Chapter 3 Poverty As A Challenge

Poverty is one of the most formidable and complex challenges faced by independent India. It is a multi-dimensional problem observed in various forms in daily life – from landless labourers in villages to people living in overcrowded urban slums, daily wage workers, child labourers, and beggars. Poverty is widespread, affecting approximately one-fifth of India's population, meaning around 270 million people lived in poverty in 2011-12. India holds the largest concentration of the poor globally, highlighting the severity of this challenge.

Two typical cases, one urban (Ram Saran) and one rural (Lakha Singh), illustrate the various dimensions of poverty. Ram Saran, a daily-wage labourer in an urban area, struggles with irregular and low income, insufficient to feed his family of six. They live in a temporary shack, children don't go to school, food is meagre, clothes are scarce, and healthcare is inaccessible. His income also supports elderly parents in the village. Lakha Singh, from a rural village, is a landless labourer with erratic work and income, often paid in kind. His family of eight cannot always manage two meals a day. They live in a basic hut, lack access to luxuries like soap and oil, and have limited clothing. His father died of TB due to lack of medication, and his mother suffers from the same disease. He started earning young and never attended school.

Picture 3.1 illustrates the urban poverty faced by Ram Saran and his family, depicting their living situation and conditions that reflect aspects like inadequate shelter, limited resources, and possibly a crowded environment.

Picture 3.2 illustrates the rural poverty experienced by Lakha Singh and his family, showing their dwelling and conditions that represent issues like lack of land, basic shelter, and reliance on manual labour.

These cases demonstrate that poverty is not just about low income; it encompasses hunger, lack of shelter, inability to access education and healthcare, lack of clean water and sanitation, absence of regular employment, and a pervasive sense of **helplessness**. Poor people often face mistreatment and indignity in various public and private spaces. Overcoming this abject poverty and human suffering has been a primary goal for independent India, as emphasised by Mahatma Gandhi.

Poverty As Seen By Social Scientists

Because poverty is a multi-faceted problem, social scientists examine it using various indicators. Traditionally, income and consumption levels were the primary measures. However, poverty is increasingly understood through other **social indicators**:

• Illiteracy levels
• Lack of resistance to illness due to malnutrition
• Limited access to healthcare
• Lack of job opportunities
• Limited access to safe drinking water and sanitation

Analysis of poverty also incorporates the concepts of **social exclusion** and **vulnerability**.

Social Exclusion

**Social exclusion** views poverty not just in terms of low income but as the poor being compelled to live in poor surroundings, excluded from enjoying social equality with better-off people in better environments. It is a process by which individuals or groups are denied access to facilities, benefits, and opportunities available to others. The caste system in India, where certain castes are excluded from equal opportunities, is a prime example. Social exclusion can cause significant harm, potentially exceeding the damage caused by low income alone.

Vulnerability

**Vulnerability to poverty** is a measure of the increased likelihood that certain communities (e.g., backward castes) or individuals (e.g., widows, physically disabled) will either become poor or remain poor in the future. Vulnerability is influenced by the options available to different groups in terms of their assets, education, health, and job opportunities to find alternative livelihoods. It also considers the higher risks these groups face from natural disasters (earthquakes, floods), terrorism, etc., and their capacity to cope with such risks. Vulnerability describes the greater probability of being more severely affected than others during difficult times.

Poverty Line

At the core of poverty measurement is the concept of the **poverty line**. This is a common method based on **income or consumption levels**. A person is identified as poor if their income or consumption falls below a designated "minimum level" required to meet basic needs.

The definition of basic needs and the associated minimum level varies depending on the time period and the country. Therefore, the poverty line is not a universal standard but an imaginary line specific to a country's level of development and accepted social norms.

In India, determining the poverty line involves calculating the monetary cost of a minimum required level of food, clothing, footwear, fuel and light, educational needs, and medical requirements. The current formula for food takes into account the desired **calorie requirement**. These calorie needs vary by age, sex, and the type of physical work performed.

Accepted average calorie requirements in India:

• **Rural areas:** 2400 calories per person per day (higher due to greater physical labour).
• **Urban areas:** 2100 calories per person per day.

The monetary expenditure needed to purchase these calorie requirements (along with other basic necessities) is revised periodically to account for price changes. Based on these calculations for the year **2011–12**, the poverty line was fixed at **$\textsf{₹}$816 per person per month for rural areas** and **$\textsf{₹}$1000 per person per month for urban areas** (higher in urban areas due to higher prices, despite lower calorie needs).

For a family of five in 2011-12, the poverty line was approximately $\textsf{₹}4,080$ per month in rural areas and $\textsf{₹}5,000$ per month in urban areas. The poverty line is estimated periodically (usually every five years) using data from **sample surveys conducted by the National Sample Survey Organisation (NSSO)**.

For international comparisons between developing countries, organisations like the World Bank use a uniform poverty line standard, such as a minimum availability equivalent to **\$1.90 per person per day** (based on 2011 Purchasing Power Parity, ppp).

Different countries use different poverty lines because the minimum necessary level of income or consumption needed to satisfy basic needs varies depending on the country's stage of development, price levels, and accepted social standards of living. What is considered 'basic' in one country might be a luxury in another.

Poverty Estimates

Table 3.1 provides estimates of poverty in India based on the Tendulkar methodology, showing both the poverty ratio (percentage of people below the poverty line) and the absolute number of poor people over several years.

Format 1 (Vertical)

Source: India in figures, 2018, Government of India Central Statistics office.

The table indicates a **substantial decline in the poverty ratio** in India, from about 45% in 1993-94 to 22% in 2011-12. If this trend continues, the percentage of people below the poverty line could drop below 20% in a few years. Importantly, the **absolute number of poor people also declined significantly**, from 407 million in 2004-05 to 270 million in 2011-12, with an average annual decline of 2.2 percentage points during this period.

Poverty reduction dynamics differ between rural and urban India. While both show a decline in poverty ratio, the rural poverty ratio remained higher than the urban ratio across all years shown. The reduction in the number of rural poor (from 326 million to 217 million) and urban poor (from 81 million to 53 million) from 2004-05 to 2011-12 indicates progress in both areas.

Vulnerable Groups

Poverty does not affect all social groups and economic categories equally in India; some groups are more vulnerable than others.

The social groups most vulnerable to poverty are households belonging to **Scheduled Castes (SC)** and **Scheduled Tribes (ST)**. Among economic categories, the most vulnerable are **rural agricultural labour households** and **urban casual labour households**.

Graph 3.1 visually represents the percentage of people below the poverty line within these vulnerable groups compared to the national average. Although the national average poverty ratio was 22% in 2011-12, vulnerability was much higher in these groups:

• 43% of people in Scheduled Tribes were poor.
• 34% of casual workers in urban areas were below the poverty line.
• About 34% of casual agricultural labourers in rural areas were poor.
• 29% of people in Scheduled Castes were poor.

Graph 3.1 is a bar graph comparing the poverty percentages in 2011-12 for the most vulnerable groups (Scheduled Tribes, Urban Casual Labour, Rural Casual Labour, Scheduled Castes) against the average for all groups in India. It visually highlights that these specific groups experienced significantly higher rates of poverty compared to the national average, confirming their vulnerability.

Individuals facing a "double disadvantage" – belonging to a socially disadvantaged group (SC or ST) while also being a landless casual wage labourer household – experience a particularly high degree of vulnerability to poverty. Recent studies suggest that while poverty declined in most vulnerable groups in the 1990s, Scheduled Tribe households might not have seen the same rate of decline.

Beyond social and economic groups, there is also inequality within poor families. While all members suffer, women, elderly people, and female infants are often denied equal access to the limited resources available to the family, experiencing a higher degree of deprivation.

The story of Sivaraman, an agricultural labourer from the Arundhatiyar caste in Tamil Nadu, illustrates multiple dimensions of vulnerability and inequality within a poor family. His irregular work and low wages (lower for his wife for the same work) support a large family of eight. His elderly mother is ill and needs care. He has an unmarried sister and four children, three of whom are girls. None of the girls attend school due to financial constraints and the prioritisation of future marriage expenses over their education. His mother and sister have lost hope. Resources like milk are prioritised for the son. The unmarried sister is seen as a burden due to lack of money for her marriage. This case shows how caste, gender, age, and economic status intersect to create vulnerability and reinforce inequality within a poor household.

Picture 3.3 illustrates the rural poverty and vulnerability faced by Sivaraman and his family, highlighting aspects like a large family size, multiple dependents, low-wage labour, and gender-based inequalities in access to resources like education within the household.

Inter-State Disparities

Poverty levels are not uniform across all states in India; there are significant **inter-state disparities**.

While poverty ratios have generally declined across states since the early 1970s, the rate of reduction varies. According to 2011-12 estimates, the all-India Head Count Ratio (HCR) of poverty was 21.9%. However, some states had poverty levels significantly above this national average, including Madhya Pradesh, Assam, Uttar Pradesh, Bihar, and Odisha.

As shown in Graph 3.2, **Bihar and Odisha** remain the two poorest states with the highest poverty ratios (33.7% and 32.6% respectively in 2011-12). Urban poverty is also notably high in states like Odisha, Madhya Pradesh, Bihar, and Uttar Pradesh.

Graph 3.2 is a bar graph illustrating the poverty ratios in selected Indian states based on the 2011 Census. It visually demonstrates the significant variation in poverty levels across different states, highlighting states with high poverty ratios (like Bihar and Odisha) and those with lower ratios (like Kerala and Goa).

Answer:

In contrast, states like Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat, and West Bengal have achieved a significant decline in poverty. The reasons for success vary:

• **Punjab and Haryana:** Traditionally reduced poverty through high agricultural growth rates, benefiting from the Green Revolution.
• **Kerala:** Focused on **human resource development**, investing in education and health, leading to better social indicators and poverty reduction.
• **West Bengal:** Implemented **land reform measures**, redistributing land and empowering the rural poor.
• **Andhra Pradesh and Tamil Nadu:** Public distribution systems providing food grains at subsidised prices are believed to have contributed to poverty reduction.

Global Poverty Scenario

Globally, there has been a substantial reduction in extreme economic poverty, defined by the World Bank as living on less than \$2.15 per person per day (in 2011 ppp). The proportion of people living below this line fell from 16.27% in 2010 to 9.05% in 2019.

However, this global decline masks significant regional differences:

• **China and Southeast Asian countries:** Experienced rapid poverty reduction due to strong economic growth and major investments in human resource development. China's extreme poverty fell dramatically from 2.1% in 2014 to 0.1% in 2020.
• **South Asia (India, Pakistan, Sri Lanka, etc.):** Also saw a rapid decline in extreme poverty, from 12.8% in 2017 to 10.9% in 2021, with the number of poor falling significantly.
• **Sub-Saharan Africa:** While poverty declined from 36.6% in 2017 to 35.4% in 2019, the pace of reduction was slower compared to Asia. Forecasts suggest that by 2030, nearly 9 out of 10 of the world's extreme poor will live in this region.
• **Latin America and Caribbean:** Experienced a slight increase in the poverty ratio from 4.4% in 2017 to 4.6% in 2021.
• **Former socialist countries (like Russia):** Poverty reappeared (at 3% in 2000) after officially being non-existent earlier.

Graph 3.3 is a line graph illustrating the percentage of people living below \$1.90 a day globally from 2005 to 2019, broken down by region. It shows the overall decline in extreme poverty but highlights how this trend varies, with rapid decreases in East Asia and Pacific and South Asia, and slower or fluctuating trends in Sub-Saharan Africa and Latin America/Caribbean.

Graph 3.4 is a bar graph showing the absolute number of poor people living below \$1.90 a day in millions, categorised by region. It indicates that while the numbers have decreased globally, South Asia and Sub-Saharan Africa continue to have the largest concentrations of the world's extreme poor.

Answer:

The new sustainable development goals (SDGs) proposed by the United Nations aim to eradicate poverty in all its forms by 2030.

Causes Of Poverty

Widespread poverty in India is attributed to a combination of historical, socio-cultural, and economic factors.

Key causes of poverty in India:

• **Historical Factors:** The low level of economic development under British colonial rule significantly contributed to poverty. Colonial policies intentionally harmed traditional Indian handicrafts and discouraged industrial development, including the textile industry.
• **Low Economic Growth Rate:** India's economic growth rate remained low until the 1980s. This resulted in limited job opportunities and slow growth in incomes, perpetuating poverty.
• **High Population Growth Rate:** A high growth rate of population, combined with a low economic growth rate, meant that the per capita income growth was very low. This cycle hindered poverty reduction.
• **Lack of Job Absorption:** While irrigation and the Green Revolution created jobs in agriculture in some areas, and industries (public and private) also provided some jobs, these were insufficient to absorb all job seekers. Many unable to find formal employment in cities resorted to low-income casual work (rickshaw pullers, vendors, construction workers, domestic servants). This led to the urbanisation of poverty.
• **Huge Income Inequalities:** Unequal distribution of land and other resources is a major cause of poverty. Despite policies like land reforms aimed at asset redistribution, implementation has been inadequate in most states. Lack of access to land is a significant factor in rural poverty.
• **Socio-cultural Factors:** Social obligations and religious ceremonies often require significant expenditure, even for the very poor, leading to debt.
• **Economic Factors (Indebtedness):** Small farmers and the poor often need to borrow for agricultural inputs or basic needs due to lack of savings. Inability to repay leads to indebtedness, which becomes both a cause and effect of poverty.

Anti-Poverty Measures

Removal of poverty has been a central objective of India's development strategy since independence. The current anti-poverty strategy of the government operates on two main pillars:

1. **Promotion of Economic Growth:** The government focuses on accelerating the overall economic growth rate, believing that higher growth widens opportunities and generates resources for investment in human development and poverty reduction. India's economic growth has been rapid since the 1980s, contributing significantly to poverty reduction, demonstrating a strong link between economic growth and poverty alleviation. Economic growth can also encourage investment in education. However, economic growth alone may not directly benefit the poorest segments, and growth in sectors like agriculture (where many poor depend) has sometimes lagged.

2. **Targeted Anti-Poverty Programmes:** Recognising that economic growth might not automatically address the needs of all poor, the government implements specific programmes aimed directly at poverty alleviation.

Examples of notable anti-poverty programmes:

• **Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005:** Guarantees 100 days of wage employment per rural household per year to enhance livelihood security. Also focuses on sustainable development through activities addressing drought, deforestation, and soil erosion. Reserves one-third of proposed jobs for women. Has generated crores of person-days of employment, with significant participation from SC, ST, and women.
• **Prime Minister Rozgar Yojana (PMRY), 1993:** Aims to create self-employment opportunities for educated unemployed youth in rural areas and small towns by assisting them in setting up small businesses and industries.
• **Rural Employment Generation Programme (REGP), 1995:** Creates self-employment opportunities in rural areas and small towns, with targets for job creation.
• **Swarnajayanti Gram Swarozgar Yojana (SGSY), 1999:** Aims to bring poor families above the poverty line by organising them into self-help groups and providing a mix of bank credit and government subsidy.
• **Pradhan Mantri Gramodaya Yojana (PMGY), 2000:** Provides additional central assistance to states for improving basic services like primary health, primary education, rural shelter, rural drinking water, and rural electrification.
• **Antyodaya Anna Yojana (AAY):** An important scheme related to food security for the poorest of the poor.

Despite these programmes, the overall results have been mixed. Major reasons for limited effectiveness include **lack of proper implementation**, **right targeting** of beneficiaries, and **overlapping of schemes**. The intended benefits do not always fully reach the deserving poor. Therefore, recent years have seen increased emphasis on better monitoring and evaluation of these programmes to improve their effectiveness.

The Challenges Ahead

Poverty has undoubtedly declined in India, but despite the progress, its reduction remains the country's most pressing challenge. Significant disparities in poverty levels persist between rural and urban areas and among different states.

Certain social and economic groups remain more vulnerable to poverty. Poverty reduction is expected to continue in the coming decade due to factors like higher economic growth, increased focus on universal free elementary education, declining population growth rates, and greater empowerment of women and economically weaker sections.

However, the official definition of poverty, based primarily on income/consumption for minimum subsistence, captures only a limited aspect of what poverty truly means. Many scholars argue for a broader concept of **human poverty**, which includes aspects like lack of education, shelter, healthcare, job security, self-confidence, and freedom from social discrimination (caste, gender). While people might earn enough to feed themselves, they may still lack these other crucial elements of a dignified life.

As countries develop, the definition of poverty evolves. Eradicating poverty is a dynamic process with a moving target. While providing minimum income might be achievable for many in the near future, the larger challenges of ensuring healthcare, education, and job security for all, and achieving gender equality and dignity for the poor, remain significant tasks for the future.

**Human Poverty** is a broader concept of poverty that goes beyond just income or consumption levels. It includes deprivation in essential aspects of human life, such as lack of basic education, poor health, lack of access to clean water and sanitation, absence of job security, powerlessness, and lack of social freedom (e.g., freedom from caste or gender discrimination).

The **poorest of the poor** are typically the most vulnerable groups in society. In India, these include households belonging to Scheduled Tribes, Scheduled Castes, rural agricultural labourers (especially casual labourers), and urban casual labourers. Within these groups, women, elderly people, and female infants in poor families are often considered among the poorest of the poor due to unequal access to resources within the household.

The **main features of the National Rural Employment Guarantee Act 2005** (now MGNREGA) are:

• It guarantees **100 days of wage employment** in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
• It aims to ensure **livelihood security** in rural areas.
• It focuses on creating **durable assets** and addressing causes of drought, deforestation, and soil erosion through the works undertaken.
• It mandates **one-third of the proposed jobs to be reserved for women**.
• It provides for **unemployment allowance** if employment is not provided within 15 days of applying.

**Summary:**

This chapter presents poverty as a multi-dimensional challenge, measured through concepts like the "poverty line" to analyse national and global trends. Recent analysis incorporates new concepts like social exclusion and vulnerability, while the broadening concept of "human poverty" highlights the non-income aspects of deprivation. The chapter discusses the causes of poverty, government anti-poverty strategies (economic growth and targeted programs), and the ongoing challenges towards eradication.