Poverty in India: Facts & Figures

Poverty in India is one of the biggest issues. It affects a significant part of the Indian population. Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Poverty means that the income level from employment is so low that basic human needs can’t be met.

According to the World Bank, 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 one’s life.

In India, 21.9% of the population lives below the national poverty line in 2011.

In 2018, almost 8% of the world’s workers and their families lived on less than US$1.90 per person per day (international poverty line).

On the basis of Social, Economic and Political aspects, there are different ways to identify the type of Poverty:

  1. Situational Poverty — Situational Poverty is a temporary type of poverty based on the occurrence of an adverse event like an environmental disaster, job loss and severe health problems. People can help themselves even with small assistance, as poverty comes because of unfortunate events.
  2. Generational Poverty — Generational Poverty is handed over to individuals and families from one generation to the one. This is more complicated as there is no escape because the people are trapped in its cause and unable to access the tools required to get out of it.
  3. Absolute poverty — Absolute poverty refers to a condition where a person does not have the minimum amount of income needed to meet the minimum requirements for one or more basic living needs over an extended period of time. It involves the scarcity of basic food, clean water, health, shelter, education and information. Those who belong to absolute poverty tend to struggle to live and experience a lot of child deaths from preventable diseases like malaria, cholera and water-contamination-related diseases. Absolute Poverty is usually uncommon in developed countries.
  4. Relative Poverty — Relative poverty is the condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live. Relative poverty is considered the easiest way to measure the level of poverty in an individual country. Relative poverty is defined relative to the members of a society and, therefore, differs across countries. People are said to be impoverished if they cannot keep up with the standard of living as determined by society. Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income.
  5. Rural Poverty — It is the area where there are fewer job opportunities, less access to services, less support for disabilities and quality education opportunities. People are tending to live mostly on the farming and other menial work available to the surroundings. Rural poverty is often discussed in conjunction with spatial inequality, which in this context refers to the inequality between urban and rural areas.
  6. Urban Poverty — It occurs in metropolitan areas with populations over 50,000. These are some major challenges faced by the Urban Poor: Limited access to health and education; Inadequate housing and services; Violent and unhealthy environment because of overcrowding; and Little or no social protection mechanism.
Causes of Poverty in India.

1. Population Explosion

Population explosion refers to the rapid and dramatic rise in world population that has occurred over the last few hundred years. Between 1959 and 2000, the world’s population increased from 2.5 billion to 6.1 billion people. This also increases the demand for consumption goods tremendously.

2. Low Agricultural Productivity 

A major reason for poverty in the low productivity is the agriculture sector. The reason for low productivity is manifold. Chiefly, it is because of fragmented and subdivided land holdings, lack of capital, illiteracy about new technologies in farming, the use of traditional methods of cultivation, wastage during storage, etc.

3. Colonial Exploitation 

Exploitation colonialism is the national economic policy of conquering a country to exploit its population as labour and its natural resources as raw material. The practice of exploitation colonialism contrast with settler colonialism, the policy of conquering a country to establish a branch of the metropole

4. Lack of Capital and Entrepreneurship  

The shortage of capital and entrepreneurship results in a low level of investment and job creation in the economy.

5. Lack of Education and Literacy 

The root cause of poverty is lack of education. If you can’t read or do basic math, if you can’t show up for work and apply yourself, you will not have a job. You will be poor. Other actions may dent poverty, but the War on Poverty is 50 years old and the gains are few.

The clear path forward is to realize that the premise that poor children can’t be taught is wrong and to give our city’s children a good academic, social, behavioural and physical education right now. The human potential currently going to waste could be turned into an economic engine—one that would make our region the envy of the nation and demonstrate a better route to prosperity than building stadiums and other physical investments

6. Corruption 

Popular belief suggests that corruption and poverty are closely related in developing countries. Corruption has been a constant obstacle for countries trying to bring out the political, economic and social changes desired for their development. Across different country contexts, corruption has been a cause and consequence of poverty. Corruption on the part of the government, the private sector and citizens affects development initiatives at their very root by skewing decision-making, budgeting and implementation processes.

Poverty Alleviation in India – Programmes and Policies.

The poverty alleviation programmes in India can be categorised based on whether it is targeted either at rural areas or urban areas in the country. 

Most of the programmes are designed to target rural poverty as the prevalence of poverty is high in rural areas. Also targeting poverty is a great challenge in rural areas due to various geographic and infrastructure limitations. 

Poverty Alleviation programmes aim to reduce the rate of poverty in the country by providing proper access to food, monetary help, and basic essentials to the households and families belonging below the poverty line. As per the NITI Aayog (the Think tank of India), the level of poverty in the country can be estimated based on the consumer expenditure surveys that are conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Program Implementation

The programmes can be mainly grouped into:

  1. Wage employment programmes 
  2. Self-employment programmes 
  3. Food security programmes 
  4. Social security programmes 
  5. Urban poverty alleviation programmes
  6. Skill India programmes for employment
Why successful sectors in India are not employment-intensive?
  • Fast-growing manufacturing sectors such as auto, auto parts, two-wheelers, engineering goods, chemicals and petroleum refining use very little low-skilled labour per unit of investment
  • Other fast-growing sectors such as software, pharmaceuticals, telecommunications and financial services use mostly skilled labour
  • Sectors such as clothing, textiles, footwear, food processing and electronic goods, which employ lots of low and semi-skilled workers in which China has excelled have not done well in India.
Why are employment-intensive sectors lagging in India?
  • In employment-intensive sectors such as clothing, footwear, food processing and electronic industry, India lacks a critical mass of large firms.
  • This has impaired India’s ability to capture the vast export markets.
  • In so far as large firms operate in the world markets, they catalyse technological change and high product quality.
  • Their absence has meant low productivity for small and medium firms as well in these sectors.
  • A comparison with China is instructive.
What must be done?
  • Effective Implementation of all the good things that the Hon’ble Prime Minister has announced for the success of Make in India
  1. Infrastructure ( power, roads and ports)
  2. Ease of Doing Business ( including trade facilitation)
  3. Credit access for MSMEs
  4. More flexible labour laws
  5. Reform of the Land Acquisition Law
  6. A Modern Bankruptcy Law
  7. Skill Development
  8. Tax certainty
What are the new approaches for combating poverty?

Targeting the five poorest families in each village:

  1. SECC-based BPL list may be used for the selection
  2. Gram Panchayat to ensure all Government program benefits reach them
  3. A modest cash transfer for a pre-specified time may top these benefits
  4. Aim – to ensure the target families become capable of earning and sustaining the above-poverty level of income within 5-7 years
  5. Similar efforts in urban areas – 100 families in a municipality