exploitation of children. For example, in Zimbabwe, a number of girls are turning to prostitution for food to survive because of the increasing poverty. In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide. 51% of fifth graders from New Orleans (median income for a household: $27,133) have been found to be victims of violence, compared to 32% in Washington, DC (mean income for a household: $40,127).

Types of Poverty

Non income poverty happens when people may have a little bit of money but otherwise
the quality of their life is not good. They do not have access to affordable social and physical services (schooling, health care, medicines, safe water, good sanitation, good transport) and they may not feel safe in their homes either because they cannot trust the authorities or because they belong to some particularly vulnerable group The best way to reduce non-income poverty it to make sure that people have access to affordable and good quality social services and infrastructure, that they feel secure in their homes, that they trust the authorities and, if they are vulnerable, that there are safety net programmes to protect them

Income poverty happens when a household takes in less than one US dollar per day. This
means that people will not have enough food or medicine and they will have poor clothes and houses. Income poverty is due to people not having access to money or other assets. If people do not have any other assets like land to grow their own food, then income poverty can result in stunted growth and early death. The best way to reduce income poverty is to encourage and support the development of effective businesses (small, medium and large) which make good use of our natural resources and talents to create wealth and jobs.

Urban poverty in India

Challenges of urban poverty in India are tied with those of the countrys fast paced development. Indian cities, along with those of other developing countries, have come in a few decades only to dominate the charts as the worlds biggest cities for the first time in modern history. Such high-speed, colossal growth, as impressive as it may be, poses several problems if not threats: pollution (air, soil, water), and a disproportionate concentration of poverty, among others. Those two issues stem directly from the fact that by growing that fast it makes it hard to plan for everything all at once: housing (for a while some cities grew by a million inhabitant per year) and the gigantic urban planning mish-mash that it presupposes.

And the case of urban poverty in India has been exemplary in terms of mismanaging (or not managing at all) urban growth. Cities have become the best place to foster poverty and destitution at a scale and extent unseen before. Rural poverty is one thing, but urban poverty in India added a whole new breed of revolting aspects to it: diseases, violence (more than at the countryside), disintegration of communities and the social fabric. But building and increasing the size of cities obviously costs billions and India was somewhat short of cash at the time. Consequently, it decided as well to radically reduce its provision of public services and investment in infrastructure. You might say ok but they were broke, and this is probably where strong political will makes a difference considering that other countries in the same situation managed very well their transition despite a few controversies.

As cities grew, so did the slums, "welcoming" more rural migrants and creating more urban poverty in India. However things are getting better as proportionally speaking poverty has been waning over the past decade or so. Employment generation schemes have been working quite well. The apparition of microfinance has allowed many Indians to start small businesses and the trend is growing as flows of credit arrive.

But this has helped only part of the poor, those not too far below the poverty line. For the rest, the poorest of the poor, no government policy, no pro-poor local organization has managed to reach them and help them. The reasons range from social discrimination (some organizations help only people from their community or social class/caste), to the difficulty to locate the poorest as they often migrate throughout the city in quest of a temporary job.

Finally urban poverty in India is convenient to many local authorities as the higher cost of living makes more people fall above the poverty line (which is the same for the whole country, urban and rural areas alike). As the poor need to survive in more expensive big cities, they technically have more money than rural residents but they also spend it all very quickly to feed themselves. The Indian poverty line thus shows no consideration of the other aspects of poverty: homelessness or living in the slums, access to water, electricity, public transportation, job, etc Surprisingly, and what makes many say that Indian officials dont give a damn about the poor, social housing is still not a very high priority nationwide (do correct me if you find anything new). Whats more, there is conveniently no standard definition of slums and the

massive lack of research provides no account of the lives of the poor and the extent of urban poverty in India.

The demise of the state and public services

What a lot of research point out is that while theres no questioning the central role of the private sector in alleviating growth, this doesnt mean either that the state should disappear. In a country like India, on the contrary, the private sector has had to be spurred, and the state would have been of great help if it had invested in very basic infrastructure and maintained its public services instead. As usual, poverty and the usefulness of the state are context-based and in the case of developing countries, the government plays a crucial part.

From the US to the UK, France and Germany, from Japan to South Korea and China, what the neoliberal doctrine of international institutions didn't mention is that all have actively used government intervention and protectionism to develop their economies (yes even the US, for more details see the economist Chang Hajoon's famous book "Kicking Away The Ladder" )

In India as in many other nations, specific social groups lobby for influence and this is aggravated in this case by the rivalries inherent to the Indian society (i.e. the caste system). And when politics eventually meddle in this, it becomes ugly by forming sort of an institutional segregation in terms of who or which community will receive public and social services and which one will not. Typically things get worse at the local level with huge differences between cities. So for example Mumbai (Bombay) fares 4 times worse than the capital and Calcutta over twice worse than Delhi in terms of providing public services, in particular basic health care and education. Funnily enough, the rich enjoy much better services and infrastructure in Mumbai than in the two other cities. Now where did that money come from?

Another issue is that technically speaking its the central government that finances the local public services and its infrastructures (from street lights to sewers) and if you just consider their complete absence in certain parts of towns (the slums), you realize that the government needs to cooperate more directly with local authorities and make sure that the money gets where its supposed to go.

Urban poverty in India... or just call it slums

Lets have a look at a typical class of workers in the slums that make up one reality of urban poverty in India: waste pickers and collectors, for recycling use. Both pickers (who pick up waste from the streets) and collectors (who collect from households) are at the very bottom of the social order even while their role is crucial for recycling and the environment with the pickers at the lowest position, by far. Most of them came from the countryside and had to settle in slums in the absence of money or choice. Collectors get enough to live around the Indian poverty line while pickers live far below it. Both actually dont come from the same places, the former are from villages around Delhi and the latter from further away provinces where Bengali is the main language. Already, a first form of discrimination that defines the social structure of poverty in India is discernible: the poorest communities stick together to vie for resources and the best jobs.

Even by the standards of urban poverty in India, and despite their invaluable contribution to the environment and the cities waste disposal budget, the living conditions of the pickers are at best appalling ( whats worse than appalling? Well theyre not being tortured or beaten up, at least not as far as research goes). So now what do you do to help them? Thats easy, you need to turn the slums into a normal urban place. Ah easier said than done. There is in fact such program (see end of page), aimed at restoring basic services in the slums and making them a real part of town with access to water, electricity, health care, education, sewers etc. But thats not enough to help our pickers and collectors in the short run. Education and training are just as vital, however not as long as theyre denied a chance to find a job.

Therefore, a new challenge arises: create (appropriate) jobs; and why not for example use the fact that theyre specialized in the waste recycling business. Integrating them further up the chain of recycling by making and or re-selling recycled goods is one possibility that will considerably raise their income. With the craze about going green, its the best time and theres a great opportunity for each municipality to help a new section of the private sector grow. Thats all at the condition that local governments act upon the lack of infrastructure and industries, the limited access to training and job-hunting support. Theres everything to bet that once their income and social status are raised, new opportunities will arise for these people to keep on improving their lives, seek new types of jobs or engage in new business ventures. Last but not least, cities pro-poor policies (pro-poor is funny, why not just democratic policies as youre supposed to care about the people's needs here) would have a much better impact if each municipality wouldnt mind policing its own employees and its own police. Its no secret that they are the flagship of Indian corruption and have this irritating habit to regularly extract money from the poor as a strange toll for working on their territory. Starting with this alone would represent a great step to directly increase the income of many of the slums residents. As in many developing countries, urban poverty in India is a direct effect of rural migrations fleeing poverty. This creates a massive unemployment and

underemployment issue but also a housing problem out-of-proportions. One of the few things that did help with the housing shortage has been microfinance, at any rate it reduced uncertainties, though it's far from enough to solve the problem of poorness and inter-class (or caste) marginalization and discrimination. The spectacular growth of cities has made poverty in India incomparably more visible and palpable through its famous slums. If proportionally speaking there are less urban poor nowadays, their sheer number has been increasing. They spend 80% of their income on food and the waning of public services creates new unbearable costs that in the end lead to absurd situations where Indians are denied basic services they could actually access for once. Getting used to selling your dignity for a rupee's work is one thing, and living on the edge of precariousness another, but witnessing the rest of the population reaping the benefits of the formidable growth is probably the most dangerous and unstable feature of poverty in India.

Rural poverty
Rural poverty is largely a result of low productivity and unemployment. The Jawahar Rozgar Yojana, a national public works scheme launched in 1989 with financing from the central and state governments, provides more than 700 million person days of work a year about 1% of total employment for people with few opportunities for employment. The scheme has two components: a programme to provide low-cost housing and one to supply free irrigation wells to poor and marginalized farmers. The public works scheme is self-targeting. Since it offers employment at the statutory minimum wage for unskilled manual labor, only those willing to accept very low wages the poor are likely to enroll in the scheme. By providing regular employment and thereby increasing the bargaining power of all rural workers, the public works scheme has had a significant effect in reducing poverty. It has also contributed to the construction of rural infrastructure (irrigation works, a soil conservation project, drinking water supply). Evaluations show that 82% of available funds have been channeled to community development projects. Targeting was improved in 1996 when the housing and irrigation well components were delinked and focused exclusively on people below the poverty line. TRYSEM (Training rural youth for self employment) was started to provide technical skills to the rural youth and to help them to get employment in fields such as agriculture, industry, services and business activities. Youth of the poor families belonging to the age-group of 18-35 are entitled to avail the benefits of the scheme. Priority is given to persons belonging to ST/SC and ex-servicemen and about 1/3 seats are reserved for women. Minimum Needs Programme was taken up as an integral part of the 5th Five Year Plan and it was intended to cater to the minimum needs of the people such as rural water supply, rural health, road building, adult education, primary education, rural electrification and improvement of the urban slums etc.With the

intention of removing urban unemployment some schemes such as SEPUP (Selfemployment programme for the urban poor); SEEUY (Scheme for self-employment of the educated urban youths) .These schemes gives loans and subsidies for the urban unemployed youths to create or to find for themselves some jobs. The SEPUP had provided financial help for about 1.19 urban unemployed youths in the year 190-91. The participation of civil society organizations in poverty reduction efforts, especially those directed to women, has increased social awareness and encouraged governments to provide better services. Cooperatives such as the Self-Employed Women's Association provide credit to women at market rates of interest but do not require collateral; they also allow flexibility in the use of loans and the timing of repayments. These civil society organizations have not only contributed to women's material well being; they have also helped empower them socially and politically. Such credit initiatives, by bringing women out of the confines of the household, are changing their status within the family and within village hierarchies. The demands of civil society organizations for better social services have spurred the government to launch campaigns to increase literacy and improve public infrastructure. And their calls for greater accountability and real devolution of power are increasing the likelihood that expenditures for poverty reduction will reach the needy, especially women. The Indian state has undoubtedly failed in its responsibilities towards its citizens over the last 50 odd years. There is a need for the state to move out of many areas and the process has been started with economic liberalization. The process of decentralization should devolute lot more powers, both functional and financial, to panchayats. The lack of transparency and accountability has hampered our economic development at all levels. The problem of poverty persists because of a number of leakages in the system. New laws have to be evolved to ensure more accountability. Bodies like the Planning Commission should be modified into new constitutional bodies that can hold governments accountable for their failure to. Agriculture, hunger, and rural poverty in India Since there are so many people working in agriculture and living in rural areas, the agricultural sector has (and should have) an unrivaled priority in policies aimed at poverty in India. And because there is a simple and straightforward link between rural poverty and agricultural productivity, the end goal is to raise the productivity per person in order to alleviate poverty. As a consequence policies should focus on spurring investment and technological progress.

Okay now thats the conventional way to approach rural poverty and in theory theres really no problem with it. But India faced new troubles in this strategy. First this kind of reasoning implies many things: in the end to increase productivity, India needed re-distributive land reforms from its traditional system (and the reform was incomplete), then subsidies were needed to cater to poor farmers needs of new inputs (better seeds, fertilizers, pesticides, machines,) and here again the results of the policy were limited . Worse after the 1991 economic reforms, subsidies actually went down because of the governments fiscal deficit. And rural poverty went up, though also because other social safety nets were disappearing. Secondly, the reforms were thwarted by the persistence of the social structure in rural India. Marginalization and exploitation for instance have become part of the system, which resisted the land reform and empowerment logic (e.g. entrepreneurship). On the bright side though, when anti-poverty programs did work, theyve had a great influence on the social structure and helped people move up the social ladder. The problem is mostly that reforms have been shy and incomplete while something more direct and beefy was needed (no offense to vegetarians). Consistent reduction of poverty in India has failed, especially in largely agricultural states such as Madhya Pradesh and Uttar Pradesh, because neither investments in rural literacy, education, technology nor in infrastructure were substantial. This explains the structure of the Indian economy: as the agriculture evolves, it frees labor for the industry, but since this hasnt happened the countrys focused on the services sector instead, which employs much less people. And thus rural poverty in India has subsisted till today while at the same time the services sector accounts for most of the country's GDP.

Causes of poverty in India

The causes of poverty in India are nothing short of complex but a lot of progress has been made to address them. So this page will describe more specifically whats been done to alleviate poverty so far and what is still holding things back. The economic reforms of 1991, despite spurring a huge growth of the economy, have left the country with terrible inequalities, within cities as well as between urban and rural areas. They were the best opportunity to seriously tackle the causes of poverty in India and more specifically rural poverty. With two thirds of the population living in rural areas and some 500 million poor (or more), even urban poverty stems from the rural migrations to the city.

This means that the government should have had in priority overhauled the agricultural sector. By improving agricultural productivity it would have directly alleviated poverty by the hundreds of millions (just like in China did in the 1990s). But it gave a disproportionate priority to the cities and the services sector (notably banking, insurance, finance, real estate and IT services), thus trying to leapfrog the usual pattern of economic development: from agriculture to manufacture to services (in terms of importance in the economy).

Economic reforms & causes of poverty in India

The thing with manufacture is that, when well handled, it provides hundreds of millions of jobs - literally - to the people coming from the rural exodus. After what you usually invest in education and bring the emergence of the services sector. But right now at this stage of development the services and especially IT and finance sector typically dont employ a lot of people. And although the tertiary sector (services) represents 50% of Indias GDP, it employs only 2 million people! So many Indians are quite right to complain that globalization and modernization benefits only the rich.

However the manufacturing sector is finally growing, so there are good prospects to reduce the massive unemployment and hence tackle one of the causes of poverty in India. But that leaves the problem of rural poverty. To compare once more with China, the Chinese government has the merit to have very gradually opened its country and markets to the outside world rather than a shock therapy. This means that it kept for more than a decade its rural safety nets, giving time to people to adapt to the transition and changes. On the other hand India just left its rural poor on their own, and their opposition to globalization is in fact very typical: every developing country where social safety nets were quasi-absent has in general a defiant population to the global process. On the bright side though, as manufacturing develops, so does the tertiary sector which now provides services supporting the former such as better infrastructure, transports, and personal services. Plus, the services sector has a much greater positive impact on poverty than manufacturing, so its growth and expansion is but good news for tackling the causes of poverty in India (unemployment, quality job and income in this case). Despite that and the development of real estate sector, hundreds of millions still lack a decent home so there should be incentives for the market to cater to the needs of the poor with social housing so that the country gets a chance to solve the problem of its gigantic slums.

Overcoming market liberalization and globalization

If you were to believe what international organizations have professed for years in the context of the "Washington Consensus" , then youd say (among other things) that pure economic growth systematically leads to less poverty. However plenty of examples now prove that (partly) wrong, including in this case where growth and liberalization have been part of the causes of poverty in India by exacerbating inequalities within the population and reducing the role of the state while its been direly needed to develop the country. In this sense growth itself risks stirring some tensions within a country between those who got rich and those who were left out. Theres nothing wrong with market liberalization in itself but in a developing country it can be disastrous because market forces will only invest in profitable areas which leaves plenty excluded in the country. The role of the state here is thus one of empowering citizens and making sure they can participate in the economy and growth of the country. Another dilemma with the globalization-liberalization duo is that typically it wipes out the least competitive companies in a given market. While this is eventually a necessary evil if India is to adapt to globalization, the country should have nevertheless focused on protecting its laidoff workers who didnt ask for anything and certainly didnt vote for that. Nurturing their capability to adapt and better absorb shocks should have been a priority of anti-poverty policies. One way to do so would have been to invest in education, as the countrys share of GDP in education is far from enough and below that of other developing countries and regions such as China and Latin America. Education and training are by essence empowering tools that assist people for life, they develop their skills and ability to better respond to change.

Caste system
According to S. M. Michael, Dalits constitute the bulk of poor and unemployed. According to William A. Haviland, casteism is widespread in rural areas, and continues to segregate Dalits. Others, however, have noted the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits.

Caste explanations of poverty fail to account for the urban/rural divide. Using the UN definition of poverty, 65% of rural forward castes are below the poverty line.

India's economic policies

A rural worker drying cow dung in Bihar. In 1947, the average annual income in India was US$439, compared with US$619 for China, US$770 for South Korea, and US$936 for Taiwan. By 1999, the numbers were US$1,818; US$3,259; US$13,317; and US$15,720, respectively. Numbers are in 1990 international Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one of the world's poorer countries. License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990. The License Raj was a result of India's decision to have a planned economy, where all aspects of the economy are controlled by the state and licenses were given to a select few. Corruption flourished under this system. The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used. India had started out in the 1950s with: high growth rates, openness to trade and investment, a promotional state, social expenditure awareness and macro stability but ended the 1980s with: low growth rates, closure to trade and investment, a license-obsessed, restrictive state (License Raj), inability to sustain social expenditures and macro instability, indeed crisis. Poverty has decreased significantly since reforms were started in the 1980s.

Also:

Over-reliance on agriculture. There is a surplus of labour in agriculture. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%. About 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%.

High population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty.

Liberalization policies and their effects

Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway. As journalist and the Rural Affairs editor for The Hindu, P Sainath describes in his reports on the rural economy in India, the level of inequality has risen to extraordinary levels, when at the same time, hunger in India has reached its highest level in decades. He also points out that rural economies across India have collapsed, or on the verge of collapse due to the neoliberal policies of the government of India since the 1990s The human cost of the "liberalisation" has been very high. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics. That number remains disputed, with some saying the true number is much higher. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. As professor Utsa Patnaik, Indias top economist on agriculture, has pointed out, the average poor family in 2007 has about 100 kg less food per year than it did in 1997. Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop. Sainath points out that a disproportionately large number of affected farm suicides have occurred with cash crops, because with food crops such as rice, even if the price falls, there is food left to survive on. He also points out that inequality has reached one of the highest rates India has ever seen. In a report by Chetan

Ahya, Executive Director at Morgan Stanley, it is pointed out that there has been a wealth increase of close to US$1 Trillion in the time frame of 2003-2007 in the Indian stock market, while only 4-7% of the Indian population hold any equity.. During the time when Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same time as India became the nation of second highest number of dollar billionaires. Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Millions move towards towns and cities where, too, there are few jobs to be found. In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal or small farmers. Nothing has happened in 15 years that has changed that situation for the better. Much has happened to make it a lot worse. Those who have taken their lives were deep in debt peasant households in debt doubled in the first decade of the neoliberal economic reforms, from 26 per cent of farm households to 48.6 per cent. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberal procedure). Life was being made more and more impossible for small farmers. As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on education, However, some government schemes such as the mid-day meal scheme, and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.

Reduction in Poverty
Despite all the causes, India currently adds 40 million people to its middle class every year.Analysts such as the founder of "Forecasting International", Marvin J. Cetron writes that an estimated 300 million Indians now belong to the middle class; one-third of them have emerged from poverty in the last ten years. At the current rate of growth, a majority of Indians will be middle-class by 2025. Despite government initiatives, corporate social responsibility (CSR) remains low on the agenda of corporate sector. Only 10 percent of funding comes from individuals and corporates, and "a large part of CSR initiatives are artfully masqueraded and make it back to

the balance sheet". The widening income gap between the rich and the poor over the years, has raised fears of a social backlash.

Efforts to alleviate poverty

Since the early 1950s, govt has initiated, sustained, and refined various planning schemes to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country as poor spend about 80 percent of their income on food. The schemes have however not been very successful because the rate of poverty reduction lags behind the rapid population growth rate.

Controversy over extent of poverty reduction

The definition of poverty in India has been called into question by the UN World Food Programme. In its report on global hunger index, it questioned the government of India's definition of poverty saying: The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is said to be declining rapidly, highlights the increasing disconnect between official poverty estimates and calorie deprivation. While total overall poverty in India has declined, the extent of poverty reduction is often debated. While there is a consensus that there has not been increase in poverty between 199394 and 200405, the picture is not so clear if one considers other non-pecuniary dimensions (such as health, education, crime and access to infrastructure). With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population will continue to migrate toward cities, making the issue of urban poverty more significant in the long run. Some, like journalist P Sainath, hold the view that while absolute poverty may not have increased, India remains at an abysmal rank in the UN Human Development Index. India is positioned at 132ond place in the 2007-08 UN HDI index. It is the lowest rank for the country in over 10 years. In 1992, India was at 122ond place in the same index. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people, at 230 million, and is 94th of 119 in the world hunger index), and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.5), the highest in the world) as of 2008.

Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India, as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. He insisted that the 1999-2000 survey was well designed and supervised and felt that just because they did not appear to fit preconceived notions about poverty in India, they should not be dismissed outright. Nicholas Stern, vice president of the World Bank, has published defenses of the poverty reduction statistics. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country. India, together with China, have shown the clearest trends of globalization with the accelerated rise in per-capita income.A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with most working in "informal labour sector with no job or social security, living in abject poverty." However, a new report from the UN disputes this, finding that the number of people living on US$1.25 a day is expected to go down from 435 million or 51.3 percent in 1990 to 295 million or 23.6 percent by 2015 and 268 million or 20.3 percent by 2020. A study by the McKinsey Global Institute found that in 1985, 93% of the Indian population lived on a household income of less than 90,000 rupees a year, or about a dollar per person per day; by 2005 that proportion had been cut nearly in half, to 54%. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well. They project that if India can achieve 7.3% annual growth over the next 20 years, 465 million more people will be lifted out of poverty. Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005, and they project that it will drop to 26% by 2025. Report concludes that India's economic reforms and the increased growth that has resulted have been the most successful anti-poverty programmes in the country.

Persistence of malnutrition among children

According to the New York Times, is estimated that about 42.5% of the children in India suffer from malnutrition The World Bank, citing estimates made by the World Health Organization, states that "About 49 per cent of the world's underweight children, 34 per cent of the world's stunted children and 46 per cent of the world's wasted children, live in India." The World Bank also noted that "while poverty is often the underlying cause of malnutrition

in children, the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa, has not translated into superior nutritional status for the South Asian child." A special commission to the Indian Supreme court has noted that the child malnutrition rate in India is twice as great as sub-Saharan Africa Data from The World Bank shows that the percentage of underweight children in subSaharan Africa is 24% while India has almost twice the amount at 47%. Out of the 47%, 50 % were from rural areas, 38% from urban areas, 48.9% of the underweight are girls and 45.5% are boys. Malnutrition is often associated with diseases like diarrhea, malaria and measles due to the lack of access in health care which are also linked to the problem of poverty. The United Nations had estimated that 2.1 million Indian children die before reaching the age of 5 every year four every minute. The Indian government had come up with the Integrated Childhood Development Service (ICDS) in 1975 to combat the problem of malnutrition in the country. ICDS is the worlds largest child development program but its effects on the problem in India are limited. This is because the program failed to focus on children under 3, the group that should receive the most help from the ICDS. This is due to the fact that most growth retardation would have developed during the age of 2 and are mostly irreversible With the lack of help, the chances that newborn babies are unable to develop fully would be higher. The quality of ICDS centers also varies from states to states and often, the states with the most serious problem of malnutrition have the lowest amount of help given. Examples are Rajasthan, Uttar Pradesh, Bihar, Orissa and Madhya Pradesh, all rank in the bottom ten in terms of ICDS coverage. Despite the poor distribution of help, the ICDS is still considered to be efficient in improving the health of the children in the country. Statistics from UNICEF shows that the mortality rate of children under 5 has improved from 118 per 1000 live births in 1990 to 66 in the year 2009. However, malnutrition is still a problem for India; it has been found that micronutrient deficiencies alone may cost India US$2.5 billion annually. Malnutrition can lead to children not being able to attend school or perform to their fullest potential, which in turn leads to a decrease in labour productivity, affecting Indias economic growth as a whole.

Faith in growth vs rural poverty (and reality)

The example of India has shown many that if growth does give opportunities to some to get out of poverty, its also true that it doesnt prevent people from falling into poverty. The two trends getting out and into poverty seem completely unrelated, or at least becoming poor is not connected to growth. Thus many experts have argued that to make the most out of economic growth, the government at all levels should have invested in protecting the people, that is to say invest in public services, for instance in health care. Diseases are one of the main causes of poverty in India, creating a major public safety disaster in India that contributes to keep and make millions fall into poverty. Its estimated that each year, the cost of health care pushes some 39 million people back into poverty, according to a recent CBS News report.

What the government needs is precisely make sure the people can also ripe the benefits of the economic growth. So even if the growth in the third sector is impressive, theres still a huge surplus of jobless or underemployed workers at the countryside. And over there, the issue of land inequality is an important bone of contention that if resolved could substantially alleviate poverty. The fact is that for each village, a few land owners have most of the land which they rent to other people to work on, at ridiculously high prices. Its a bit or very much like the rent seekers in feudal societies, they prevent any real growth from happening and just suck up all the money (that they dont reinvest, they dont care all that much about the land itself). Not only is the situation stuck because of this, but land inequalities also reflect the huge imbalance of power carved in the rural society.

Nearly all the developed countries have shown at some point a pattern of very well distributed land ownership (at least within the rural population), where up to 70 to 80% of the population would own the land (rather than 5% for example). From then on, economic

development happened on the basis of more equal societies. But owning land also has a huge impact on agricultural productivity as people are generally willing to invest only in land they own and exploit for themselves. This increase in agricultural productivity then means more growth and less poverty at the same time.

After that, people start nurturing their physical and human capital, their kids can afford school, and the household gains higher social status, thus reducing social inequalities and problems of access to resources. So as you can see, land distribution is closely tied to economic power, social power and social status. But the snag is that it takes a decade or two for the effects of land reforms to be felt in the economy, and long term prospect is usually a poor incentive in modern politics. In fact theres another great hurdle: landowners. Ever since Indias independence, land reforms have been on and off the political agenda and every time successfully thwarted by the efforts of landowners, although sometimes rightfully as the state had plans to strip them of their land without any compensation. Then again local officials, working hand in hand with property developers, have often achieved to expel countless poor farmers of their house without compensation, or pay, or notice. It just happened overnight. But doing that to richer ones would of course upset the power structure in the society, one of the causes of poverty in India that creates systemic discrimination. In any case, big land owner or small poor one, you just dont go and take peoples land without paying compensation for what youre doing. And its not about paying a few symbolic rupees as it happened so often, it should be something more significant, up to an annual compensation - a real and fair incentive - as many experts argue. In the end youre taking the land to generate a great deal of money and economic growth, so more fairness is central here. In a so-called democracy, if private property is not respected, if theres no law, then people have very limited incentives to invest in their land and make it more profitable. They distrust their government and politicians and make it even more difficult to implement any policy at the end of the day.

Today India still lacks the basic administrative and legal frameworks to make property transfers possible, or easier, in order to keep on implementing decades old land reforms.

Lastly, where the state failed again to look beyond growth is by leaving the rural exodus happen on its own. That is to say, that even while Indians came to the city by tens of

millions, there was hardly any institution present to help them make the transition and find a job in this whole new world. Or a house rather than some makeshift accommodation in the slums (but that would have implied planning housing for everyone, which requires a lot of work, so...). Overall those who have been doing better than others are overwhelmingly those who received help from personal connections from the city. Having a friend or some parent, someone who know his way around the city is invaluable help for any newcomer and a lifechanging advantage. As for the rest of the people thats just too bad.

Discriminations: hidden causes of poverty in India

The Constitution of India has officially abolished the system of caste in the country a while ago (1950), and yet its hard to get rid of an age-old social order. Its particularly for the dalits (150 million people) or the Untouchables, or Harijans that things prove difficult. Being the out-caste caste (i.e. so low in the social hierarchy that technically they don't belong to a caste), theyve never even got a chance to work in agriculture. Everyone from landowners to local farmers look down on them and refuse them jobs on the ground of stereotypes such as they dont work, they steal. Segregation can become quite intense when the whole society puts its mind to it. Indians are obviously not evil, but as in any society with huge poverty social classes vie for resources. And the existence of very specific classes in India helps this process. But obviously the picture is not all dark and ever since the Constitution huge efforts have been made to provide the dalits with jobs and education, civic groups lobby and take action to help them. But once again, given the size of India, it would really take the help of the whole population for things to change for good. In a way the causes of poverty in India partly rely on social structures and features, creating a discrimination that generates artificial poverty: between castes and genders, religions and tribes. Some are even more artificial considering for instance the knives-out hostility with the Muslims, whereas a century ago there were prejudices but certainly not as fierce as the situation with Pakistan made them. Likewise, in many cases the situation of women and their bottom-low participation in the economy among Asian countries counts as one more issue among the causes of poverty in India. Their restricted access to education in rural areas also makes any kind of family planning and educative campaign on child diseases or education quasi ineffective.

India's official poverty line doesn't measure up

It is time to separate people's real needs from the arbitrary assessments of poverty that have guided Indian governments. India's poverty line has always been a matter of huge debate, but it was a discussion mostly confined to economists and policymakers. But the matter has now gone public, following a row about an affidavit from the planning commission to the supreme court of India, in which the official poverty line was set at 26 rupees (around $0.53) per person per day in rural areas and 32 rupees in urban areas. This can only be a good thing, because the official attempts to measure poverty are not just arcane, but riddled with contradictions. How exactly are these numbers arrived at? The measure was developed in the early 1970s, when a group of experts decided the appropriate line would be set according to the average monthly consumption expenditure of households whose members consumed (per capita) 2,400 calories of food per day in rural India and 2,100 calories per day in urban India. Subsequently, the poverty line has simply been updated using consumer price indices. These numbers now have little to do with actual calorie consumption because food consumption patterns have changed. However, the use of that line has been defended by official sources who have argued that, at that level of expenditure, families could afford to buy minimum food and have simply chosen not to. Of course, this begs the question of whether it is really choice or the urgent need to consume other items (energy, healthcare and so on) that determine patterns of spending. Nevertheless, it is precisely this line (annually updated by consumer price indices) that has been used to describe the extent of poverty in India for decades. This was roughly similar to the World Bank's estimate of $1 a day (now $1.25 a day) per person, not at nominal exchange rates, but at purchasing power parity (PPP) exchange rates. In recent times, various committees led by economists have come up with different ways to measure the extent of poverty. The official line delivers a poverty rate of around 32% of the population. A committee under Suresh Tendulkar estimated it at 37%, while another led by NC Saxena said 50%, and in 2007 the Arjun Sengupta commission identified 77% of Indians as "poor and vulnerable". The World Bank's PPP estimate of Indian poverty was higher than 40% in 2005, while the Asian Development Bank arrived at almost 50%. The UNDP's Multidimensional Poverty Index finds the proportion of the poor to be higher than 55%.

All this even sounds ridiculous. And if it were simply a question of measuring the extreme poor and tracking the extent of extreme poverty over time, this discussion could indeed be left to the social scientists. But what has made it matter for all the wrong reasons is that these arbitrarily drawn poverty lines have been used to determine the extent to which citizens receive subsidised access to essential goods and services. Since the mid-1990s, various government schemes have differentiated between the categories of "Below Poverty Line" (BPL) and "Above Poverty Line"(APL), and it was announced that a whole range of subsidised goods and services - from cheaper food grain in the public distribution system to subsidised healthcare to access to funds for basic housing would only be available to BPL households. Since India has a federal system, state governments are in charge of delivery of all these goods and services, and they have to decide which households are most in need through surveys. In fact, many state governments have taken a more realistic view of the people in need and issued "BPL" cards to many more households than those recognised according to the official poverty line. In some southern states, for example, significantly more than twothirds of rural households have BPL cards. But the central government allocates resources (both money and food grain) to the states on the basis of the national poverty estimates taken from the national sample survey, which is based on the official poverty line. State governments that provide these goods and services to additional households have to finance the extra ones themselves. As they have faced hard budget constraints, this has become increasingly difficult. That is why the poverty numbers are such a bone of contention. In this context, the only sensible thing for the government to do would be to separate the basic entitlements of the people, especially food, from such controversial numbers. This is the basic proposal of a statement signed by more than 30 leading economists, including two former state finance ministers and many senior economists who have worked with the government in different capacities. The statement is worth quoting in full: We do not consider the official national poverty lines set by the planning commission, at 32 and 26 rupees per capita per day for urban and rural areas respectively, to be acceptable benchmarks to measure the extent of poverty in India. In any case, irrespective of the methodology we adopt to measure poverty, the number of poor and hungry people in the country remains unacceptably large.

While academic debates can continue on the appropriate measure of poverty in India, its extent and whether it is decreasing over time, we strongly believe that it is unacceptable and counterproductive to link the official poverty estimates to basic entitlements of the people, especially access to food. Official surveys of nutritional intakes and outcomes indicate that undernutrition is much more widespread than income poverty, however defined. It is also widely recognised that the targeted public distribution system (PDS) introduced since 1997 has done more harm than good by creating divisions even among the poor and has led to massive errors of exclusion. Recent evidence clearly establishes that states which have moved towards near universalisation of the PDS have performed much better in increasing offtake and reducing leakages.

Restoring the universal PDS appears to us as the best way forward in combating hunger and poverty. This is not only feasible within the available fiscal space of the Union (central) government but must be a policy priority in the backdrop of high and persistent food price inflation. Following the controversy, the government has now declared that it will take into account multiple dimensions of deprivation for arriving at specific entitlements that rural households will receive, and that the current poverty estimates based on these declared numbers will not be used to impose any ceilings on the number of households to be included in different government programmes and schemes. We still have to see how this will play out, but here is a first step in the right direction. This article was amended on 4 October 2011. The final paragraph has been updated following the Indian government's announcement on Tuesday that it would not cap poverty numbers. The paragraph had read: "This is something the government should pay heed to otherwise, the growing perception is of a governing coalition that is not only riddled with corruption, but full of Marie Antoinette-style insensitivity." This has now been changed.

Income based poverty line in India

The poverty line was originally fixed in terms of income/food requirements in 1978. It was stipulated that the calorie standard for a typical individual in rural areas was 2400 calorie and was 2100 calorie in urban areas. Then the cost of the grains (about 650 gms) that fulfil this normative standard was calculated. This cost was the poverty line. In 1978, it was Rs. 61.80 per person per month for rural areas and Rs. 71.30 for urban areas. Since then the Planning

Commission calculates the poverty line every year adjusting for inflation. The poverty line in recent years is as follows - (Rs. per month per head)
Year India rural India urban 454 560

20002001 328 20052006 368

This income is bare minimum to support the food requirements and does not provide much for the other basic essential items like health, education etc. That is why some times the poverty lines have been described as starvation lines.

Population below poverty line (%)

Country 1994 2002 2007 India 35 25 25

Definition of Population

Childhood in poverty
In India a child whose legitimate place is at school is found to be holding a hammer and chisel in his hand to supplement the income of his poor family. In one of its reports, the Planning Commission also admits that though there are clear provisions in the Constitution to safeguard the interest of children by ensuring that they receive education and are not forced to work for a living, it is unfortunate that the problem of child labour due to poverty exists to a large extent in India. Children are the greatest victims of poverty in India. *Eight Indian states have more poor than 26 African countries: *As per the Multidimensional Poverty Index (MPI), there are more poor people in eight Indian states (a total of around 421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal) than in the 26 poorest African countries combined (410 million), said a report brought out by the United Nations Development Programme (UNDP) and Oxford university. A similar report on poverty shows that India slipped two spots (rank 67) on the global hunger index 2010 released by the International Food Policy research Institute (IFPRI). *India among the worst places for a mother: *The report by the child rights organisation Save the Children placed India 73rd among 77 middle-income countries in terms of the Best Place to be a Mother. According to its report, 70,000 women lose their lives due to pregnancy or childbirth complications. In a different report the organisation noted that India had the

highest number of underweight children and children with severe acute malnutrition in the Commonwealth countries.

Undernourished children live in Poverty Prof Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI), Washington DC, said that hunger and malnutrition continued to be challenging problems among 29 countries of the world, and India was one of them. As such, food and nutrition availability should be the major development goals in the national policy of these developing nations. In South Asia, especially in India, an impressive economic growth and, to a large extent, reduced poverty in the recent years, have not translated into improved nutrition. Globally, the bulk of malnutrition occurs in Asia, with South Asia having the highest rates of undernutrition and the largest numbers of undernourished children in the world-42 percent of the world.s undernourished children live in India. The disconnect between growth and reduced under nutrition is often referred to as the "Asian Enigma."

Childhood in Slums
Children force to live in slums with their poor parents in big cities also. Indias economic growth may or may not be a white elephant but the slum population in the country is reaching a mammoth size. The slum population has risen by as much as around 23 percent since 2001, said a study prepared by the government of India.

Saving India's children

Time to act- the slogan of: Aamir Khan, part of Citizens' Alliance, comprised of MPs across parties and NGOs, that aims to create social awareness of malnutrition among kids. India has more malnourished children than neighbouring Bangladesh which, until a decade back, was considered something of a basket case. Even African countries like the Congo, Lesotho, Tanzania and Rwanda are better placed than us. Why be so concerned about this one issue? Because the very fact that almost one out of every two children in this country goes to bed on an empty stomach is shocking in itself. Malnutrition is the principal cause of child deaths. Half of all child deaths in India could

be prevented if this one issue was tackled. Children die because malnutrition lowers a child's resistance to infection. As a result, they become vulnerable even when they have eminently treatable conditions like diarrhoea and respiratory infections.

CONSEQUENCES OF POVERTY
Poverty influences aspects of children's lives that child development experts have long recognized as essential to normal development. For example, economic stress interferes with positive, high-quality parent-child interactions. As another example, children living in poor families are often socially isolated and/or painfully aware of the shame and stigma associated with poverty. In a research study, the author found that children who most frequently went hungry were also most likely to report that adults criticized or disapproved of them. Child development experts recognize the importance of positive selfesteem to healthy development. Of course, living in a poor family also increases the chances of living in a poor neighbourhood with more exposure to violence and less social support for families than in other neighbourhoods. Klebanov and her colleagues found that neighbourhood poverty had significant effects on children's developmental test scores as early as age three (beyond the effects of family risks and family income). Stressful parentchild relationships, social isolation and shame, and poor neighbourhoods are examples of potential mediators or pathways through which poverty produces negative outcomes for children. Researchers have identified a number of other mediators of the effects of poverty on children, including low-quality child care, inadequate health care, the inability to provide a rich and stimulating learning environment in the home, chronic exposure to violence, and poor parental mental health. Some of the most impressive research findings on childhood poverty come from statistical analyses of large data sets in which pure effects of family income have been isolated from the effects of other factors often associated with poverty (e.g., single parenthood, low parental education). Duncan and Brooks-Gunn and their colleagues demonstrated that family income significantly predicted children's academic achievement and ability, even after removing any predictive power associated with family risk factors that often go along with poverty. Such findings are particularly important in invalidating arguments that poor outcomes for poor children result from other factors besides income level (e.g., character flaws in families, negative effects of welfare, low education levels, single parenting). On the other hand, such an approach to statistical analyses may also represent an unfair or

overly rigorous test of whether poverty matters for children. As also noted by Luthar, one will necessarily underestimate the consequences of poverty if one eliminates or ignores any influences of poverty that are also associated with common causes of that poverty (e.g., low parental education, single parenthood). In the real world, poverty naturally coexists with other important family risk factors.

Below poverty line:

National estimates of the percentage of the population falling below the poverty line are based on surveys of sub-groups, with the results weighted by the number of people in each group. Definitions of poverty vary considerably among nations. For example, rich nations generally employ more generous standards of poverty than poor nations. Below the indian poverty line
The poverty line in India is probably one of the most disputed and incessantly attacked ones in the world. Heck, the World Banks controversial poverty line has its origins in the Indian model! Its simply what some call a starvation line, a line that accounts for the feeling of satiety (thus measured with calories). You might be eating bred all day all year and use your body up in a few years, you may be living in a not-so-sturdy house that flies away at the first storm that shows up, you may not have access to water or education, it all doesnt matter, does it.

Here are some raw poverty statistics in India for the number-crunching readers:

- 50% of Indians dont have a proper shelter - 70% dont have access to decent toilets (which inspires many bacteria to come over at the disease party) - 35% of households dont have a nearby water source - 85% of villages dont have a secondary school (isnt the government making decent money off its 9% growth?) - Over 40% of these same villages dont have proper roads connecting them Then theres also the problem of huge sections of the population not being included in the poverty count, namely the dalits (the untouchables), women and other tribes for every other reason. In any case theyre groups being marginalized in the society and its always convenient for a state or a politician to announce a (artificial) massive reduction in poverty. But in a way it's hard to change how a whole society and its culture function...

So right now, aside from trying to improve these informal practices (and the social dynamic in India), policies concerned with the poverty line should find a way to take them into account. Otherwise by systematically looking down on these people, the authorities risk massive social disorders and tensions. In the worst case, recognizing the issue will at least help tackle it, create a debate and get some solutions from all boards. How else would you possibly tackle something that doesnt officially exist, hum?

Current estimations of the number of people below the poverty line vary from 20 to 50% of the population - from conservatives' to liberals' estimations precisely because of the debate around the Indian poverty line. The idea is that recognizing either 240 million or 600 million poor means radically different policies for a government, so clearly the stakes are high for the parties representing richer segments of the population. As you can see in the table here, official numbers are around 35%, even while you should keep in mind that there is an oppressive body of research pointing at a massive underestimation due to the current poverty line. A simple first step to improve the excessively low poverty line would be for India to base it on a nutritious food security line, and then move to include education, sanitation, a home that resists the wind and all that good stuff. Prosperity sometimes begins with something small, but if a small business owner cant protect his own goods from going rotten, take rain damages or being stolen then how is he ever to make any money or invest in anything.

Considering the size of India, poverty differs greatly from one state to another so poverty lines should be adapted to each of them as well as be updated regularly considering the pace of economic growth in the country.

Poverty estimates
There has been no uniform measure of poverty in India.[4][5] The Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the poverty line. The Arjun Sengupta Report (from National Commission for Enterprises in the Unorganised Sector) states that 77% of Indians live on less than 20 a day (about $0.50 per day). The

N.C. Saxena Committee report states that 50% of Indians live below the poverty line. A study by the Oxford Poverty and Human Development Initiative using a Multidimensional Poverty Index (MPI) found that there were 645 million poor living under the MPI in India, 421 million of whom are concentrated in eight North Indian and East Indian states of Bihar, Chattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal. This number is higher than the 410 million poor living in the 26 poorest African nations. The states are listed below in increasing order of poverty based on the Multidimensional Poverty Index.

MPI Rank States

Population (in millions) 2007

MPI Proportion of Poor

Average Contribution Intensity to Overall

Number of Poor MPI (in

Poverty 53.5% 40.9% 43.4% 46.0% 42.3% 43.6% 0.6% 0.0% 1.0% 0.3% 2.6%

millions) 645.0 5.6 0.4 7.1 2.1 22.0

1 2 3 4 5

India Kerala Goa Punjab Himachal Pradesh

1,164.7 35.0 1.6 27.1 6.7

0.296 55.4% 0.065 15.9% 0.094 21.7% 0.120 26.2% 0.131 31.0% 0.141 32.4%

Tamil Nadu 68.0

6 7 8 9 10

Uttarakhand 9.6 Maharashtra 108.7 Haryana Gujarat Jammu And Kashmir Andhra Pradesh Karnataka Eastern Indian States 24.1 57.3 12.2

0.189 40.3% 0.193 40.1% 0.199 41.6% 0.205 41.5% 0.209 43.8%

46.9% 48.1% 47.9% 49.2% 47.7%

0.5% 6.0% 1.3% 3.4% 0.7%

3.9 43.6 10.0 23.8 5.4

11 12 13 14 15 16 17 18 19 20 21

83.9 58.6 44.2

0.211 44.7% 0.223 46.1% 0.303 57.6% 0.317 58.3% 0.345 64.0% 0.351 64.2% 0.386 69.9% 0.387 71.9% 0.389 69.5% 0.463 77.0% 0.499 81.4%

47.1% 48.3% 52.5% 54.3% 54.0% 54.7% 55.2% 53.9% 56.0% 60.2% 61.3%

5.1% 4.2% 4.0% 8.5% 4.3% 7.0% 21.3% 2.9% 8.5% 4.2% 13.5%

37.5 27.0 25.5 52.2 26.0 41.9 134.7 17.2 48.6 23.5 77.3

West Bengal 89.5 Orissa Rajasthan Uttar Pradesh 40.7 65.4 192.6

Chhattisgarh 23.9 Madhya Pradesh Jharkhand Bihar 70.0 30.5 95.0

Estimates by NCAER (National Council of Applied Economic Research) show that 48% of the Indian households earn more than 90,000 (US$2,007) annually (or more than US$ 3

PPP per person). According to NCAER, in 2009, of the 222 million households in India, the absolutely poor households (annual incomes below 45,000) accounted for only 15.6% of

them or about 35 million (about 200 million Indians). Another 80 million households are in income levels of 45,000 90,000 per year. These numbers also are more or less in line with the latest World Bank estimates of the below-the-poverty-line households that may total about 100 million (or about 456 million individuals) The World Bank estimates that 80% of India's population lives on less than $2 a day which means a higher proportion of its population lives on less than $2 per day as compared with sub-Saharan Africa. , the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004, increasing the effective poverty rate from 27.5% to 37.2%. As per the 2001 census, 35.5% of Indian households availed of banking services, 35.1% owned a radio or transistor, 31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter, motorcycle or a moped, and 2.5% a car, jeep or van; 34.5% of the households had

none of these assets According to Department of Telecommunications of India the phone density has reached 33.23% by December 2008 and has an annual growth of 40%.This tallies with the fact that a family of four with an annual income of 1.37 lakh rupees could afford some of these luxury items.

Social, Political, Economic and Environmental Issues That Affect Us All

Poverty Facts and Stats

first the good news. The number of people living on less than $1 a day has dropped by about a quarter of a billion since 1990, largely due to sustained growth in China and an acceleration in economic growth in India.

Yet, the region is still home to over 600 million people living on less than $1 more than two-thirds of the world's poor. "If the poverty line is raised to $2 a day, Asia has about 1.9 billion poor people or more than three-fourths of the world's poor," the report stated.

It points out that East Asian and South-East Asian countries have done far better in reducing poverty, particularly extreme poverty, compared to the South Asian countries, which include India. The $1 poverty line has been virtually eliminated in Malaysia, Thailand and South Korea, while China, Indonesia and Vietnam halved the number of people living on $1 a day. On the other hand, in South Asia, where $1 a day poverty dropped from 40.9% in 1990 to 28.4%, the number of such people is still the second highest in the world after Sub-Saharan Africa. Of the total workers, the share of those living on $1 a day in East Asia and South-East Asia is 13.4% and 11.4%, respectively, while in South Asia it is 34.2%. Similarly, of the total workers in East Asia and South-East Asia, those earning $2 comprise 46.5% and 57.6%, respectively, while in South Asia (which included India), the figure is 83.9%. ILO analysts point out that rather than absence of economic activity, it is the low productive nature of that activity and low earning that breeds extreme poverty. "Most poor people are working (and most working very hard and long hours) but are in low productivity jobs and are not earning enough to lift themselves and their families out of poverty. The number of poor in India would increase by 35 million by March 2011, a panel of Union ministers on National Food Security law has been told. The planning commission in a presentation to an Empowered Group of Ministers (EGoM) last week has said that Suresh Tendulkar Committee had

Government can't provide food to all: Chief Justice projected the number of poor in 2005 to be 370 million. The panel has accepted this number as Indias new poverty figure for the proposed law. Applying the committees methodology to Registrar General of Indias estimated population, the plan panel has said the number of poor would be 405 million in March 2011. Based on the poverty estimate, the panel has said the government will require 34 million tonnes of food grains annually costing the government Rs 54,000 crore in food subsidy. It would mean additional Rs 6,000 crore in subsidy as compared to the poverty figure for 2005. In fact, it would mean no increase in the Central goevrnments food subsidy bill, which for the year 2010-11 has been pegged at Rs 55,000 crore.

The subsidy amount has been calculated based on an assumption that a poor person will either get six kg or every below poverty line (BPL) family will get 35 kg of food grains per month. The EGoM headed by Finance Minister Pranab Mukerjee has agreed to this. These are some of the changes EGoM has agreed after Congress President Sonia Gandhi asked the government to re-consider the approved draft law. The plan panel has also proposed that the states should be given an option to either continue with Public Distribution System linked to Unique Identification Number or direct subsidy through smart cards.

Poverty reduction
Various poverty reduction strategies are broadly categorized here based on whether they make more of the basic human needs available or increase the disposable income needed to purchase those needs. Some basic needs, such as improving access to education, may also help increase income.

Increasing the supply of basic needs

Before the industrial revolution, poverty had been mostly accepted as inevitable as economies produced little, making wealth scarce.[1] The initial industrial revolution led to high economic growth and eliminated mass absolute poverty in what is now considered the developed world.[1] Today, mass production of goods in places such as rapidly industrializing China has made what were once considered luxuries, such as vehicles and computers, inexpensive and thus accessible to many who were otherwise too poor to afford them.[60][61] In addition to industrialization, agricultural technologies such as nitrogen fertilizers, pesticides and new irrigation methods have dramatically reduced food shortages in modern times by boosting yields past previous constraints.

Providing basic needs

Infectious diseases such as malaria and tuberculosis can perpetuate poverty by diverting health and economic resources from investment and productivity; malaria decreases GDP growth by up to 1.3% in some developing nations and AIDS decreases African growth by 0.3-1.5% annually. Nations do not necessarily need wealth to gain health. For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It

reduced it to .5-.6% in the 1950s and to .06% today while spending less each year on maternal health because it learned what worked and what did not. Cheap water filters and promoting hand washing are some of the most cost effective health interventions and can cut deaths from diarrhea and pneumonia. Knowledge on the cost effectiveness of healthcare interventions can be elusive and educational measures have been made to disseminate what works. Strategies to provide education cost effectively include deworming children, which costs about 50 cents per child per year and reduces non-attendance from anemia, illness and malnutrition, while being only a twenty-fifth as expensive as increasing school attendance by constructing schools. A study by Oxford University shows that schoolgirl absenteeism could be cut in half by providing free sanitary towels. Also, when women are given more capabilities and opportunities, they seem more altruistic in helping the family and more likely to prioritize education. Desirable actions such as enrolling children in school or receiving vaccinations can be encouraged by a form of aid known as Conditional Cash Transfers. In Mexico, for example, dropout rates of 16-19 year olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children stopped begging on the streets instead of going to school because it could result in suspension from the program. POVERTY AND SLUMS IN INDIA IMPACT OF CHANGING ECONOMIC LANDSCAPE Western media headlines as usual are as follows twenty five percent of Indians live on less than a dollar a day and seventy percent live on less than two dollars a day. The forgoing was the headline of May 9, 2005 in a major international newspaper. Others headlines are not any less mischievous. These are all meaningless analysis. It does not reflect that same amount of money has differing values in different places. A more acceptable and bit accurate description of incomes in countries is Purchase Power Parity (PPP), which is, pricing identical products and services as needed by the local population in different countries, thus establishing a new and a more equitable exchange rate. The foregoing is applicable mostly to tradable goods. The PPP will put Indias GDP at $3.7 Trillion. This will raise daily monies of twenty five percent of Indians at the lowest rung of the society to seven dollars. The latter is still low but is much higher than the Western media would like to project. The forgoing is not

the point; the point is that poverty is a major shame in Indias otherwise decent, scientifically advanced, peace loving and at times turbulent image. Poverty creates slums and slums breed hopelessness and crime. Hence it needs to be tackled as an integral part of economic development. The key question that arises - will the current hype in economical development in India alter the landscape for the very poor? The answer is that, not much will change in next 20 to 25 years. The real impact will be felt later than twenty-five years. That is when 8% growth trajectory will take the PPP daily income of the very poor in India from seven dollars to forty dollars. By then, a $20 Trillion GDP economy (PPP basis) and $600 billion in exports (year 2001 basis) will add one hundred and fifty million jobs, of which forty to fifty million will go to the very poor segment of the society. This general prosperity will not only put food on the table but will add to better living, better housings etc. In the intervening period of 25 years, rising income levels will definitely add to the exodus from the slums to planned living areas. The forgoing also requires massive governmental effort to house people properly. Let us examine this issue of poverty and slums in Indian cities and its relationship to the betterment of economic conditions of the masses, a bit further? What Causes Slums in the Cities in the First Place? It is vicious cycle of population growth, opportunities in the cities (leading to migration to the cities), poverty with low incomes, tendency to be closer to work hence occupying any land in the vicinity etc. The key reason out of all is the slow economic progress. After independence in 1947, commercial and industrial activity needed cheap labor in the cities. Plentiful was available in the rural area. They were encouraged to come to cities and work. People, who migrated to the cities and found work, brought their cousins and rest of the families to the cities. Unable to find housing and afford it, they decided to build their shelter closer to work. First, one shelter was built, then two and then two thousand and then ten thousand and on and on. Conniving governments provided electricity and drinking water. Politicians looked at the slums as vote bank. They organized these unauthorized dwellers into a political force; hence slums took a bit of a permanent shape. More slums developed as more population moved to the cities. By mid sixties Mumbai, Kolkata, Delhi, and all other large cities were dotted with slums.

Very poor people live in slums. They are not the only one dwelling there. Fairly well to do people also reside there. They are either offspring of the slum dwellers that found education and an occupation. They have prospered but are unable to find affordable housing, hence have continued to stay in the shantytowns. Others are avoiding paying rent and property taxes. The latter is more often the case. It is not unusual that in the dirtiest of slums, where misery prevails that TV sets, refrigerators and radios are also blaring music. This is quite a contrast from the image which one gets in the media or from the opportunist politicians. Indias capital of Delhi has a million and a half out of fourteen million living in slums. Mumbai is worst with greater percentage living in slums. Other big urban centers have done no better. Newly built cities like Chandigarh and surrounding towns where shantytowns could have been avoided altogether have now slums. The forgoing is Indias shame despite huge progress. How will the growing Economy impact Poverty and the Slum dwellers? As stated above, 8% growth rate of Indian economy will push per capita GDP to $2,000 level in about twenty to twenty-five years (PPP per capita GDP will be much higher). The forgoing presupposes that the population does not explode in the near future but continue a healthy 1.5 to 2% growth. That is where the magic equilibrium of prosperity and desire to live a better life begins. These two together could end poverty and slums. With availability of affordable housing and jobs, slum dwelling is the last thought on peoples mind. On the other hand if the above does not happen then slums dwellers will triple in 25 years and so will the poverty. Delhi will have four and a half million-slum dwellers. Kolkata and Mumbai will have even bigger numbers. Indias shame will have no end. To avoid that, Indias economy has to remain at a high state of growth. Jobs created by the economic growth, hence higher incomes are key criteria for poverty reduction and slum elimination. The foregoing together with the current urban renewal in progress in the urban areas today will give cities in India a new look. Higher incomes will create a demand for in-expensive housing, which will have to be met with innovative use of land and building techniques. Government provided housing would be a great failure as it has been elsewhere in the world. Instead sufficient cash has to be placed in the peoples hands together with in-expensive land that peoples housing program become efficient and affordable. In addition slum living has to be made unattractive with land taxes and denial of social services. Slum colonies, which opt out of current hopelessness, should get a better deal in housing which replaces the slums.

This followed with rapidly growing rural economy will kill migration. That will also reduce pressure on housing. No single policy has ever brought an end to poverty and slums. It is a concerted effort and better policies, which will end it. No country in the world has ever been able to end poverty and slums completely. That includes the richest nation of the world USA. The point is that if economy progresses and special effort is made to uplift the poor, poverty and slums will be overtaken by better economic conditions of the people. How Long the Poor have to wait? If the experience elsewhere is a guide then poverty, slums and urban squat will be a diminishing phenomenon, if the rapid economic progress keeps its pace. Today we would have smaller of the slums, had economic policies of the present were in place 50 years back. Only now, all signs point to a rapidly rising GDP together with rising per capita GDP. With rise in income level, tendency to head to the slums has lessened. Die-hard slum dwellers who wish to pay no taxes and spend nothing on housing will most certainly continue to stay there. Others will prefer to move out. This is a normal phenomenon. It happened in US and elsewhere. It will happen in India too. An economic equilibrium has not been reached in the society yet, where enough money in peoples pocket will persuade them to vacate the slums. This wont we reached for another 20 to 25 years. By about middle of this period with increased availability of housing and higher incomes, the growth in slum dwelling will be arrested. Decline will begin only when much higher incomes are reached (as stated above), provided India does not make the mistake of regularizing the slums/bustees with land tenure on tenable land and other amenities. That is a sure fire method to keep the slums going. People will always wait for free grant of land ownership even if these grants never materialize. Even the possibility of this ever happening in a distant future will keep the slum dwellers in the slums

Reversing brain drains

The loss of basic needs providers emigrating from impoverished countries has a damaging effect. For example, an estimated 100,000 Philippine nurses emigrated between 1994 and 2006. As of 2004, there were more Ethiopia-trained doctors living in Chicago than in Ethiopia. Proposals to mitigate the problem by the World Health Organization include compulsory government service for graduates of public medical and nursing schools and creating career-advancing programs to retain personnel.

Controlling overpopulation
Some argue that overpopulation and lack of access to birth control leads to population increase to exceed food production and other resources. The world's population is expected to reach nearly 9 billion in 2040. However, the reverse is also true, that poverty causes overpopulation as it gives women little power to control giving birth, or to have educational attainment or a career. Empowering women with better education and more control of their lives makes them more successful in bringing down rapid population growth because they have more say in family planning.

Increasing personal income

Raising farm incomes is described as the core of the antipoverty effort as three quarters of the poor today are farmers. Estimates show that growth in the agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a countrys population as growth generated in nonagricultural sectors.

Income grants
Aid in its simplest form is a basic income grant, a form of social security periodically providing citizens with money. In pilot projects in Namibia, where such a program pays just $13 a month, people were able to pay tuition fees, raising the proportion of children going to school by 92% while child malnutrition rates fell from 42% to 10% and economic activity grew by 10%. The famine relief model increasing used by aid groups calls for giving cash or cash vouchers to the hungry to pay local farmers instead of buying food from donor countries, often required by law, as it wastes money on transport costs. Philosopher Thomas Pogge is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend.

Economic freedoms
In Canada, it takes two days, two registration procedures, and $280 to open a business while an entrepreneur in Bolivia must pay $2,696 in fees, wait 82 business days, and go through 20 procedures to do the same. Such costly barriers favor big firms at the expense of small enterprises, where most jobs are created. Often, businesses have to bribe government

officials even for routine activities, which is, in effect, a tax on business. Noted reductions in poverty in recent decades has occurred in China and India mostly as a result of the abandonment of collective farming in China and the ending of the central planning model known as the License Raj in India, where GDP grew slower in the 1970s than the preceding 100 years. The unwillingness of governments and feudal elites to give full-fledged property rights in land to their tenants is cited as one of the chief obstacles to development. The business environment can be further worsened by the failure of governments to provide essential infrastructure. Financial services Another form of aid is microloans, made famous by the Grameen Bank, where small amounts of money are loaned to farmers or villages, mostly women, who can then obtain physical capital to increase their economic rewards. For example, the Thai government's People's Bank, makes loans of $100 to $300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops. However, microlending has been criticized for making hyperprofits off the poor even from its founder, Muhammad Yunus and in India which has seen a growing wave of defaults . Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also, a large part of microfinance loans are spent on products that would usually be paid by a checking or savings account. Lack of financial services, as a result of restrictive regulations, such as the requirements for banking licenses, makes it hard for even smaller microsavings programs to reach the poor. Mobile banking addresses the problem of the heavy regulation and costly maintenance of saving accounts Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012. Safaricoms M-Pesa launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits in cash and translate these onto a virtual account on customers' phones. Cash transfers can be done between phones and issued back in cash with a small commission, making remittances safer.

Remittances
The World Bank says foreign workers sent $328 billion from richer to poorer countries last year, more than double the $120 billion in official aid flows from OECD members. India got $52 billion from its diaspora, more than it took in foreign direct investment. Cultural factors to productivity Cultural factors, such as discrimination of various kinds, can negatively affect productivity such as age discrimination, stereotyping, gender discrimination, racial discrimination, and caste discrimination. Max Weber and the modernization theory suggest that cultural values could affect economic success. However, researchers have gathered evidence that suggest that values are not as deeply ingrained and that changing economic opportunities explain most of the movement into and out of poverty, as opposed to shifts in values into and out of poverty.

Poverty And Hunger In India : A Socio Economic Analysis Of Policies Of Government

Poverty has reduced but still remains a major concern for Nation. Poverty is not only the scarcity of resources, but is set of priorities imposed upon the rest of the world by the rich. Hunger and Poverty are powerful but familiar terms. Everyone kno ws what they mean, yet, they evoke different descriptions for everyone. Even major international organizations mandated to alleviate hunger and poverty use a variety of interpretations. The Hunger Project board member Mohini Giri said, To me, hunger is rape, molestation, dowry, illiteracy, female foeticide, female infanticide, and above all, it is patriarchy. That is what hunger is all about to me. Lack of access to resources or assetlessness is a unifying characteristic of

poverty in all its manifestations. The poor lack ownership of or access to assets such as land, water, forest, dwelling units, credit, literacy, longevity, voice and capital-both physical and social. Those who are severely below the poverty line are largely involved in subsistence type activities for which they get exploitatively poor returns despite suffering extreme physical hardship and undertaking grave risks so as to earn a merge income. It is also said that population root cause of the problems like poverty, hunger, ill-health and

environmental degradation. A brief examination of the history of health would reveal how

utterly erroneous a Malthusian understanding is, since it is indubitably true that over a long time span, expectation of life in societies is positively associated with population. Malthus argued against the possibility, indeed the desirability, of changing social and political institutions that bred want and hunger.

So... what to do?

Overall the opening of Indian markets to the world did over the years contribute to reduce poverty in India by raising the income of a large number of people, and opening access to education to many. Liberalizing the system of exports, imports and trade, along with the development of higher education in big-ish cities have been the major factors leading to the rise of the middle class and reduction of urban poverty in India. However considering the scale of the country, it means that trade reforms and education should penetrate all layers of the society if what you want is to substantially tackle poverty.

As over 2/3 of the population lives in rural areas, public investment should focus on developing agriculture and basic infrastructures, but "for real" this time. While drought has become the plight of so many places on earth, a lot of Indian regions have plenty of water and plenty enough people to exploit the land, rather than being excluded. On top of that, the manufacturing sector is starting to boom so its the best moment to improve agricultural productivity and employ the jobless or underemployed migrating to the cities. The private sector will be more than happy to invest and trade with new regions, but not as long as theyre unprofitable or inaccessible. And that is the role of the state: to provide at least the most basic infrastructures and roads to connect villages. Finding these funds wont even be that hard if the government considers the ineffective subsidies given elsewhere for some fertilizers and such. Plans to reintroduce or reinforce the social safety nets have yet to be implemented. In many ways the situation at the local level has been very liberal for millenniums, because exempt of any form of government intervention, and the result has been all but prosperity. A better understanding of markets as institutions which best develop under certain conditions is crucial to the liberal approach. Market forces must be spurred, a legal framework is necessary to protect citizens & entrepreneurs, more support at the local level is needed (technology investment, education) if the end goal is to promote a grassroots growth that everyone benefits from.

India also needs a more effective tax system as its private sector grows. This will give it enough to finance the right pro-poor policies and review their efficiency. Recently, the decentralization of the administration was an attempt to improve such efficiency. However since local governments were left with more power of oversight, the anti-poverty programs had in fact worse results than before. And thats because those officials simply didnt have much incentive to actually help the poor (do your job doesnt count as an incentive it seems), and the poor not enough power to denounce them to any higher ranked official.
In the end its all a learning process. And even in the most developed countries, dumb stuff happens. In the end its about not sucking too much. But truth be told those are new jobs, new challenges and changing a whole system is quite something. In a country in transition such as India, the politicians run a big part of the show. They set the bar and show how much can be done.

GOVERNMENT STEPS TO DECREASE POVERTY IN INDIA

The government has initiated, sustained, and refined many programs since independence to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country. The poor spend about 80 percent of their income on food while the rest of the population spends more than 60 percent. The price of food is a major determinant of wage scales. Often when food prices rise sharply, rioting and looting follow. Until the late 1970s, the government frequently had difficulty obtaining adequate grain supplies in years of poor harvests. During those times, states with surpluses of grain were cordoned off to force partial sales to public agencies and to keep private traders from shipping grain to deficit areas to secure very high prices; state governments in surplus-grain areas were often less than cooperative. After the late 1970s, the central government, by holding reserve stocks and importing grain adequately and early, maintained sufficient supplies to meet the increased demand during drought years. It also provided more remunerative prices to farmers.

India poverty . In rural areas, the government has undertaken programs to mitigate the worst effects of adverse monsoon rainfall, which affects not only farmers but village artisans and traders when the price of grain rises. The government has supplied water by financing well digging and, since the early 1980s, by power-assisted well drilling; rescinded land taxes for

drought areas; tried to maintain stable food prices; and provided food through a food-for-work program. The actual work accomplished through food-for-work programs is often a secondary consideration, but useful projects sometimes result. Employment is offered at a low daily wage, usually paid in grain, the rationale being that only the truly needy will take jobs at such low pay.

In the 1980s and early 1990s, Indian government programs attempted to provide basic needs at stable, low prices; to increase income through pricing and regulations, such as supplying water from irrigation works, fertilizer, and other inputs; to foster location of industry in backward areas; to increase access to basic social services, such as education, health, and potable water supply; and to help needy groups and deprived areas. The total money spent on such programs for the poor was not discernible from the budget data, but probably exceeded 10 percent of planned budget outlays. India has had a number of antipoverty programs since the early 1960s. These include, among others, the National Rural Employment Programme and the Rural Landless Employment Guarantee Programme. The National Rural Employment Programme evolved in FY 1980 from the earlier Food for Work Programme to use unemployed and underemployed workers to build productive community assets. The Rural Landless Employment Guarantee Programme was instituted in FY 1983 to address the plight of the hard-core rural poor by expanding employment opportunities and building the rural infrastructure as a means of encouraging rapid economic growth. There were many problems with the implementation of these and otherschemes, but observers credit them with helping reduce poverty. To improve the effectiveness of the National Rural Employment Programme, in 1989 it was combined with the Rural Landless Employment Guarantee Programme and renamed Jawahar Rozgar Yojana, or Jawahar Employment Plan (see Development Programs, ch. 7). State governments are important participants in antipoverty programs. The constitution assigns responsibility to the states in a number of matters, including ownership, redistribution, improvement, and taxation of land (see The Constitutional Framework, ch. 8). State governments implement most central government programs concerned with land reform and the situation of small landless farmers. The central government tries to establish programs and norms among the states and union territories, but implementation has often remained at the lower bureaucratic levels. In some matters concerning subsoil rights and irrigation projects, the central government exerts political and financial leverage to obtain its

objectives, but the states sometimes modify or retard the impact of central government policies and programs.

Development Planning
Planning in India dates back to the 1930s. Even before independence, the colonial government had established a planning board that lasted from 1944 to 1946. Private industrialists and economists published three development plans in 1944. India's leaders adopted the principle of formal economic planning soon after independence as an effective way to intervene in the economy to foster growth and social justice. The Planning Commission was established in 1950. Responsible only to the prime minister, the commission is independent of the cabinet. The prime minister is chairperson of the commission, and the minister of state with independent charge for planning and program implementation serves as deputy chairperson. A staff drafts national plans under the guidance of the commission; draft plans are presented for approval to the National Development Council, which consists of the Planning Commission and the chief ministers of the states. The council can make changes in the draft plan. After council approval, the draft is presented to the cabinet and subsequently to Parliament, whose approval makes the plan an operating document for central and state governments (see The Legislature; Local Government, ch. 8). The First Five-Year Plan (FY 1951-55) attempted to stimulate balanced economic development while correcting imbalances caused by World War II and partition. Agriculture, including projects that combined irrigation and power generation, received priority. By contrast, the Second Five-Year Plan (FY 1956-60) emphasized industrialization, particularly basic, heavy industries in the public sector, and improvement of the economic infrastructure. The plan also stressed social goals, such as more equal distribution of income and extension of the benefits of economic development to the large number of disadvantaged people. The Third Five-Year Plan (FY 1961-65) aimed at a substantial rise in national and per capita income while expanding the industrial base and rectifying the neglect of agriculture in the previous plan. The third plan called for national income to grow at a rate of more than 5 percent a year; self-sufficiency in food grains was anticipated in the mid-1960s. Economic difficulties disrupted the planning process in the mid-1960s. In 1962, when a brief war was fought with China on the Himalayan frontier, agricultural output was stagnating, industrial production was considerably below expectations, and the economy was growing at about half of the planned rate (see Nehru's Legacy, ch. 1). Defense expenditures increased

sharply, and the increased foreign aid needed to maintain development expenditures eventually provided 28 percent of public development spending. Midway through the third plan, it was clear that its goals could not be achieved. Food prices rose in 1963, causing rioting and looting of grain warehouses in 1964. War with Pakistan in 1965 sharply reduced the foreign aid available. Successive severe droughts in 1965 and 1966 further disrupted the economy and planning. Three annual plans guided development between FY 1966 and FY 1968 while plan policies and strategies were reevaluated. Immediate attention centered on increasing agricultural growth, stimulating exports, and searching for efficient uses of industrial assets. Agriculture was to be expanded, largely through the supply of inputs to take advantage of new high-yield seeds becoming available for food grains. The rupee was substantially devalued in 1966, and export incentives were adjusted to promote exports. Controls affecting industry were simplified, and greater reliance was placed on the price mechanism to achieve industrial efficiency.

Poverty And Hunger In India : A Socio Economic Analysis Of Policies Of Government

Poverty has reduced but still remains a major concern for Nation. Poverty is not only the scarcity of resources, but is set of priorities imposed upon the rest of the world by the rich. Hunger and Poverty are powerful but familiar terms. Everyone knows what they mean, yet, they evoke different descriptions for everyone. Even major international organizations mandated to alleviate hunger and poverty use a variety of interpretations. The Hunger Project board member Mohini Giri said, To me, hunger is rape, molestation, dowry, illiteracy, female foeticide, female infanticide, and above all, it is patriarchy. That is what hunger is all about to me. Lack of access to resources or assetlessness is a unifying characteristic of

poverty in all its manifestations. The poor lack ownership of or access to assets such as land, water, forest, dwelling units, credit, literacy, longevity, voice and capital-both physical and social. Those who are severely below the poverty line are largely involved in subsistence type activities for which they get exploitatively poor returns despite suffering extreme physical hardship and undertaking grave risks so as to earn a merge income. It is also said that population root cause of the problems like poverty, hunger, ill-health and

environmental degradation. A brief examination of the history of health would reveal how utterly erroneous a Malthusian understanding is, since it is indubitably true that over a long time span, expectation of life in societies is positively associated with population. Malthus

argued against the possibility, indeed the desirability, of changing social and political institutions that bred want and hunger.

Conclusion
Poverty, slums and urban squat are not going to go away in next 20 to 25 years. Reversal of this phenomenon will begin after sufficient economic progress had been made. Eight percent GDP growths is a good sign. With quadrupled GDP in 25 years, there is a good chance that the new and upcoming generation may stay away from slum dwelling. It may take another 25 years before the slums are vacated.