Why India is a poor country in spite of such great economic development rate.

1. POVERTY IN INDIA…
TECH-51354
Submitted by:
Nikhil Bhardwaj
nikhil.03bhardwaj@gmail.com

2. POVERTY: A state of mind! REALLY?
• Poverty is a state of a person in which due to scarcity of
materialistic resources, (s)he is unable to meet out his/her basic
necessities in an efficient manner and/or faces the economic
inequalities in the society.
•Following are the characteristics associated with poverty (mostly
interrelated, but may vary for different cases):
•Hunger and malnutrition.
•No proper housing, unhygienic drinking water supply and
sanitation arrangements.
•Lack of medical care during ailments.
•Illiteracy and/or no access to school.
•Unemployment and uncertain future.
•Lack of status and power in the society, thus no opinion and
freedom to express.

3. POVERTY: The broken wheel of our country’s progress
wagon
• Despite tremendous industrialization and globalization, India is still a
home for world’s one third poor- with 40.74 crore people lying under poverty
line (Planning Commission of India, 20th Sept, 2011).
• According to 2011 Global Hunger Index (GHI), India’s hunger percent has
grown from 22.9% in 1996 to 23.7% in 2011.
•Some facts and figures:
• 49.8% of India’s 24.66 million households defecate in the open.
• 78 million people in India are homeless.
• 334 million people don’t have access to safe water supply.
• 2 million children (74 per 1000 live births) under five die per annum.
• 46% Indian children are malnourished.
• Gross enrolment in secondary school is just 20%
• Number of unemployed persons in India is 10.8 million.

4. POVERTY: A trap from past 200 years….
•With India emerging as a global economy and the country with youngest
population, all eyes set on us, but what holds us back is the fact that a large
proportion of our population is still poor.
•How it all started?
Way back during colonization period, the then prevailing British
policies which discouraged trade, production and agricultural activities,
traditional practices and education, so as to promote Britain manufactured
products. According to 1911 census, only 6% population was literate.
•Efforts to eliminate poverty were made various times during pre and post
independence period. Nearly 13 different committees and commissions were
constituted to make policies for eradicating poverty. The policies were able to
curtail poverty in the country but never achieved set targets.
•Where we stand now?
Social indicators of well being have improved during 66 years of
independence, but still 240 million rural poor and 72 million urban poor exist.

5. POVERTY: Why it continues…
• Why the schemes to eradicate poverty weren’t successful?
• Incapability of government to successfully execute the policies at various
levels (as they are mentioned in the files) and invoke active participation of
masses.
• Inefficiency of Public Distribution Systems (PDS)and the subsidies in
reaching the real poor and needy audience due to corruption and
mismanagement. The scenario is so drastic that even the apex court has to
intervene in between and order free distribution of grains rather than
allowing them to rot in the granaries.
• The ‘criteria for defining REAL POOR’ (i.e. Poverty Line) is not clear.
Instead of empowering the poor and increasing per capita income, the
politics revolve around shifting the poverty line and giving ill comments.
• Although the economy boosted in past two decades after liberalization, but
the labor employment have not increased accordingly because of rigid labor
laws, in addition to which the apprenticeship and vocational training
options are also not very easily available.
•With unequal distribution of wealth and resources, and political powers resting in
limited hands, rich turned richer and poor poorer.

6. POVERTY: A road to no where…
• Unemployment: Recent government policies, international trade barriers and
political lithargicness (in giving faster clearance to establish industries) have
discouraged foreign investments in the country which has slowed down the
industrial growth pace, due to which the gap between number of employable
population and available jobs has widened, which has increased unemployment.
• With population growth rate much faster than rate of supply of resources, and
income remaining constant, the resources become scarce due to which poverty
increases.
• Illiteracy and dropping out schools: The lack of dedication in teachers,
inadequacy of resources and infrastructure in the government schools are the
main reasons why most of the children in rural India either don’t go to school or
drop out in early days. The Mid Day Meals Scheme (which is major driving force
towards schools) is also loosing interests after complains of bad quality food being
served are frequently noticed.
• Improper industrial orientation: Agriculture contributes just 18% to the GDP
despite 60% population directly engaged in it which points out towards massive
underemployment in this sector. Dependency on monsoon and old techniques
prevalent in the fields, increases the chance of crop failure manifold, which in
turn may lead to debt cycle and poverty.

7. POVERTY: Statistical Map…
•There are districts in which more than
41% people live below poverty line. Most
of these districts lie in the states of
Madhya Pradesh, Chattisgarh, Odisha,
Bihar, Jharkhand and West Bengal. They
contribute nearly 61% of India’s total
poor.
•This is because of two reasons:
1.Uneven Growth: The eastern and
central India have maximum natural
resources, still they’ve the highest
number of poor because the
policies don’t favor these regions.
2.High Population: Most of these
states are densely populated which
makes effective execution of
policies difficult.
MAP: District-wise percentage of people living Below Poverty Line (BPL)

8. Economic Growth v/s Poverty
Reduction (2004-05 & 2011-12)
Relative Analysis
There is stark difference
between the growth figures and
the dynamism in poverty
reduction when measured on
relative basis, as the states are
very close to each other, hence
for little change they moved
several steps up or down.
Sikkim & Uttrakhand shew rapid
growth, whereas Punjab,
Karnataka, A.P and J&K moved
down by several steps.
LEGENDS
GSDP- Gross State Domestic Product.
Good performers on top and the poorest
performers at bottom.
Best relative gainers.
Significant losers.
Good gainers.
Losers.

9. Economic Growth v/s Poverty Reduction: Individual Analysis
The individual analysis of states show
that the poverty reduction is directly
proportional to economic growth.
Odisha, Bihar, Rajasthan, MP
performed well , whereas Jharkhand
emerged as worst player in both the
aspects. On the other hand, the
performances of UP and Chattisgarh
were just a few steps away from
satisfactory.
Maharashtra and Andhra Pradesh performed
extremely well in terms of both poverty
reduction and GSDP.
Karnataka GSDP (6.5%) is not too high as the
situations are not same as they were during
2000’s IT boom. With lagging secondary and
tertiary sectors, Punjab’s agrarian prosperity
also isn’t able to sustain high growth.

10. Economic Growth v/s Poverty Reduction: Individual Analysis
Despite such high GSDP, Delhi has
such less poverty reduction
because the poverty rate of Delhi
in 2004-05 was already lower
(13.1%) as compared to other
major achievers.
Even with such high growth rate
and huge poverty reduction, the
development of Uttrakhand is
incomplete in many aspects. With
increase in tourism in the state, its
income increased, but the
progress didn’t involved the
environmental considerations,
hence reversed in just one disaster
strike (the heavy rains of June
2013).

11. Poverty Line 2004-05 and 2009-10:
Comparative Statistics…
• The all-India poverty ratio
declined from 37.2% in
2004-05 to 29.8% in 2009-10
•Poverty ratio in Himachal,
M.P., Maharashtra, Orissa,
Sikkim, T.N., Karanataka and
Uttrakhand declined by
about 10% or more.
• In Assam, Delhi, Manipur,
Mizoram, Meghalaya &
Nagaland, poverty increased
in 2009-10.
Source: The Hindu, March 21st, 2012.

12. Controversies:
• The poverty threshold- The Poverty
Line- is unclear and unacceptable to
masses. The Poverty Line per capita
per day, in 2004-05, for urban and
rural areas was Rs. 32 and Rs. 26
respectively. (as per the Planning
Commission’s affidavit submitted in
Supreme Court on Sept. 20th,2011.)
• Despite severe inflation in recent
times, the poverty line was further
shifted for 2009-10, to Rs. 28.35 and
Rs. 22.42 in urban and rural areas
respectively (Planning Commission,
March 19th,2012). At this meagre
amount, where it is impossible for
poor to consume 2100 calories per
day, arranging basic necessities is still
bigger deal. This triggered mass
criticism and furore.

13. Poverty Eradication Ideas & Solutions
• EDUCATION:
• Age Group 18-35 years:
•Increasing literacy along with special vocational training and apprenticeship
programs for less educated ones on wide scales can be quite helpful.
•Flexible financial helps for higher education for all.
•Schemes to instill Entrepreneurship within youth must be started.
• More focus must be laid on practical aspects of studies and the latest
technologies used in industries must be taught; curriculum must be revised
(need of the hour).
• Age Group 5-14 years:
•Increasing strength of school-enrolled children and sustaining them by
providing better infrastructure, quality learning environment and skilled
teachers.
•Starting apprenticeship schemes so that students can earn along with
studies, and simultaneously support their families instead of completely
dropping out of schools for earning money.
• Regularize teachers for their compulsory and timely presence.
• Mostly children skip schools to take care of their siblings. Therefore, Child
care centers should be open within school premises where students can drop
their siblings during school hours.

14. Poverty Eradication Ideas & Solutions
• HEALTH CARE:
•Encourage direct involvement of masses:
• Government must start medical insurance schemes for poor and peasants
where installments must be very less (like Rs. 5 a month). The money
collected from these schemes must be invested in opening super-specialty
hospitals near the rural areas and slum areas.
• Rejuvenation of closed Public-Drug manufacturing units from the money
collected through sell of shares of these companies.
• Favorable Schemes:
•Schemes to encourage Biomedical Engineering curriculum and correlated
research in the colleges.
•Schemes to ensure presence of doctors in rural hospitals and dispensaries by
assigning duties to group of doctors (instead of specific doctor) on day basis.
•Schemes to ensure prescription of drugs on basis of their chemical names
instead of any specific brand’s name.
•Increasing number of MBBS seats in medical colleges so as to cater future
demands.
•FACT: For given average annual turnover, Healthcare Sector has potential to
provide maximum employment as it involves more direct and active participation.

15. Poverty Eradication Ideas & Solutions
• EMPLOYMENT GENERATION:
• The pace of development of secondary and tertiary sector industries must be
increased manifold, because they have the potential of providing proper
employment to large number of people.
• Small Scale Industries and entrepreneurship must be encouraged. They must
be provided with easier loans at low rate of interest.
• Setup more number of Skill Development-Training Institutes to upgrade
technical expertise and the schemes and courses must be publicized
• Encourage industrial setup in villages so as to promote rural employment,
and in order to stop migration towards cities.
• Open the doors for foreign investments by removing trade barriers.
• Ease up the labor laws. This will increase employment in both organized and
unorganized sectors drastically.
• REMOVE CORRUPTION:
• Encourage e-governance. Make all the data (except for ones which are threat to
country’s security) available online. This must include daily work reports of
government employees, spending and earnings of government, records of all
government contracts, etc. This would encourage transparency and shut all loopholes
in the system.
• Strict check on money launderings.
•Quick grievance redressal mechanisms must be ensured in the system.

16. Some other solutions:
•Decentralization of political power to
grassroots levels. Benefits must reach
the poor, and riches must be properly
redistributed among the population.
• The growth must not be based on
fiscal deficiencies.
• Active Community participation
must be ensured. Compulsory social
service must be introduced in the
country.
•Declare begging a criminal offence.
•Public-Private-Partnership programs
for poverty eradication must be
encouraged.

17. Rays of hope:
• India's poverty rate projected to drop
from 51% in 1990 to about 22% in
2015. (UN Development Report)
• Unemployment can be removed in 30
if 10 million jobs are created per year.
• Urbanization to grow at 4% per year.
Challenges:
•Slum population is expected to grow at
5% per year, hence 12 million more
slums by 2017.
Conclusion:
We have all resources to overcome
poverty, but the only thing we lack is
dedication. We need proper political
commitment, willingness to serve the
people, corruption free system and
active participation of people to make
things work in a better manner.

18. Bibliography
1. http://www.aljazeera.com/indepth/features/2013/11/india-faces-stinking-reality-toilet-day
2. http://indiatoday.intoday.in/story/planning-commission-bpl-earn-rs-25-a-day-india/1/1520
3. http://www.slumdogs.org/homeless-facts/
4. http://en.wikipedia.org/wiki/Education_in_India
5. http://www.thehindu.com/news/national/article3013870.ece
6. http://catalyst.nationalinterest.in/tag/data-visualisation/
7. http://en.wikipedia.org/wiki/Poverty_in_India
8. http://www.theguardian.com/world/2009/oct/04/india-slums-children-death-rate
9. http://www.poverties.org/poverty-in-india.html
10. http://www.thehindu.com/opinion/lead/understanding-the-povertyline/article4989045.ece
11. http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPA/0,,content
MDK:20208959~menuPK:435735~pagePK:148956~piPK:216618~theSitePK:430367~isC
URL:Y~isCURL:Y,00.html
12. http://www.hindustantimes.com/business-news/demystifying-indian-povertyline/article1-1104361.aspx
ACKNOWLEDGEMENTS: Special thanks to Mr. Rishi K. Mutha & Shivam Mutha
Photography for allowing me to use the photographs clicked by them.