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MAHARASHTRA NATIONAL LAW UNIVERSITY, MUMBAI

LAW AND ECONOMICS III

SEMESTER VI

FIRST DRAFT

TOPIC: CRITICAL ANALYSIS OF VICIOUS CIRCLE OF POVERTY

Submitted To: Prof. Rohit Jadhav Submitted By: Sakshi Salunke

Enrolment No: 2017043

B.A LL. B(Hons.) 2020

ABSTRACT

Poverty in India is one of the biggest issue we are facing today. Almost every third poor in
the world is Indian. This paper gives insight about the poverty, its types, regional disparity,
measures for its removal, and the initiatives taken by the government in this regard. Data
collected for this paper is from secondary source. This paper elaborates the reason for the
poverty in detail and its corrective measures can be taken. Poverty is a vicious cycle, a famous
quote which describes this perfectly is “you are poor because you are poor”. Chronic poverty
is the issue we are dealing with from a long period of time. This paper also explains the
parameters on which poverty is defined, what should be included and what not, poverty line,
state of people below poverty line and measures to bring them above the poverty line,
difference between poverty in urban areas and rural areas.
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INDEX

1. INTRODUCTION………………………………………………….03
a) MEANING OF POVERTY........................................................................03
2. VICIOUS CIRCLE OF POVERTY………………………………04
3. THREE CAUSES OF VCP………………………………………..05
a) SUPPLY SIDE OF VICIOUS CIRCLE……………………….....................06

b) DEMAND SIDE OF VICIOUS CIRCLE...................................................07

c) VICIOUS CIRCLE OF MARKET IMPERFECTIONS…….......................08

4. SOLUTIONS TO SUPPLY SIDE OF VCP.....................................10

5. SOLUTIONS TO DEMAND SIDE OF VCP...................................10
6. OTHER SOLUTIONS TO VICIOUS CIRCLE OF POVERTY...11
7. HOW TO BREAK VICIOUS CIRCLE OF POVERTY................11
8. CRITICISM OF VICIOUS CIRCLE OF POVERTY....................14
9. CONCLUSION...................................................................................15
10.BIBLIOGRAPHY...............................................................................15
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INTRODUCTION

“Poverty as consisting of a deprivation of a capabilities”, So that the poor have inadequate

resources (financial, information, and so on) to participate fully in society in short, they are
socially excluded”.

- Amartya Sen

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. 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. The problem of poverty has continued to remain the
central challenge of development at the global level. Poverty is a state of an individual, a family
or a society where people are unable to fulfil even their basic necessities of life. When a
substantial segment of a society is deprived of the minimum level of living and continues at a
bare subsistence level, that society is said to be plagued with mass poverty. Poverty is a stark
reality in India, and therefore poverty reduction was always given a top priority by the
Government right from the beginning of the plan period. The Present chapter is related with
Poverty. It elaborates the concept of Poverty and Poverty line. It also explains Absolute and
Relative Poverty. Rural and Urban Poverty is explained in this chapter. This chapter also
focuses on various Programmes on Poverty Alleviation.1

Meaning of the poverty

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 income but manages to fulfil the basic needs by borrowing,
reducing saving, or living on the charity of friends and relatives. Poverty can be defined as a

1
https://www.researchgate.net/publication/241758669_Risk_Attitudes_in_the_Vicious_Circle_of_Poverty
https://nptel.ac.in/content/storage2/courses/109103022/pdf/mod2/lec8.pdf
https://www.jumpstartyourdreamlife.com/vicious-and-virtuous-cycles/
 Page |4

social phenomenon in which a section of the society is unable to fulfil even its basic necessities
of life.2 In India the generally accepted definition of poverty emphasizes minimum level of
living rather than a reasonable level of living. Poverty is defined as a lack of income to acquire
minimum necessities of life; per capita income, per capita consumption expenditure, per capita
calorie intake and availability of the size of land holding are the main indicators of poverty in
different definitions.3

VICIOUS CIRCLE OF POVERTY

According to Prof.Nurkse’s, VCP’S model states, "Implies a circular constellation of forces

tending to act and react in such a way as to keep a country in the state of poverty".5 In such
state of affairs, the process of capital formation remains obstructed and restricted. This VCP is
presented as:

We start with low real income which results in a meagre savings which in turn will check
investment. Low level of investment would create deficiency of capital which in second round
leads to low productivity. This again results in low income. Here, the circle perpetuates the low
level of development. From the supply side, there is low income, low savings, low investment,

2
. https://www.scribd.com/document/297914581/Demand-and-Supply-Vicious-circle-of-Poverty
3
Chen, James. “Poverty Trap Definition.” Investopedia. Investopedia, January 29, 2020.
https://www.investopedia.com/terms/p/poverty-trap.asp.
4
https://www.civilsdaily.com/poverty-in-india-types-of-poverty-causes-of-poverty-vicious-circle-of-poverty/
5
http://studiesnote.blogspot.com/2012/10/vicious-circle-of-poverty.html
 Page |5

capital deficiency and low productivity. On the demand side, low income, low demand for
goods, limited home market and low investment.6

According to Nurkse, a breakthrough on demand side can be brought about by dashing

initiatives on the part of entrepreneurs. On the supply side the disguised unemployment ranging
between 20% to 30% of total agriculture labour force can be mobilized for financing capital
formation. And the parents of such disguised unemployed will go on feeding them. It means
that in Nurkse's model the hidden food surplus will finance the process of economic growth.8

THREE CAUSES OF VICIOUS CIRCLE OF POVERTY

Different economists have different opinions about the vicious circle of poverty. According to
Prof. Nurkse, “The main reason of vicious circle of poverty is the lack of capital formation.”
Similarly, Kindle Berger opined that vicious circle of poverty takes place due to the small size
of the market.9 However, the reasons of vicious circle of poverty can be classified into three
groups:

6
Turri, Sajid Khan. n.d. “Vicious Circle of Poverty.” Studies Note. Accessed April 19, 2020.
http://studiesnote.blogspot.com/2012/10/vicious-circle-of-poverty.html.
7
https://www.google.co.in/url?sa=i&url=http%3A%2F%2Fwww.economicsdiscussion.net%2Fcapital-
formation%2Fthe-vicious-circle%2Fvicious-circle-of-poverty-and-the-scarcity-of-capital-with-
diagram%2F11830&psig=AOvVaw2F_YRNRB01K4I_a2xouBKq&ust=1587406125522000&source=images&
cd=vfe&ved=0CAIQjRxqFwoTCKDDzP6K9egCFQAAAAAdAAAAABAJ
8
http://publish.illinois.edu/zzhangecon/files/2015/12/VCP_DU.pdf
9
https://www.jumpstartyourdreamlife.com/vicious-and-virtuous-cycles/
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(a) Supply side of vicious circle.

(b) Demand side of vicious circle.

(c) Vicious Circle of Market Imperfections.

A. Supply Side of Vicious Circle:

Supply side of vicious circle indicates that in underdeveloped countries, productivity is so low
that it is not enough for capital formation. According to Samuelson, “The backward nations
cannot get their heads above water because their production is so low that they can spare
nothing for capital formation by which their standard of living could be raised.” In the words
of Prof. Nurkse on the supply side there is small capacity to save resulting from low level of
national income. The low real income reflects low productivity, which in turn is due largely to
the lack of capital. The lack of capital is a result of the small capacity to save and so the circle
is complete.10

Low Income → Low Saving → Low Investment → Low Production → Low Income

11

Reflects of the UDCs are poor. In these countries’ poverty refers to low real income. Real
income remains low due to low level of capital and capital is low because of low level of saving.
The reason of low saving is low level of income. Those, it becomes clear from the above
analysis, that the main reason of low level of poverty and income is the low level of saving.
Consequently, investment is not possible in production channels. A man can save only when

10
https://pdfs.semanticscholar.org/b7ab/e0c1ea070777cca7535f14652ebe2aeace18.pdf
11
https://www.google.co.in/search?q=project+on+breaking+the+vicious+circle+of+poverty+in+the+indian+eco
nomy&sxsrf=ALeKk01_2vQBkxL8_Umq3pSYrR-
jABkA2A:1587312808666&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiXkO6A8fToAhVlILcAHbgEDE0
Q_AUoAnoECA0QBA&biw=2049&bih=994#imgrc=NNzpXWY4oREbqM
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his real income exceeds consumption. Generally, in UDC, society is divided into two groups
viz.: rich and poor. In such countries, majority of farmers are from poor groups. Their income
is very low because they are engaged in subsistence farming. The methods of cultivation are
old and unskilled.12 The productivity of labour is low due to unskilled labour, disguised
unemployment and immobility of labour. Under such situation, a huge chunk of national
product is consumed on consumption purposes. In this way, they lack in saving, investment
and so the capital formation. Although, the rich group of the society is in a position to save.
But they spend their saving on luxurious goods instead of saving. They gave preference to
foreign products. Thus, their demand does not enlarge the size of the market. Basically, in an
economy, investment does not depend only on saving, but also on ability to invest and
willingness to invest.13 These countries lack in investment facilities due to low level of demand.
The quantity of investment depends on able entrepreneurs. Able entrepreneurs have to take risk
and put hard work to set up a new industry. The social atmosphere of the rich class is such that
they do not dare to take risk. They prefer to put some labourers on work. Moreover, in UDCs,
there exist medium income group who prefer to work in trade, services etc. instead of capital
formation. The main reasons responsible for this are lack of capital for investment in industries,
lack of industrial finance, lack of skilled labour, lack of transportation and social overhead
etc.14

B. Demand Side of Vicious Circle:

According to Prof. Nurkse, “On the demand side, the inducement of invest may he low because
of the small purchasing power of the people, which is due to the small real income, which is
again due to loco productivity. The level of productivity, however, is the result of the small
amount of capital used in production which in turn may be caused or at least partly caused by
small inducement to invest.15

12
Sengaonkar, Sumedh. “India's Vicious Cycle of Poverty and Health.” Indian Folk, October 13, 2018.
https://www.indianfolk.com/indias-vicious-cycle-poverty-health-edited/.
13
https://www.jstor.org/stable/40436704?seq=1#metadata_info_tab_contents
14
Perry, Guillermo E., Arias, López, J. Humberto, Maloney, William F., Servén, and Luis. “Poverty Reduction
and Growth: Virtuous and Vicious Circles.” Open Knowledge Repository, January 1, 1970.
https://openknowledge.worldbank.org/handle/10986/6997.
15
https://openknowledge.worldbank.org/handle/10986/6997
 Page |8

Low Income → Low Demand Low Investment → Low Productivity → Low Income

16

The above figure 2 shows that low income leads to low demand which in turn results in low
investment and so the low level of capital which again leads to low productivity and low
income. The main reason of the poverty in these countries is the low level of demand.
Consequently, the size of market remains low. The small size of the market becomes a hurdle
in the path of inducement to invest.17 Thus, the investors do not establish industries on large
scale and productivity remains low and so the income. In order to prove this, Prof. Nurkse has
cited many examples. For instance, an entrepreneur will not establish a modern shoe factory in
a country where the people are poverty ridden and unable to purchase shoes. Similarly, iron
and steel industry in Chile will produce so much iron and steel in three hours that the entire
demand of the country can be fulfilled.18 Thus, according to Nurkse, “In underdeveloped
countries, on demand side, low purchasing power of the people results in low productivity.”19

C. Vicious Circle of Market Imperfections:

Meier and Baldwin have described a third vicious circle based on capital deficiency due to
market imperfections. In underdeveloped countries, resources are underdeveloped, and people
are economically backward. Existence of market imperfections prevents optimum allocation
and utilization of natural resources and the result is underdevelopment and this, in turn, leads

16
https://www.google.co.in/search?q=vicious+circle+of+poverty+in+india&sxsrf=ALeKk01f_t5DwNLcECnNyj
_95qPhrM0gPw:1587316417823&source=lnms&tbm=isch&sa=X&ved=2ahUKEwj5zuu5_vToAhXBV30KHe
oNAbw4ChD8BSgBegQIDBAD&biw=2049&bih=994#imgrc=8he3ajVTNrVHmM
17
http://www.eschooltoday.com/poverty-in-the-world/the-vicious-cycle-of-poverty.html
18
E-schooldays. “The Cycle of Poverty.” poverty for children. Accessed April 19, 2020.
http://www.eschooltoday.com/poverty-in-the-world/the-vicious-cycle-of-poverty.html.
19
https://pib.gov.in/newsite/PrintRelease.aspx?relid=191213
 Page |9

to economic backwardness.20 The development of natural resources depends upon the character
of human resources. But due to lack of skill and low level of knowledge, natural resources will
remain unutilized, under-utilized and mis utilised. In the words of Meier and Baldwin,
“Underdeveloped resources are, therefore, both a consequence and cause of the backward
people.21 The more economically backward are the people, the less developed will be natural
resources, lesser the development of natural resources more the people are economically
backward.” The vicious circle caused by Market Imperfections is shown as under.22

23

The vicious circle of poverty is a result of the various vicious circles which were on the sides
of supply of and demand for capital. As a result, capital formation remains low productivity
and low real incomes. Thus, the country is caught in vicious circles of poverty which are
mutually aggravating, and it is very difficult to break them.24

According to the principle of vicious circle in UDCs’ level of income remains low which leads
to low level of saving and investment. Low investment leads to low productivity which again
leads to low income. According to Prof. Nurkse. “It implies circular constellation of forces
tending to act and react one another in such a way as to keep a poor country in a state of poverty.
He cited an example of a poor man. A poor man does not get enough food which makes him

20
“Poverty and Its Vicious Circles.” Nature News. Nature Publishing Group. Accessed April 19, 2020.
https://www.nature.com/articles/099083a0.
21
https://pib.gov.in/newsite/PrintRelease.aspx?relid=191213
22
(Amicus..., D. DIDACE. “VICIOUS CIRCLE OF POVERTY.” Academia.edu. Accessed April 19, 2020.
https://www.academia.edu/37249571/VICIOUS_CIRCLE_OF_POVERTY.
23
https://www.google.co.in/search?q=vicious+circle+of+poverty+in+india&sxsrf=ALeKk01f_t5DwNLcECnNyj
_95qPhrM0gPw:1587316417823&source=lnms&tbm=isch&sa=X&ved=2ahUKEwj5zuu5_vToAhXBV30KHe
oNAbw4ChD8BSgBegQIDBAD&biw=2049&bih=994#imgrc=8he3ajVTNrVHmM
24
https://shodhganga.inflibnet.ac.in/bitstream/10603/203860/11/09_chapter1.pdf
 P a g e | 10

weak. As a result of weakness his efficiency reduces as a consequence, he gets low income and
thus becomes poor.25 Let us explain these two aspects in detail which are as follows: -

A. Solution to Supply Side vicious circle:

1. Increase in Saving: In order to get rid of supply side vicious: circle, in these countries;
efforts should be made to increase savings so that investment in productive channels may be
encouraged. To increase saving, expenditure on marriages, social ceremonies, etc. should be
curtailed. In UDCs, the possibilities of voluntary savings are very less. Thus, in this regard,
Govt. interference is necessarily required. The Govt. can increase saving by altering its fiscal
policy. The Govt. can impose heavy taxes on luxurious goods. Moreover, it can increase the
role of direct taxes. Thus, the Govt. can curtail consumption by doing alterations in tax
system.26

2. Increase in Investment: To break the vicious circle of poverty apart from increasing savings
investment of saving in productive channels is also of immense use. The policies of short run
and long run investment should be co-ordinated. By short period investment, people can get
the necessary goods at fair rates, which will have favourable impact on their skill. Moreover,
along with short period investment, investment in the establishment of multipurpose projects,
iron, chemical fertilizers should be properly encouraged. In UDCs, proper monetary and
banking policies should be adopted which may provide facilities and encouragement to small
savings.27

B. Solution to Demand Side Vicious Circle

In UDCs to resolve the demand side vicious circle, extent of the market should be widened so
that people may get inducement to invest. In this regard, Prof. Nurkse advocated the doctrine
of balanced growth. According to the principle of balanced growth, investment should be done
in every sphere of an economy so that demand of one sector can be fulfilled by another sector.
Thus, an increase in demand will lead to wider extent of the market and so the inducement to

25
NewIndianXpress. “Education Empowers Individuals and Can Break the Vicious Cycle of Poverty: V-P M
Venkaiah Naidu.” The New Indian Express. The New Indian Express, January 28, 2018.
https://www.newindianexpress.com/thesundaystandard/2018/jan/28/education-empowers-individuals-and-can-
break-the-vicious-cycle-of-poverty-v-p--m-venkaiah-naidu-1764286.html.
26
https://books.google.co.in/books?id=UZfJDwAAQBAJ&pg=PA137&lpg=PA137&dq=vicious+cycle+of+pov
erty+upsc&source=bl&ots=tKp0XKzPGp&sig=ACfU3U2SMXcsjP8mQYDchrwQ4nwadrrkbw&hl=en&sa=X
&ved=2ahUKEwiywe2EgvXoAhVRg-YKHZ6oCyk4HhDoATAHegQICBAB
27
http://www.ncert.nic.in/ncerts/l/keec104.pdf
 P a g e | 11

invest. On the other hand, economists like Hirschman, Singer, Fleming do not consider the
policy of balanced growth practically fair. According to them, the policy of unbalanced growth
would be more useful.28 In UDCs, there is every possibility of increase in demand and there is
the need of increase in monetary income. Majority of UDCs have adopted the policy of planned
development. Accordingly, due to more investment in public sector, supply of money
increases. Due to increase in monitory income, size of the market gets widen. These countries
attempt to widen the size of foreign market by increasing their exports.29

C. Other Solution to vicious Circle of Poverty

In underdeveloped countries, the main obstacle in economic growth is the backwardness of

human power. Many suggestion can be made to increase the skill of human power. For instance,
in these countries, education, technical knowledge and administrative training should be
enlarged. In these countries’ health facilities should be enhanced which may increase the
efficiency of the workers. Transportation and communication should be developed.30

HOW TO BREAK VICIOUS CIRCLE OF POVERTY

If the underdeveloped countries adopt the following policies, they can remove the obstacles
and can break the vicious circle of poverty.31

1. Proper Use of Natural Resources: -

The developing countries can achieve rapid economic growth by making the efficient use of
natural resources. By proper use of resources, we can increase the production and per capita
income of the country.

2. Self-Reliance Policy: -The less developing countries should reduce their dependence on
foreign aid. The heavy reliance on foreign aid and its repeated suspension, delay and breach of

28
conomicsdiscussion.net/capital-formation/the-vicious-circle/vicious-circle-of-poverty-and-the-scarcity-of-
capital-with-diagram/11830
29
“Nurkse's Model of Vicious Circle of Poverty (VCP) and Economic Development:” n.d. Nurkse's Model of
Vicious Circle of Poverty (VCP) and Economic Development - Definition and Explanation - Diagram/Figure -
Shortcomings/Flaws of the Model - Economicsconcepts.com. Accessed April 19, 2020.
https://economicsconcepts.com/nurkse's_model_of_vicious_circle_of_poverty_(vcp).htm.
30
“Population and Related Issues for UPSC CSE By Sarbani Chowdhury - Unacademy Plus.” Unacademy.
Accessed April 19, 2020. https://unacademy.com/lesson/vicious-cycle-theory-of-poverty/6AB7EUT7.
31
“Development Strategies to Break the Vicious Cycle of Poverty - Growth in the Developed and Developing
Worlds.” Coursera. Accessed April 19, 2020. https://www.coursera.org/lecture/strategic-business-management-
macroeconomics/development-strategies-to-break-the-vicious-cycle-of-poverty-tLMzQ.
 P a g e | 12

agreements have created multiple problems. The policy of self-reliance should be followed for
financing development projects.32

3. Encouragement of Private Sector: -

The less developed countries should encourage the private sector to increase the rate of
investment in the country. The government has also given incentives to the private sector to
promote the rate of development in the country.

4. Increase in Savings: -

The government of less developed countries should provide incentives to encourage the rate of
savings in the country. New and attractive savings schemes should be introduced.

5. Increase in Exports: -

We should increase our exports to make our balance of payment favourable. We should
increase the exports of manufactured goods instead of primary commodities.

6. Reduction in Imports: -

The developing countries should produce substitutes of imports inside the country to save the
foreign exchange. Import of luxuries should be curtailed.

7. Development of Agriculture: -

To increase the per acre yield government should expand the credit facilities to the farmers.
Due to low yield of wheat it has imported many times to meet the needs of the country.

8. Development of Industrial Sector: -

Agriculture based industries should be established in the less developed countries. All the raw
material should be used in these industries, instead of exporting raw material on lower rates.

9. Reduction in Employment: -The government should increase the job opportunities in the
country. It will improve the saving and purchasing power of the people. New projects should
be started to increase the rate of employment.

32
https://unacademy.com/lesson/vicious-cycle-theory-of-poverty/6AB7EUT7
http://ww1.economicport.com/
Paulson, Tom. 2014. “Visualizing the Vicious-Virtuous Cycles of Population Growth and Poverty Reduction.”
Humanosphere. May 27, 2014. http://www.humanosphere.org/basics/2014/05/visualizing-the-vicious-virtuous-
cycles-of-population-growth-and-poverty-reduction/.
 P a g e | 13

10. Balanced Growth Strategy: -The less developed countries should adopt the balance growth
strategy to remove poverty. Because investment in various sectors at the same time can provide
market and a source of a supply for another.

11. Introduction to Technology:

The developing countries can increase the rate of development by adopting suitable advance
technology in various sectors of the economy. But they should adopt the technology according
to their requirements.

12. Reduction in Population Growth: -

In the less developed countries high birth rate is the main cause of low per capita income. In
India and Pakistan rate of population growth is high. effective measures should be taken to
reduce the population pressure.

13. Administrative Performs: -

The professionally qualified persons should be appointed in the financial institutions and in the
planning sector. Corrupt and inefficient administration should be removed.

14. Monopolies Must be Discouraged: -

The government should discourage the monopolistic associations and should protect the
interest of the consumer, Govt. should keep an eye on the prices also.

15. Denationalization: -

All the poor countries should hand over the sick industries to the private sector. The present
government has also decided to sell the shares of public industries to private sector. This policy
will reduce the deficit of the budget.

16. Improve the Quality of Labour: -

Poor countries should improve the quality of labour by providing the education and technical
skill to the labour. It will increase the efficiency of the people and the rate of production.

17. Political Stability: -It is the basic requirement for the development of any country. All the
poor countries should prevail peace and political stability if they want to achieve development.

18. Stable Economic Policy:

 P a g e | 14

The poor countries should adopt the stable economic policy. There should be no frequent
changes in the taxation and import-export policy. Because it discourages the rate of investment
in the country.

19. Effective Planning: -

The less developed countries can prepare the development plans to accelerate the rate of
development in the country.

CRITICISM

Numerous economists do not consider vicious circle of poverty as an obstacle in the path of
economic development. According to Prof. Hirschaman, the basic problem of economic
development in these countries is the lack of decision-making ability. The real problem is the
lack of capital. According to Prof. Lewis, “If in these countries lack of capital is not realized
during the war period, then ten percent of national income can be easily saved for economic
development.”33 Therefore, according to these economists, vicious circle of poverty has been
over weighted in these countries. Moreover, Prof. Bailer, has also criticized the vicious circle
of poverty on so many grounds. Circle of poverty in UDCs is an easy explanation of nature.
However, its main drawbacks have been summarized below:

1. The doctrine of vicious circle of poverty in UDCs is an easy explanation of nature. There
are so many other reasons of vicious circle in these countries.

2. The experience of Latin American countries have proved that underdeveloped countries can
also develop.

3. The doctrine of vicious circle neglects the so many important reasons like lack of
entrepreneurs, political, social and religious atmosphere.

4. The principle of vicious circle do not explain important determinants of economic

development.

33
“Nurkse's Model of Vicious Circle of Poverty (VCP) and Economic Development:” n.d. Nurkse's Model of
Vicious Circle of Poverty (VCP) and Economic Development - Definition and Explanation - Diagram/Figure -
Shortcomings/Flaws of the Model - Economicsconcepts.com. Accessed April 19, 2020.
https://economicsconcepts.com/nurkse's_model_of_vicious_circle_of_poverty_(vcp).htm.
 P a g e | 15

CONCLUSION

Poverty has been reduced significantly in urban areas but still there is a long way to go in rural
areas as there is a lot of work that needs to be done for basic necessities of life and employment
opportunities. Government has to take major step and make strict labour laws for protecting
the rights of labours. In order to fight against poverty, we have to reduce income inequalities,
regional disparities etc., building up of infrastructure in rural areas also plays an important role
in reducing poverty up to a certain extent. Proper implementation of various programs initiated
by the government is to be ensured. Poverty is a vicious cycle from which India is trying to
come out and up to a certain extent, it is successful in doing so but still there is a long way to
go.

BIBLIOGRAPHY

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Growth and Poverty Reduction.” Human sphere. May 27, 2014.
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http://www.humanosphere.org/basics/2014/05/visualizing-the-vicious-
virtuous-cycles-of-population-growth-and-poverty-reduction/.