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REVIEW OF POVERTY
1.1 Introduction
Summary
References
1
CHAPTER I
REVIEW OF POVERTY
1.1 INTRODUCATION
Poverty is not new word to Indian ears. Indian literature of all genres is full of
plots woven around the dehumanizing existence and misery of the poor.1 The problem
of poverty and unemployment is considered as the biggest challenge to development
planning in India. High poverty levels are synonymous with poor quality of life,
deprivation, malnutrition, illiteracy and low human resource development.2 The
problem of poverty has continued to remain the central challenge of development at
the global level.3
Poverty, like beauty, is easier to recognize than to define and compare. Some
social workers and economists, nevertheless, define poverty with reference to certain
basic amenities such as food, floor space per person and medical care, etc. When a
family lacks a certain proportion of basic amenities it is considered poor, regardless of
income. The definition is broad enough to cover a miser who denies himself basic
amenities even though he has the ability to purchase these, and a family who has zero
1
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no.121
2
Ibid page no.213
3
Ibid page no.123
4
Ibid page no.197
5
Ibid page no. 212
2
income but manages to fulfill the basic needs by borrowing, reducing saving, or living
on the charity of friends and relatives.6
a) DEFINITIONS OF POVERTY:
Poverty is defined in many different ways and using many different standards.
The definitions of poverty are as follow:
WORLD BANK :
UNITED NATIONS :
6
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no.212
7
Ruddar Datta, K.P.M. Sundharam, Indian Economy, Chand and company Ltd. New Delhi 2008, page
no.361
8
Ajit Kumar Sinha, Raj Kumar Sen, Economics of Amarty Sen, Deep & Deep Publications, Pvt. Ltd.
New Delhi, 2001, page no.232
9
http://en.wikipedia.org/wiki/poverty
3
often implies living in marginal or fragile environments, without access to clean water
or sanitation.”10
AMARTY SEN:
GODDARD :
Attempts have been made in all societies to define poverty, but all of them are
conditioned by the vision of minimum or good life obtaining in society. There is an
effort in all definitions of poverty to approach the average level of living in a society
and as such these definitions reflect the existence of inequalities in a society and the
extent to which different societies are prepared to tolerate them.13
10
http: en.wikipedia.org/wiki/poverty
11
Jonathan Haughton, Shandur R. Khandker Handbook on Poverty+Inequality, Rawat Publications
Jaipur 2010, page no.171
12
http:// www.preservarticles.com
13
Ruddar Datt. Growth, Poverty and Equity, Deep & Deep Publications, New Delhi 2008, page no.361
14
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no 103
4
Literally, poverty means scarcity or few. From social and economic point of
view, it refers to that state or condition which fails to provide minimum necessities of
life. Thus, poverty leads to extreme lower standard of living, denying even the basic
requirements of life to a vast majority of population. Poverty is a state in which a
section of society is unable to get the basic necessities of life.15
15
http:// www.preservarticles.com
16
http:// www.preservearticles.com.
17
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no 184
18
Suresh Chand, Aggarwal, Rashmi Agrawal, Rakesh Shahani, Indian Economic Development and
Business Emerging Issues and outlook, New Century Publications, New Delhi, India, 2005. Page
no.108.
5
1.4 NATURE OF POVERTY LINE:
Defining poverty line is the first step for estimating poverty. The poverty
estimates are generally divided into an official estimate, from the Planning
Commission and non-official estimates by various researchers and others. The official
estimates have been much lower than the non-official estimates. The poverty line so
defined has been updated over time to take care of changes in price levels.19
It is generally agreed in our country that only they who fail to reach a certain
minimum consumption standard be regarded as poor. But the experts who have
examined the question of poverty quantitatively find it difficult to agree on the
amount of income that will ensure the minimum consumption standard at a point of
time.20
The strength and weakness of defining poverty lines based on three methods
3. Subjective evaluation
The cost of basic needs approach is most commonly used. It first estimates the
cost of acquiring enough food for adequate nutrition usually 2,100 Calories per person
per day and then adds the cost of other essentials such as clothing and shelter. When
price information is unavailable, the food energy intake method can be used. This
method plots expenditure per capita against food consumption (in calories per person
per day) to determine the expenditure (or income) level at which a household acquires
enough food. Subjective poverty lines are based on asking people what minimum
income level is needed just to make ends meet.21
19
Rumki Basu, Economic Liberalization and Poverty Alleviation, Deep &Deep Publication New
Delhi 2000 page no.42,43
20
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no 108
21
Jonathan Haughton, Shandur R. Khandker Handbook on Poverty +Inequality, Rawat Publications
Jaipur 2010, page no.39
6
A) ALTERNATIVE ESTIMATES OF POVERTY IN INDIA
To determine the poverty line various committees have been formed after
independence.
Table No.1.1
Alternative Estimates of Poverty in India
Sr.No. Author Year Criterion of Poverty line Percentage
7
Sr.No. Author Year Criterion of Poverty line Percentage
In 1977, the Planning Commission had set up the “Task Force on Projections
of minimum Needs and Effective Consumption Demand” for an assessment of the
problem of poverty and determining a qualitative index of poverty. The Task Force
22
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no,124,126
8
defined the poverty line as the mid–point of the monthly per capita expenditure
having a daily calorie intake of 2,400 per person in rural area and 2,100 in urban
areas.23
The new updated data released by the Planning Commission, based on the
price indices computed from the 66th Round NSS (2009-10) data on Household
Consumer Expenditure Survey. The updated poverty estimates of the Tendulkar
Committee have lowered the poverty line itself from ` 32 a day to `28.24
23
Ajit Kumar Sinha, Raj Kumar Sen, Economics of Amarty Sen, Deep & Deep Publications, Pvt. Ltd.
New Delhi, 2001, page no.232,233
24
Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 Page no.76,78
9
15 Uttarakhand 719.5 898.6 32.7 18.0
16 Himachal 708 888.3 22.9 9.5
17 Assam 691.7 871 34.4 37.9
18 Rajasthan 755 846 34.4 24.8
19 J& K 722.9 845.4 13.1 9.4
20 Jharkhand 616.3 831.2 45.3 39.1
21 W. Bengal 643.2 830.6 34.2 26.7
22 Kerala 775.3 830.7 19.6 12.0
23 Chhattisgarh 617.3 806.7 49.4 48.7
24 Tamil Nadu 639 800.8 29.4 17.1
25 U. P. 663.4 799.9 40.9 37.7
26 Tripura 663.4 782.7 40.0 17.6
27 Pondicherry 641 777.7 14.2 1.2
28 Bihar 655.6 775.3 54.4 53.5
29 M. P. 631.9 771.7 48.6 36.7
30 Orissa 567.1 736 57.2 37.0
All India 672.8 859.6 32.7% 29.8%
Source: Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 Pg. 76
The all-India poverty ratio declined from 37.2 percentages in 2004-05 to 29.8
percentages in 2009-10. Poverty Ratio in Himachal, M. P., Maharashtra, Orissa,
Sikkim, Tamil Nadu, Karnataka, Uttarakhand declined by about 10 percent or more
and in Assam, Delhi, Manipur, Meghalaya, Mizoram, and Nagaland, Meghalaya,
Mizoram and Nagaland poverty increased in 2009-10.
An absolute poverty line is fixed in terms of the standard indicator being used
and fixed over the entire domain of the poverty comparison. An absolute poverty line
is essential if one is trying to judge the effect of anti-poverty policies over time or to
estimate impact of a project (for example, microcredit) on poverty.25In the absolute
standard minimum physical quantities of serials, pules, milk, butter etc. are
determined for a substance level and then the price quotation convert into monetary
terms the physical quantities.26
25
Jonathan Haughton, Shandur R. Khandker Handbook on Poverty +Inequality, Rawat Publications
Jaipur 2010, page no 45
26
Ruddar Datt. Growth, Poverty and Equity, Deep & Deep Publications, New Delhi 2008, page no.361
10
1.6 RELATIVE POVERTY
The defect of the latter approach is that it indicates the relative position of
different segments of the population in the income hierarchy. Even in affluent
societies, such pockets of poverty exist. But for underdeveloped countries, it is the
existence of mass poverty that is the cause for concern.28
Rural poverty refers to poverty found in rural areas, including factors of rural
society, rural economy and rural political systems that give rise to the poverty found
there. Rural poverty is the main problem in India. Poverty studies deal mostly with
rural areas. This is because the vast majority of the chronically poor in Asia are living
in rural settlements. In the year 2000, the planning commission of India estimated that
around 70 percent of the poor including both transient and chronically poor lived in
rural areas. Nearly 200 million people in rural areas were poor while around 67
million people in urban areas were poor.29
2) Lack of capital
4) Illiteracy
5) Regional disparities
27
http://en.wikipedia.org/wiki/poverty
28
Ruddar Datt. Growth, Poverty and Equity, Deep & Deep Publications, New Delhi 2008, page no.362
29
John Malcolm Dowling, Yap Chin Fang Chronic Poverty in Asia –Causes consequences & Policies,
Singapore World Scientific Publishing Co. Pvt. Ltd. 2009, page no.35
11
6) Lack of alternate employment opportunities other than agriculture
India is a part of the global trends where an increasing number of people live
in urban areas. The number of towns and the absolute urban population in India has
increased steadily over the last 60 years. More significant for policy formulation is the
share of urban population to total population (Graph 1), which has grown from 17.3
per cent in 1951 to 31.16 per cent in 2011. Varying projections place urban population
at about 590 million – 600 million in 2030.32
Graph 1.1
Urban Population in India (1951-2011)
46.1
41.4
38.2 36.4
31.3 31.8
26.4
31.2
27.8
25.7
23.3
19.9
17.3 18
Source: Report of the Working Group on Urban Poverty, Slums and Service Delivery System, Steering
Committee on Urbanization, Planning Commission, New Delhi, October, 2011.pg.no.2
30
Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 Pg 77.
31
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no110
32
Report of the Working Group on Urban Poverty, Slums and Service Delivery System, Steering
Committee on Urbanization, Planning Commission, New Delhi, October, 2011.pg.no.2
12
Population estimates indicate that at a certain point in 2007, the world’s urban
population will equal the world’s rural population for the first time in history. The
growth in the urban population will continue to rise, projected to reach almost 5
billion in 2030. Much of this urbanization is predicted to take place in the developing
world, with Asia and Africa having the largest urban populations.
13
available for poverty mapping and disaggregated analysis, and has also contributed to
strengthening our knowledge base on the characteristics and estimation of urban
poverty. Finally, at the global level there have been a number of recent reports
addressing issues of urban poverty to coincide with the shift in demographic trends
towards urban.33
Based on this analysis, approximately 750 million people living in urban areas
in developing countries were below the poverty line of $2/day in 2002, and 290
million using the $1/day line. This represents approximately one third of all urban
residents ($2/day) or 13 percent ($1/day), and one quarter of the total poor in
developing countries. For the same time period, 2002, almost half of the world’s
urban poor were in South Asia (46 percent) and another third in Sub-Saharan Africa
(SSA) (34 percent) for $1/day line. Using the $2/day line, these proportions were 40
percent for Africa and 22 percent for South Asia (SAS). The incidence of urban
poverty, or the share of poor as a proportion of the urban population, is highest for
South Asia and Sub Saharan Africa. Urban poverty incidence was notably lower in
East Asia and the Pacific (EAP), Eastern Europe and Central Asia (ECA) and Middle
East and North Africa (MENA) than the other regions reflecting initial conditions.
Latin America and the Caribbean (LAC) and ECA have the greatest proportion of
33
Urban Paper, Urban Poverty: A Global View Judy L. Baker THE World Bank Washington
D.C.2008, Pg.no.1,2
14
urban poor relative to the total poor, as a result of the high urbanization rates in these
regions. Overall, MENA has the lowest incidence and share of urban poverty.34
Table No.1.3
Urban Poverty Estimates, 2002, using $1.08/day and $2.15/day lines (in1993 PPP)
Region No. of No.of Headcount Headcount Index Urban share of Urban Urban
urban urban Index (%) (%)’ $2/day the poor$1.08/ share of share of
poor (in poor (in “$1/day” day the poor $ the
millions) millions) 2.15/day population
“$1/day” “$/day”
EAP 16 126 2.2 17.7 6.7 15.1 38.8
China 4 53 0.8 10.7 2.2 9.5 37.7
ECA 2 32 0.8 10.7 33.4 49.9 63.5
LAC 38 111 9.5 27.5 59.0 65.6 76.2
MNA 1 20 0.7 12.4 19.9 29.3 55.8
SAC 135 297 34.6 76.2 24.9 25.2 27.8
India 116 236 39.3 80.1 26.0 26.0 28.1
SSA 99 168 40.4 68.5 30.2 31.1 35.2
Total 291 752 13.2 34.0 24.6 26.4 42.3
Source: - Urban Paper, Urban Poverty: A Global View Judy L. Baker THE World Bank Washington
D.C.2008, Pg.no.3
B) URBAN POVERTY AND PROBLEMS:
People in urban areas are homeless and slum households are deprived of good
housing, they do not have access to clean water, hygienic systems of waste disposal
and live in polluted and degraded environments. Urban poverty is easily discernible
through lack of security of land tenure, access to affordable shelter and basic
amenities, particularly, health, education and social security. Urban poverty is linked
to the aspects of social inclusion, city-wide infrastructure and basic service delivery
systems, opportunities for skill development and employment, responsiveness of local
governance structures and policies and programmes impacting on urban environment,
Development and management. The bulk of the urban poor live in extremely deprived
conditions with insufficient physical amenities like low-cost water supply, sanitation,
sewerage, drainage, community centres and social services related to health care,
nutrition, pre-school and non-formal education.
34
Urban Paper, Urban Poverty: A Global View Judy L. Baker THE World Bank Washington D.C.
2008, Pg.no 2,.3
15
Workers engaged in the urban informal sector form the bulk of urban poor.
Workers in this sector get low wages or if they are self-employed, their income is
meager. A large section of this population consists of low-skilled migrants from
villages and smaller towns. Hence, for these people, right from the time of their entry
to the city they become a part of the informal sector as they have neither the skills nor
the opportunities to enter better-paid and more secure formal sector jobs. They thus
move from one level of poverty, at their place of origin, to another level of poverty, at
their destination. At the same time there is a growing section of workers in the formal
sector who have lost their jobs and are compelled to work in the informal sector. For
these people and their families this change means a reduction in their standard of
living and insecure, unregulated employment.35
35
Design of Basic Services to Urban Poor (BSUP) Fund Study Report Assigned by Government of
India, Ministry of Housing and Urban Poverty Alleviation Conducted by Centre for Good
Governance Hyderabad December 2010, Page no.11,12
16
Inadequate provision of basic services such as, day care/schools/vocational training,
healthcare, emergency services public transport, communications, law enforcement.
Inadequate protection of poorer groups rights through the operation of the law:
including laws and regulations regarding civil and political rights, occupational health
and safety, pollution control environmental health, protection from violence and other
crimes, protection from discrimination and exploitation.
Source: An Exploratory Analysis of Deprivation and Ill Health led Poverty in Urban India A Case
Study of Delhi, Samik Chowdhury, Aasha Kapur Mehta, Suparna Das, Sourabh Ghosh Indian
Institute of Public Administration, New Delhi, Chronic Poverty Research Centre,2011, page
no,8,9
36
John Malcolm Dowling, Yap Chin Fang Chronic Poverty In Asia –Causes consequences & Policies,
Singapore World Scientific Publishing Co. Pvt. Ltd. 2009, page no.35
17
2) Lack of vocational education or training
c) Reclassification of towns
The common notion that migration largely fuels urban growth is only partially
correct. Therefore, it is necessary to view urban poverty as distinct from rural poverty
and not as mere transfer of rural poverty into urban areas.
37
Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 Page no.77
38
Uma Kapila, Indian Economy-Issues in Development and Planning and Sectoral Aspects, Academic
Foundation, New Delhi, 2005. page no.217
39
Rumki Basu, Economic Liberalization and Poverty Alleviation, Deep & Deep Publication New Delhi
2000, page no.58
18
Programmes should be increasingly based on approaches and methods which involve
the poor themselves in the process of poverty eradication and economic growth. This
is possible through a process of social mobilization, encouraging participatory
approaches and institutions and empowerment of the poor.40
There is no doubt that growth is important for poverty reduction and pattern of
growth has a specific role in this process. At the same time, it is also recognized that
growth is necessary but not sufficient for removing poverty. Some poor are able to
take up the opportunity offered by a growing economy, while some others are not, due
to inadequacy of their capabilities in terms of resource endowment, skills and access
to the system providing the opportunities. That is why programmes either to directly
redistribute assets and incomes or to increase capabilities through public spending
directed towards the poor have always been a part of public policy, not only with a
view to alleviating poverty, but also for ensuring social justice and equity. A Large
number of such programmes have been in operation in India, some on a continuous
basis, others from time to time.
1) Assisting the poor to acquire assets and or start business enterprise to create self-
employment,
40
Uma Kapila, Indian Economy-Issues in Development and Planning and Sectoral Aspects, Academic
Foundation, New Delhi, 2005, page no.206
41
Uma Kapila, India’s Economic Development, since 1947, Academic Foundation, Delhi 2008.
Pg. No, 301
19
should be not only on increasing his income but also providing him sufficient caloric
intake, regular and permanent employment source, better health facilities and
development of overall social infrastructure.42
42
K. Nageswara Rao, Poverty in India Global and Regional Dimensions Deep & Deep Publication
2005, page no,216,217
20
20 Janashree Bima Yojana 2000
21 Pradhan Mantri Gramodaya Yojana 2000
22 Antyodaya Anna Yojana 2000
23 Sampurna Gram in Rozgar Yojana 2001
24 Valmiki Ambedkar Awas Yojana 2001
25 Jawaharlal National Urban Renewal Mission 2005
26 National Rural Employment Guarantee Scheme (MNREGA) 2006
Source: Pratiyogita Darpan, General Studies Indian Economy Upkar Prakashan Agra, 2012
Pg.No.206-208.
43
Economic Survey of Maharashtra, 2012-13, p.no. 188
21
providing wage employment. During 2001-02, 22 lakh tons of rice and 12.49 lakh
tons of wheat were allocated under this scheme.44
This Yojana was launched on December 25, 2001 by the Prime Minister.
Under the scheme 1 crore poorest families out of the BPL families covered under the
targeted public distribution are identified. 25 kgs. of food grains were made available
to each eligible family at a highly subsidies rate of ` 2 per kg. for wheat and ` 3 per
kg. for rice.45
The states are required to bear the distribution, cost, including margin to
dealers and retailers as well as the transportation cost. The scale of issue that was
initially 25 kg. per family per month has been increased to 35 kg. per family per
month with effect from 1st April 2002.46
This scheme covers the urban self-employment programme and the urban
wage employment programme. It replaced various Programmes operating earlier for
44
Suresh Chand, Aggarwal, Rashmi Agrawal, Rakesh Shahani, Indian Economic Development and
Business Emerging Issues and outlook, New Century Publications, New Delhi, India, 2005. Page
no119
45
ibid. Page no121
46
Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 Pg. no.190
47
Economic Survey of Maharashtra, 2012-13, p.no. 187
22
reduction of urban poverty. The Government has recently revamped the SJSRY with
effect from April 1, 2009.The scheme provides gainful employment ventures by the
urban poor and also providing wage employment and utilizing their labour for
construction of socially and economically useful public assets.48
As per the estimates of poverty by the Planning Commission, based on the 55th
Round of NSSO covering the period July 1999 to June 2000, in the last two decades
there was a significant decline in proportion of people living below poverty line from
51.3 percent in 1977-78 to 26.1 percent in 1999-2000. In absolute terms, the number
of the poor declined from 328.9 million in 1977-78 to 260.3 million in 1999-2000.
48
Pratiyogita Darpan, Upkar Prakashan, Agra, 2012 page no.189
23
The Tenth Plan (2002-07) set a target of reduction in poverty ratio by five
percentage points to 19.3 per cent by 2007 and by 15 percentage points by 2012.The
targets for rural and urban poverty in 20007 are 21.1 percent and 15.1 per cent
respectively.49
SUMMARY :
The Present chapter is based on definitions, concept, nature and types of
poverty. This chapter focuses on concept of Poverty and Poverty Alleviation
Programmes. Poverty continues to be the most important problem in the Indian
economy. The meaning of poverty is clearly mentioned in this chapter. Various
definition about poverty are included in this chapter viz, World Bank, United Nations,
Amarty Sen etc. As Poverty is considered as a relative concept, no individual or
country is absolutely poor or rich. The definition of poverty in terms of subsistence
level of living is widely accepted.
This chapter includes the types of poverty i.e. Absolute and Relative Poverty.
Relative Poverty views poverty as socially defined and dependent on social context
hence relative poverty is a measure of income inequality. This chapter emphasizes on
Urban Poverty. The scope of urban poverty, urban poverty and problem, different
aspects of urban poverty, multidimensional nature of urban poverty includes in this
chapter. The basic reasons of creating poverty in rural and urban areas are clearly
mentioned. The alleviation of poverty has been a major objective of planned
development in India. Several Poverty alleviation and employment generation
programmes are being implemented by the Government. Some important Programmes
49
Uma Kapila, India’s Economic Development, since 1947, Academic Foundation, Delhi 2008. Pg.No.
291,292
24
are National Rural Livelihood Mission, Swarna Jayanti Gram Swa- Rozgar Yojana,
Sampoorna Grameen Rozgar Yojana, Prime Ministers Employment Generation
Programmes, Valmiki Ambedkar Awas Yojana, Swarna Jayanti Shahari Rozgar Yojana
etc.
25
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26
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***
28