Sem 6[430] converted99

Poverty and inequality in India
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DEPARTMENT OF ECONOMICS
FACULTY OF ARTS
THE MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA
VADODARA 390002
Project report submitted to
Department of Economics
In partial fulfillment of
Bachelor of Arts
April 2018
NAME NIKUNJKUMAR DHULA
CLASS & YEAR OF STUDY BA SEM 6,2018
PRN 2016033800024385
EXAM SEAT NO. 600027
GUIDED BY Dr. SARAH AHMED MAM
Marks Total
Report (out of 70) Viva voice (out of 30) Out of 100
Name and signature of the guide
Dr. Sarah Ahmed : _______________

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ACKNOWLEDGEMENT
I would like to express special thanks of gratitude to my project guide
Dr. Sarah Ahmed mam for her able guidance and support, her valuable
suggestions helped me in completing this project.
I would also like to extend my gratitude to our project co-ordinator Dr. Akash
Kumra sir and the Department of Economics, MSU Vadodara for giving me
opportunity to make this project.
Finally I would like to thank my friends and seniors who have helped me during my
project work.
-Nikunjkumar Dhula
TYBA (SEM-VI)

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INDEX
Sr. No. Topic
1. Introduction 4
2. Income inequality in India 5
3. Poverty line in India 6
4. Causes of poverty in India 7
5. Multidimensional Poverty Index 10
6. Rural poverty and Urban Poverty 12
7. Rural poverty 12
8. Urban poverty 15
9. Effects of poverty in rural and urban areas 17
10. Wealth concentration in India 19
11. Poverty statistics in India 20
12. Poverty elevation programmes in India 21
13. Conclusion 23
14. References 24

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INTRODUCTION :
What ispoverty?
According to 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.’
This poverty definition encompasses living conditions, an inability to meet basic needs
because food, clean drinking water, proper sanitation, education, health care and other social
services are inaccessible. This poverty threshold starts with fear for the future and broadens
to include dependence, oppression and even exploitation.
Poor families and children living in the world’s low- and middle-income countries are
highly vulnerable, powerless and afraid. They are dependent on others. Their rights and
freedoms are restricted. They live without support, on the sideline, watching economic
growth and prosperity pass them by. Their dignity is assaulted daily, and their lives are
abundant...in scarcity. Almost half the world lives with a household income below $2.50
a day. This level of poverty is the equal of slavery. People need an income level which
allows them to purchase what they cannot make or grow.There has been marked
progress on reducing poverty over the past decades. According to the most recent
estimates, in 2015, 10 percent of the world’s population lived on less than $1.90 a day,
down from nearly 36 percent in 1990. Progress has been uneven, and the number of
people in extreme poverty remains unacceptably high.
Poverty and inequality in India :
Poverty is one of the major problems in India. It is the root cause of many socio- economic
problems including population explosion, unemployment, and child labour and rising
graph of crimes. Poverty alleviation should be the main target of the nation so as to make
it a prosperous and developed country. Thus, poverty elimination is a matter of
fundamental importance.
The pathos of Indian story is that 220-230 million of Indian population, which constitutes
22 per cent of the total population, is poor, as per the findings of the National Sample
Survey Organization. This makes India home to the world’s largest proportion of the poor,
even if the percentage of the people living below poverty line reduced from 36 per cent in
1993-194 to 22 per cent in 2004-05. The problem of poverty is acute in villages. More
than 75 per cent people live in villages. Even prevalence of poverty is not uniform all
across India. The poverty level is below 10 per cent in states like Delhi, Goa, Punjab, etc.
while it is nearly 50 per cent in socio-economically backward states like Bihar and Orissa.
The percentage of poverty fluctuates between 30 to 40 in north-eastern states of Assam,
Meghalaya, and in Tamil Nadu and Uttar Pradesh

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There are other dismal facts about poverty in this 4th
largest economy of the world on
GDP at Purchasing Power Parity: it ranks 126th
out of 177 countries listed in the World
Human Development Index and the rate of child malnutrition double than that of sub-
Saharan Africa. The most recent World Bank estimates for India are based on household
surveys carried out in 1999-2000. It was found that almost 80 per cent of India’s
population was surviving on less than $2.15 a day (in PPP terms), i.e. is about 800 million
$1.40 a day or less and nearly 35 per cent were found to be living on $1.20 a day or
less. With such factual and visible evidence enforcing existing bias, the defining element
of our economy would remain identified with poor millions.
Illiteracy constitutes a major cause of poverty. It is really very distressing that after more
than 60 years of independence, about one-fourth of our population do not know how to
read and write. Illiteracy is one of the constraints which deprive one from opportunities to
seek other forms of livelihood. It in fact forces people to stick to ancestral jobs and
prevents them from having job flexibility. Besides, caste system also puts constraints in
the access to lucrative jobs to a vast majority of the people. Though constitutionally such
institutions have been dismantled, their presence can still be seen in rural areas.
Income inequality in India:
Economic performance of a nation is often understood in terms of the growth rate of gross
domestic product. Associated with this growth rate is the figure for per capita income. Not
much is thought about the following question: where does the income come from? It comes
from the wealth of productive assets the nation owns. Hence wealth, in some form,
precedes income. Wealth, therefore, is more important than income. A high current income
can be generated from a destruction of capital assets, but it is neither desirable nor
sustainable
India is no stranger to income inequality, but the gap is widening further. Last year’s
survey had showed that India’s richest 1% held 58% of the country’s total wealth, which
was higher than the global figure of about 50%. According to the latest survey, the wealth
of this elite group increased by over Rs 20.9 lakh crore during the period under review-
an amount close to the total expenditure estimated in the Union Budget 2017.
India’s top 1% of the population now holds 73% of the wealth while 67 crore citizens,
comprising the country’s poorest half, saw their wealth rise by just 1%..
The billionaire boom is not a sign of a thriving economy but a symptom of a failing
economic system. Those working hard, growing food for the country, building
infrastructure, working in factories are struggling to fund their child’s education,
buy medicines for family members and manage two meals a day. The growing
divide undermines democracy and promotes corruption and cronyism.
Such a high level of disparity raises several questions, not the least of which is the extent
to which it subverts democracy. While everybody talks about development these days,
a legitimate question from the data is: whose development are we talking about? Is it
development for the top 1%, or for the top 10%, or the poorest 60%?

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Poverty line in India
Poverty line is the level of income to meet the minimum living conditions. Poverty line is
the amount of money needed for a person to meet his basic needs. It is defined as the
money value of the goods and services needed to provide basic welfare to an individual.
Poverty line differs from one country to another, depending upon the idea of poverty
Methodology for constructing the poverty line.
For measuring poverty, a poverty line is set. The poverty line is the level of income
needed to meet the minimum standard of living. People who have an income less than
this is considered as below poverty line.
The concept about minimum consumption standards and consumption levels were
changed based upon recommendations of the various expert task force. These expert
groups use the NSS (National Sample Survey) estimate the consumption pattern of
households from time to time. The NSS’s periodically makes extensive household surveys
on expenditure. Here, from the consumption basket of the people, the expert groups pick
up the most essential commodities. These commodities are placed under a poverty line
basket (PLB).Extending from the first attempt to set a poverty line the Working Group of
1962 to the Rangarajan Task Force (2014), poverty estimation methodology has
undergone an evolution in India. Poverty ratio is measured in terms of per capita
consumption expenditure over a month.
Tendulkar committee suggested poverty line of 27rs per day for rural area and 33 per
day for urban area while the Rangarajan committee (2014)suggested poverty line of
32rs a day and 47rs a day in rural and urban areas respectively
Table : Persons living under poverty according to Rangarajan and Tendulkar
committee

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The table shows poverty estimates as given by Tendulkar committee and Rangarajan
committee, the Rangarajan committee calculated the number of rural poor to be 260.5
million while Tendulkar committee calculated the number of rural poor to be 216.5
million, on the other hand the number of urban poor was 102.5 million and 52.8 million
given by Rangarajan and Tendulkar committee respectively. While the total number of
poor was 363 million (29.5%) according to Rangarajan committee and it was 269 million
(21.9%) according to Tendulkar committee.
Causes of poverty in India:
1.Heavy pressure of population:
Population has been rising in India at a rapid speed. This rise is mainly due to fall in death
rate and more birth rate. A rapid rise in population not always follows equal rise in the
employment and income level of the household as the resources and the availability of
jobs are limited.
India’s population was 84.63 crores in 1991 and became 121. 07 crores in 2011. This
pressure of population proves hindrance in the way of economic development as the
average income or the per capita income decreases with increase in population if the
salaries of the people are not raised in accordance.
2.Lack of Inclusive Economic Growth:
The first important reason for mass poverty prevailing in India is lack of adequate
economic growth in India. In the first three decades of planned development (1951-81)
in India, annual average growth in national income had been 3.6 percent. With 2.1 per
cent per cent per annum growth in population, per capita income grew by only 1.5 per
cent per annum during this period
In the next two decades of development (1981-2000) national income increased on an
average by 5.5 per cent per annum. With about 2 per cent per annum growth in
population, per capita income rose by 3.5 per cent.
Further, trickledown effect of overall economic growth was operating only to a small
extent. This is manifest from the feet that employment opportunities had been increasing
at a very slow pace during this period. In fact, in NSS 1999-2000, rate of unemployment
increased. No wonder that even in 2015-16, 290 million persons or 29.8 per cent of
population lived below the poverty line
3.Sluggish Agricultural Performance and Poverty:
Many economists have pointed out that in the year of good agricultural output, poverty
ratio declines. Good performance in agriculture leads to more employment opportunities
and fall in prices of food grains. More employment opportunities and lower food price
cause poverty ratio to decline.
Indian policy makers have neglected public sector investment in agriculture, particularly

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irrigation for quite a long period since 1980-81. As a result, irrigation facilities whose
availability ensures adoption of new high-yielding technology and leads to higher
productivity, income and employment, are available in not more than 33 per cent of
cultivable land. As a result, many parts of the country remain semi-arid and rain-prone
areas where agricultural productivity, income and employment cannot be sufficient to
ensure significant reduction in poverty.
4.Non-implementation of Land Reforms:
Equitable access to land is an important measure of poverty reduction. Access to
adequate land, a productive asset, is necessary for fuller employment of members of an
agricultural household. Most of the rural poor are agricultural labourers (who are generally
landless) and self-employed small farmers owning less than 2 acres of land.
They are unable to find employment throughout the year. As a result, they remain
unemployed and under-employed for a large number of days in a year. No wonder that
these landless agricultural labourers and self- employed small farmers remain poor.Land-
reforms were intended to provide them equitable access to land.
5.Unemployment and Under-employment:
The existence of unemployment and underemployment in the Indian economy is another
cause of poverty in India. Unemployment prevails more among casual labour whose
proportion in labour force has been increasing and in their case unemployment and
poverty go together.
The unemployment has been caused by rapid growth of population and labour force on
the one hand and relatively low rate of capital formation and economic growth on the
other. Besides, the generation of employment opportunities by the organized sector has
been quite insignificant.
6.Inflation and Food Prices:
Rate of inflation and level of food prices is an important factor that causes poverty.
Inflation, especially rise in food prices, raises the cost of minimum consumption
expenditure required to meet the basic needs. Thus, inflation especially rise in food prices
pushes down many households below the poverty line.
That is why Public Distribution System has been designed to provide food-grains and
other essential items such as Kerosene oil, standard cloth, pulses at subsidized prices,
that is, prices which are lower than the free market prices.
7.Non-implementation of Land Reforms:
Equitable access to land is an important measure of poverty reduction. Access to
adequate land, a productive asset, is necessary for fuller employment of members of an
agricultural household. Most of the rural poor are agricultural labourers (who are generally
landless) and self-employed small farmers owning less than 2 acres of land.They are
unable to find employment throughout the year. As a result, they remain unemployed and
under-employed for a large number of days in a year. No wonder that these landless
agricultural labourers and self- employed small farmers remain poor.
Land-reforms were intended to provide them equitable access to land.

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7.Unemployment and Under-employment:
The existence of unemployment and underemployment in the Indian economy is another
cause of poverty in India. Unemployment prevails more among casual labour whose
proportion in labour force has been increasing and in their case unemployment and
poverty go together.
The unemployment has been caused by rapid growth of population and labour force on
the one hand and relatively low rate of capital formation and economic growth on the
other. Besides, the generation of employment opportunities by the organized sector has
been quite insignificant.
8.Inflation and Food Prices:
Rate of inflation and level of food prices is an important factor that causes poverty.
Inflation, especially rise in food prices, raises the cost of minimum consumption
expenditure required to meet the basic needs. Thus, inflation especially rise in food
prices pushes down many households below the poverty line.
That is why Public Distribution System has been designed to provide food-grains and
other essential items such as Kerosene oil, standard cloth, pulses at subsidized prices,
that is, prices which are lower than the free market prices, so that the poor can also have
access to food and a control over food prices by the government ensure availability of
food to poor also. Public distribution system (PDS) Is one kind of scheme.
9.Deficiency of efficient Entrepreneurs:
For industrial development, able and efficient entrepreneurs are needed. In India, there
is shortage of efficient entrepreneurs. Less industrial development is a major cause of
poverty.
Lack of efficient entrepreneurs significantly affects the growth rate of a country lack of
new start ups and inefficient utilization of existing plant machinery and resources by
unskilled and inefficient management decreases the opportunity of expansion of
production and innovative techniques of production.
10.Improper use of Natural Resources and lack of infrastructure :
India has large natural resources like iron, coal, manganese, mica etc. It has perennial
flowing rivers that can generate hydroelectricity. Man power is abundant. But these
sources are not put in proper use. The means of transport and communication have not
been properly developed. The road transport is inadequate and railway is quite less.
Due to lack of proper development of road and rail transport, agricultural marketing is
defective. Industries do not get power supply and raw materials in time and finished
goods are not properly marketed.

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MULTI DIMENSIONAL POVERTY INDEX
Poverty can be and is measured in different ways by governments, international
organizations, policy makers and practitioners.
“The Multidimensional poverty Index measures serious deficits in health, education
and living standards, looking at both the number of deprived people and the intensity
of their deprivations”
The global Multidimensional Poverty Index (MPI) is an international measure of acute
poverty covering over 100 developing countries. It complements traditional income-
based poverty measures by capturing the severe deprivations that each person faces
at
Poverty measurement has primarily used income for the identification of the poor.
But while there is much to be done, there are promising signs that such poverty
can be - and is being - tackled. In India, the first country for which progress over
time has been estimated, 271 million people moved out of poverty between
2005/06 and 2015/16. The poverty rate here has nearly halved, falling from
around 55 percent to around 28 percent over the 10 -year period. the same time
with respect to education, health and living standards.

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In the 1950s, economic growth and macroeconomic policies dominated the development
discourse, which meant little attention was paid to the difficulties faced by poor people.
Until the 1970s, the poor were statistically identified solely on the basis of household
income, adjusted to family size, relative to a specified income poverty line..In the mid-
1970s the ‘basic needs’ approach posited that development concerns should be focused
on providing people their basic needs, as opposed to merely increasing their income.
Where the 1.3 billion MPI poor live
Source: Multidimensional poverty index 2017
The 2018 MPI shows that half of the poor lives in five countries namely India, Democratic
Republic of Congo, Nigeria, Ethiopia, and Bangladesh. While area wise sub-Saharan region
was home to 42% of the total MPI poor in the world, followed by South Asia with 41%,East
Asia and Pacific with 8.8% , Arab states 4.9%, Latin America and the Caribbean 3%, and
Europe and Central Asia with 0.3% of the total MPI poor.
Lack of economic and technological development in African and Asian countries resulted in
raising of poverty levels in these countries, there has been a significant improvement in lives
of people living under extreme poverty but complete eradication of poverty is still a long way.
Globally, some 1.3 billion people live in multidimensional poverty, which is almost
a quarter of the population of the 104 countries for which the 2018 MPI is
calculated. Of these 1.3 billion, almost half - 46 percent - are thought to be living
in severe poverty and are deprived in at least half of the dimensions covered in the
MPI.

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Rural poverty and urban poverty
Rural poverty refers to poverty 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 often discussed in conjunction with spatial inequality , which in this context
refers to the inequality between urban and rural areas both rural poverty and spatial
inequality are global phenomena, but like poverty in general, there are higher
rates of rural poverty in developing than in developed countries Eradicating rural poverty
through effective policies and economic growth remains a challenge for the international
community.
In urban centres, people are dependent on the provision of public and private services to
mitigate the environmental effects of the overcrowded conditions in which they live –
accumulations of solid waste, human excrement, stagnant water in Polluted open drains.
They cannot dispose of their Rubbish on open wastelands, or relieve themselves In
forests, and they cannot rely on common property resources as alternative sources of
income, Water and fuel.
Rural poverty in India
India has an overall population of 1.3 million, with 900 million people living in rural areas
of the country. While the poverty rate has been significantly reduced due to governmental
support, factors such as natural disasters, heavy dependence on agriculture and high
birth rates have contributed to the continued poverty in rural India that affects around 300
million people.
Farming in India relies heavily on monsoons that bring rainfall and irrigate the land. This
means that erratic weather, cyclones, water shortages and droughts all have a huge
impact on agriculture and can cause damage to crops.
Environmental factors are not the only causes of poverty in rural India; societal factors
play a large role as well. Many people living in rural areas lack the physical ability to work.
Individuals may also face problems such as drug addiction or alcoholism. Other factors
that increase the poverty rate include a poor educational system, limited access to
medical care, poor or non-existent sex education and a lack of available birth control
methods.
Causes of Rural Poverty
Geographical factor : In certain rural areas geographical factors create conditions
which lead to poverty. One of the most prominent geographical factors in India is
unpredictable monsoons and weather which impact the crop production and yield.
Natural calamities like flood, drought, cyclones etc take their own toll and damage the

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crop, livestock and land. Heavy loss is caused by these results in poverty. For an
example, recent rain has caused an extreme damage in Kerala. This has led to a much
talked about food price rise.
Personal factors : There are many personal factors that lead to poverty. One of these
is sickness. Due to poverty families do not get enough food to eat and thus lack in
immunity. They become prone to many diseases. So whatsoever they earn is utilized in
the treatment of the same. Sickness in turn leads to more poverty.
Laziness and not willing to work is another major reason of poverty in India. People just
do not want to work. Even in urban areas you might have come across beggars who are
in good health but are not willing to work even if given some. They need easy money.
Addiction to drinking, drugs and other social evils add to rural poverty. These are enough
to make the entire family poor.
Biological factors : Rapid growth in population also leads to poverty in rural India. Much
developed medical and healthcare facilities in India have reduced the overall death rate
but yet birth-rate has not been controlled with effectiveness. Big families and limited
resources result in poverty.
Economic factors : Rural India depends upon agriculture for everything. But most of the
farmers still rely on primitive methods of agriculture. With this the annual produce is often
very less. Moreover agriculture sector in India is still underdeveloped to provide enough
jobs.
Faulty supply chain and mismanagement cause the farmers to suffer the most. People at
the top of the supply chain earn the maximum benefit of the farmer’s hard work. But it
should be another way round to uplift the rural India and to eradicate rural poverty.
Major Anti-Poverty programmes
Integrated Rural Development Programme/Swarnajayanti Gram Swarozgar
Yojana was started in 1980 with an objective of all round development of rural poor. Self-
employment was emphasized through IRDP.This Programme has helped millions of rural
poor by providing them with opportunities of employment and skill development.
Sampoorna Gramin Rozgar Yojana (SGRY) was started in 2001 with an objective of
providing employment for the rural poor. This programme was quite successful in its
initial years but later MGNREGA became a important programme for rural employment.
Pradhanmantri Gramodaya Yojana (PMGY) was started in 2000 and its main focus
was village level development especially in five areas including primary health, primary
education, housing, rural roads and drinking water and nutrition.

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National Rural Employment Guarantee Scheme (NREGS) initiated in 2006 for providing
legal guarantee for 100 days of wage employment. Providing employment and creating
asset were the main objective of this scheme.
Antidaya Anna Yojana initiated in 2000 with an objective of providing food securities to poor
families. In this scheme the government through public distribution system provides food at
a cost lower than the market rate. Antidaya card is provided to the beneficiaries and certain
quantity which is decided by the government is sold at a meagre price.
National Housing Bank Voluntary Deposit Scheme started in 1991 to make use of
black money for constructing low cost housing for the poor.
Development of Women and Children in Rural Areas (DWCRA) started in 1982 for
providing appropriate opportunities of self employment to the rural women living below
the poverty line.
Jan Shree Bima Yojana initiated in 2000 for providing insurance security to people
living below poverty line. This scheme has helped poor people in enrolling with
insurance and securing them against various risks.
Shiksha Sahyog Yojana started in 2001 for providing education to children living below
poverty line.
Source: Planning commission website

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Urban poverty in India
In India, the causes of urban poverty can be linked to the lack of infrastructure in rural areas,
forcing inhabitants of these regions to seek out work in India’s mega-cities.
Urban poverty in India is unique, particularly in the way that it follows certain patterns of
growth. Though the proportion of urban poor has reportedly declined over the past
decades, the numbers keep adding up, fuelling the persistent nature of slums.
In 2001, according to the National Report (India Habitat III by the Ministry of Housing
and Urban Poverty Alleviation) about 23.5% of urban households were slum dwellers.
This percentage had decreased to 17% by 2011 even though the total number of
households living in slums had gone up from 10.5 million in 2001 to 13.75 million in
2011.Mega-cities are where the majority of urban poverty growth happens.
causes urban poverty
Lack of opportunities : lack of opportunity and skills training for most of the working
age population. Over the years, a shortage of adequate investment in quality education
and basic services like health, sanitation, waste management and skill training has had
its consequences. It has led to generations of malnourished, uneducated, unaware and
unskilled or semi-skilled people who find it difficult to find decent paying jobs.
As agriculture is barely a lucrative option, their only job option is to seek out work in the
cities’ informal economies. Millions migrate to the cities every day to take up informal jobs
such as domestic help, driving cars for middle-class people, taxi driving, construction site
work, etc. However, this creates overcrowding in the already packed urban infrastructure.
Lack of affordable housing : lack of affordable housing leaves these people address-
less on paper. They settle wherever they can, but as more people join, a whole
community of undocumented settlers emerges. This further complicates the procedure
of accessing basic services like electricity, water and sanitation, etc. as the authorities
and public utilities can only serve those registered on paper – this is how poverty begins.
Overcrowding : Overcrowding is another major factor in informal settlements. There is
often just one bathroom for 50 to 100 people in each illegal building, and lack of
awareness of personal hygiene practices pushes families further into the waiting arms
of diseases and infections.
The low income of these communities means that standard medical help is often a far-
fetched dream, not to mention unaffordable. Therefore, on occasions when it rains, or
the neighborhood is flooded, these settlements become breeding grounds for various
parasites and infections and the cycle repeats itself.
Lack of skills: In many cases the concerned person lacks skills needed for doing a certain
type of work if he has not that skill than surely he will be unemployed and even if he is employed
he will not be able to work efficiently like a skilled worker works. For example a company
needs a car repairer but the person has not the skills of repairing a car, due to lack of skills he
will be unemployed.

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The social base installation and social service
Due to the problems of urban poverty is more seriously, it is affect the social base
installation and social service. According to the research from Practical
Action(2008),there are 2.2billion people around world scarcity access to proper sanitation,
the sewers are created by rubbish and human defecations, and more than 420 million do
not have access to the simplest latrines and lack of solid waste disposal services On the
other hand, they lack of access to community services and low-income communities have
no control over new facilities.
Migration
Migration can intensify the conditions of poverty, people tend to migrate from rural to
urban areas for several reasons, this intensify the pressure on limited urban resources
and heavy population pressure on land, due to limited availability of jobs the people are
often exploited by the employer and many of them lives in slums as they cannot afford
housing in urban areas. Slum areas are often centres of unhygienic environment with lack
of basic facilities like water, roads, sewage etc. Due to lack of education among youth
sometimes they choose illegal means to earn money like theft, Murder and other criminal
activities.
Source : Planning commission website

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Effects of Poverty
The resounding effect of poverty echoes through various layers of an India citizen’s life.
If we try to have a systematic look at them, we should proceed under the three following
heads:-
1.Effect on Health – one of the most devastating effects that poverty has is on the overall
health of the nation. The most prominent health issue stemming from poverty is
malnutrition. The problem of malnutrition is widespread in all age-groups of the country
but children are most adversely affected by this. Limited income in larger families leads
to lack of access to sufficient nutritious food for their children. These children over time
suffer from severe health problems like low body weight, mental, physical disabilities and
a general poor state of immunity making them susceptible to diseases. Children from poor
backgrounds are twice as susceptible to suffer from anemia, nutrient deficiencies,
impaired vision, and even cardiac problems. Malnutrition is a gross contributor of infant
mortality in the country and 38 out of every 1,000 babies born in India die before their first
birthday. Malnutrition among adult also leads to poor health in adults that leaches their
capacity for manual labour leading to a decrease in income due to weakness and
diseases. Poverty also causes definite decline in the sanitarypractices among poor who
cannot afford proper bathrooms and disinfectants. As a result susceptibility to waterborne
diseases peak among the poor. Lack of access to as wellas means to procure appropriate
treatment also affects overall mortality of the population which is lower in poor countries
than developed nations like the USA.
2.Effects on Society – poverty exerts some gravely concerning effects over the overall
societal health as well. These may be discussed along the following lines:-
Violence and crime rate – incidence of violence and crime have been found to be
geographically coincident. In a backdrop of unemployment and marginalization, the poor
resort to criminal activities to earn money. Coupled with lack of education and properly
formed moral conscience, a poverty ridden society is more susceptible to violence by its
people against its own people from a sense of deep-seated discontent and rage.
Homelessness – apart from a definite drop in the aesthetic representation of the
country, homelessness affects child health, women safety and overall increase in
criminal tendencies.
There are 1.77 million homeless people in India, or 0.15% of the country’s total
population, according to the 2011 census consisting of single men, women, mothers, the
elderly, and the disabled. Furthermore, there is a high proportion of mentally ill and street
children in the homeless population. There are 18 million street children in India, the
largest number of any country in the world, with 11 million being urban
Stress – lack of money is a major cause of stress among the middle-class and the poor
and leads to decline in productivity of individuals.

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Child labour – one of the hallmarks of a poverty-ridden society is the widespread
practices of exploitation and the worst of it comes in the form of child labour. Large
families fail to meet the monetary needs of the members and children as young as 5
years are made to start earning in order to contribute to the family income. There are 33
million child labourers between the ages of 5 – 18 years in INDIA as per census 2011
data and 10.13 million between the ages of 5- 14 years.
Terrorism – proclivity of youth towards terrorism stems from a combination of extreme
poverty and lack of education making them susceptible to brainwashing. Terrorist
organizations offer poverty-ridden families money in exchange for a member’s
participation in their activities which induces a sense of accomplishment among the
youth.
3.Effect on Economy –poverty is a direct index indicating success of the economy of
the country. The number of people living under the poverty threshold indicateswhether
the economy is powerful enough to generate adequate jobs and amenities for its people.
Schemes providing subsidies for the poor of the country again impose a drain on the
economy.
Poverty decreases the opportunity available to the poor as they have very limited means
to satisfy their wants .The overall level of consumption decreases as people have less
money to spend and due to this the production level also decreases which in turn affects
the producer class of the economy.
In Indian context the level of poverty has significantly affected the productivity of people
as a large number of people lives on subsistence level of income due to which they are
not able to fulfill needs other than necessities and in some cases not even basic needs.
After the LPG policy of 1991 the gap between rich and poor has significantly rises which
gave rise to capitalist structure in the economy in which the workers are exploited and
marginalized. Less representation of women due to poverty and various other reasons
has affected the industrial growth of the economy.
Access to basic
services
latrines electricity Tap water
Poor 21% 61% 06%
Non poor 62% 85% 33%
Access to basic services
Source: World Bank
In India the access to basic services is still a dream for poor, only 21% of poor have
access to latrines while 62% of non poor have access to latrines, 61% of poor have
access to electricity which is 85% for non poor while only 6% of poor have access to
tap water and 33% in case of non poor

19
Income inequality and wealth concentration in India
Income inequality is an extreme concentration of wealth or income in the hands of a
small percentage of a population. It has been described as the gap between the richest
and the rest.
Much of the increase in inequality since 1991 has been a result of policies skewed in
favor of capital and the privileged rising inequality combined with horizontal inequality
across caste, religion, region and gender threatens to hurt the India growth story But it
also threatens the social and political stability.
Wealth concentration has became a major problem throughout the world specially in
capitalist countries and with emphasis on market economy with a little government
intervention this inequality and concentration of wealth is reaching a new level. In
countries like India due to lack of strict laws and restrictions, there has been a big black
money market running underground.
A general misconception around inequality in India is that the level of inequality is low by
international standards. However, such a comparison is largely misplaced as inequality
in India is usually measured by the consumption expenditure data, which is not
comparable to inequality in most countries which is measured by income dimension.
While there is no one-to-one correspondence between income and consumption
inequality, evidence across countries suggests that consumption inequality is generally
lower than income inequality.
India is no stranger to income inequality, but the gap is widening further. Last year's
Oxfam survey had showed that India's richest 1% held 58% of the country's total wealth,
which was higher than the global figure of about 50%. According to the latest survey of
2018, the wealth of this elite group increased by over Rs 20.9 lakh crore during the period
under review which is close to the total expenditure estimated in the Union Budget 2017.
The wealth of the top 9 billionaires is equivalent to the wealth of the bottom 50 percent of
the population. India's top 1% of the population holds 73% of the wealth while 67 crore
citizens, comprising the country's poorest half, saw their wealth rise by just 1%. 13.6 crore
Indians, who make up the poorest 10 per cent of the country, continued to remain in debt
since 2004. There is a bigger gap in urban areas whereas rural inequality remains more
or less the same, Which is a serious matter of concern.
Few capitalist owns wealth more than half of the population of the country and their wealth
is rising at a exceptional rate while more than one fourth of the population owns wealth
equivalent to few percent of the population which includes businessmen businessmen,
politicians, celebrities.
It said the combined revenue and capital expenditure of the Centre and states for
medical, public health, sanitation and water supply is Rs 2,08,166 crore, which is less
than the country' richest man Mukesh Ambani's wealth of Rs 2.8 lakh crore when we
compare that with The world's richest man Jeff Bezos, founder of Amazon, saw his
fortune increase to $ 112 billion (around 7 lakh crore) just 1 per cent of his fortune is
equivalent to the whole health budget for Ethiopia, a country of 115 million people.

20
Poverty Statistics of India
• The latest data available to build conclusions on poverty in India are quite
outdated. Even so, there is no substantial evidence to corroborate that the
figures changed substantially in the recent years. Based on a 2014 World Bank
data, 21.3% of Indians live below $1.90 per day on purchasing power parity. In
simple words, 21.3% Indians live on less than ₹130/- per day.21.9% of Indian
population falls below the national Poverty line.
• More than half, i.e 60.4% of Indians live on just an expense ability of ₹200/- per
day and 86.8% live below ₹350/- perday.
• about 15.2% of Indian children population undernourished. Additionally, nearly
the same number of Indian children are malnourished
• 17.9% of eligible mass in India is unemployed. women share a slightly higher
unemployment rate with 19.7% as compared to 17.4% of males.
• 60% of the poor still reside in the states of Bihar, Jharkhand, Odisha, Madhya
Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand. The reason for these
states to be in the category of the poorest state is because 85% of tribal people
live there. Also, most of these regions are either flood-prone or suffer from
calamities.
• India is among five countries having more than half of the total poor population
of the world, the other four countries are Democratic Republic of Congo, Nigeria,
Ethiopia and Bangladesh.
• Poverty was intense during colonial era India. Numerous famines and epidemics
killed millions of people each.1876-1879 famine in South of British India that
starved and killed over 6 million people.
• In its annual report of 2012, the Reserve Bank of India named the state of Goa
as having the least poverty of 5.09% while the national average stood at 21.92%,
Chhattisgarh has the highest poverty level of 44.61%.while Dadra and Nagar
Haveli had poverty rate of 62.59%.
• According to the recent Global Hunger Index Report 2012 by the International
Food Research Institute, India ranks 97th
in Global Hunger Index. Though there
is no shortage of food production in India, our nation still has the highest
percentage of underweight children under five.
• India at present has a greater share of the poor around the world. Thirty years
ago, India was home to one-fifth of world’s poor but now it is a home to one-third
of poor people. This means we now have more poor in India as compared to thirty
years ago.
• There are 10.13 million child labourers between 5-14 years in India. India has33
million working children between the ages of 5-18 years. In parts of the country,
more than half the child population is engaged in labour (Census 2011)
• Over 270 million people in India moved out of poverty in the decade since 2005-
06 and the poverty rate in the country nearly halved over the 10-year period, a
promising sign that poverty is being tackled globally. The poverty rate in the
country has nearly halved, falling from 55 per cent to 28 per cent in 10years.

21
Poverty elevation programmes in India
1. Integrated Rural Development Programme (IRDP):
The Integrated Rural Development Programme (IRDP), which was introduced in 1978- 79
and universalized from 2nd October, 1980, aimed at providing assistance to the rural poor
in the form of subsidy and bank credit for productive employment opportunities through
successive plan periods. On 1st April, 1999, the IRDP and allied programmes were
merged into a single programme known as Swarnajayanti Gram Swarozgar Yojana
(SGSY). The SGSY emphasizes on organizing the rural poor into self-help groups,
capacity-building, planning of activity clusters, infrastructure support, technology, credit
and marketing linkages
2. Jawahar Rozgar Yojana/Jawahar Gram Samriddhi Yojana:
Under the Wage Employment Programmes, the National Rural Employment Programme
(NREP) and Rural Landless Employment Guarantee Programme (RLEGP) were started
in Sixth and Seventh Plans. The NREP and RLEGP were merged in April 1989 under
Jawahar Rozgar Yojana (JRY). The JRY was meant to generate meaningful employment
opportunities for the unemployed and underemployed in rural areas through the creation
of economic infrastructure and community and social assets. The JRY was revamped
from 1st April, 1999, as Jawahar Gram Samriddhi Yojana (JGSY). It now became a
programme for the creation of rural economic infrastructure with employment generation
as the secondary objective.
3. Rural Housing – Indira Awaas Yojana:
The Indira Awaas Yojana (LAY) programme aims at providing free housing to Below
Poverty Line (BPL) families in rural areas and main targets would be the households of
SC/STs. It was first merged with the Jawahar Rozgar Yojana (JRY) in 1989 and in 1996
it broke away from JRY into a separate housing scheme for the rural poor.
4. Food for Work Programme:
The Food for Work Programme was started in 2000-01 as a component of EAS It was
first launched in eight drought-affected states of Chhattisgarh, Gujarat, Himachal
Pradesh, Madhya Pradesh, Orissa, Rajasthan, Maharashtra and Uttaranchal. It aims at
enhancing food security through wage employment. Food grains are supplied to states
free of cost, however, the supply of food grains from the Food Corporation of India (FCI)
godowns has been slow.
5. Sampoorna Gramin Rozgar Yojana (SGRY):
The JGSY, EAS and Food for Work Programme were revamped and merged under the
new Sampoorna Gramin Rozgar Yojana (SGRY) Scheme from 1st
September 2001.
The main objective of the scheme continues to be the generation of wage employment,
creation of durable economic infrastructure in rural areas and provision of food and
nutrition security for the poor.

22
6. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005:
It was launched on February 2, 2005. The Act provides 100 days assured employment
every year to every rural household. One-third of the proposed jobs would be reserved
for women. The central government will also establish National Employment Guarantee
Funds. Similarly, state governments will establish State Employment Guarantee Funds
for implementation of the scheme. Under the programme, if an applicant is not provided
employment within 15 days s/he will be entitled to a daily unemployment allowance
7. National Food for Work Programme:
It was launched on November 14, 2004 in 150 most backward districts of the country.
The objective of the programme was to provide additional resources available under
Sampoorna Grameen Rojgar Yojna. This was 100% centrally funded programme. Now
this programme has been subsumed in the MGNREGA from February 2006.
8. National Rural Livelihood Mission: Ajeevika (2011)
It is the skill and placement initiative of Ministry of Rural development. It is a part of National
Rural Livelihood Mission (NRLM)–the mission for poverty reduction is called Ajeevika
(2011). It evolves out the need to diversify the needs of the rural poor and provide them
jobs with regular income on monthly basis. Self Help groups are formed at the village level
to help the needy.
9. Pradhan Mantri Kaushal Vikas Yojna:
The cabinet on March 21, 2015 cleared the scheme to provide skill training to 1.4 million
youth with an overall outlay of Rs. 1120 crore. This plan is implemented with the help of
Ministry of Skill Development and Entrepreneurship through the National Skill
Development Corporation. It will focus on fresh entrant to the labour market, especially
labour market and class X and XII dropouts. The skill development programme has
helped millions of people in learning new skills and generating new employment
opportunities for them.
10. National Heritage City Development and Augmentation Yojana(HRIDAY):
The Scheme shall support development of core heritage infrastructure projectsincluding
revitalization of linked urban infrastructure for heritage assets such as monuments,
Ghats, temples etc. along with reviving certain intangible assets. These initiatives shall
include development of sanitation facilities, roads, public transportation & parking, citizen
services, information kiosks etc.
11.Pradhan mantri kisan samman nidhi (PM-KISAN):
Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) Scheme is an initiative by Government of
India in which 120 million small and marginal Indian farmers who have less than 2 hectares
(4.9 acres) of landholding will get upto ₹6,000 (US$83) per year as minimum income support.
This scheme was started recently on 1st
february 2018 and a total of 75000 crore has been
alloted for this scheme in the interim budget of February 2019.
This scheme was first of a kind in India and there is high scope that thus scheme will positively
help the poor farmers in improving their conditions

23
CONCLUSION :
Poverty has become a great issue in our world. Though many organizations have been created
to find solutions for this matter nobody could not save our world completely from poverty. The
most common fact which we can realize when we consider on information about poverty is that
poverty is mostly occurring in developing countries. In developing countries various economic
changes are taking place for example industrialization, urbanization and various other
economic activities which contributes to rise in poverty and inequality in these countries.
Today, continued economic development is constrained by the lack of economic freedoms.
Economic liberalization requires extending property rights to the poor, especially to land
Financial services, notably savings, can be made accessible to the poor through
technology, such as mobile banking. Inefficient institutions, corruption, and political
instability can also discourage investment. Aid and government support in health,
education, and infrastructure helps growth by increasing human and physical capital and
an improvement in all of these can ensure upliftment of poor people.
Poverty cannot be completely eradicated, as it largely caused by human factors. Over
the past years there has been a lot of Poverty Alleviation Programs designed to break
the cycle of poverty in many households and communities in the world. The result is
remarkable, but there is still a lot to be done.
Poverty alleviation involves the strategic use of tools such as education, economic
development, health and income redistribution to improve the livelihoods of the worlds
poorest by governments and internationally approved organizations. They also aim at
removing social and legal barriers to income growth among the poor. It’s a global problem
which every country has to be confront, solutions, however, can only be home grown,
Poverty being one of the main factor behind various evils in the society and it gives rise
to criminal activities like loot, murder often they do this type of activities as they found it
as a easy source of earning money as they don’t have skills and education so that they
can also get employment in various skilled jobs and even if they’re working, most of them
will be in unorganized sector where the working conditions are worst, they get very little
salary for the work they do, In India sewage workers are example of such kind of workers,
they faces a lot of problem in their work and have to clean human etcetera without any
help from machines, and they are dozens of incident where this sewage workers have
died due to leaking of sewage water and due to poisonous gases in the gutter.
In last few years there has been considerable progress in poverty eradication and
specially eradication of extreme poverty. In a country like India it is still prevail in extreme
form but a lot of steps has been taken by the government and with help of non government
organizations (NGOs) and other self help groups millions of people have been uplifted
from poverty and various schemes like MNREGA, HRIDAY, PM-KISAN the conditions of
poor has been improved allot. The time has come to take it out from the roots

24
References
Wikipedia
Poverty in India by K. R Gupta
What explains poverty in India by Chandra Shekhar Gupta boggarapu
Understanding poverty in India by Asian development bank
The New Global MPI 2018( An UNDP Report) by Sabina Alkire and Selim Jahan
Poverty and Shared Prosperity 2018 (A World Bank report)
Statistics from The Hindu, World bank and Planning commissions website

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