Chapter 4. Poverty

• A poor person lives a wretched life as he is unable to enjoy barest necessaries of life, which makes him morally degraded. He cannot conduct himself as a human being. treatment, that he gets from society, demoralises him.
• poor people possess few assets and reside in kutcha hutments with walls made of baked mud and roofs made of grass, thatch, bamboo & wood.
• Poverty in India has been studied from two points : urban and rural
• In Rural Areas, poor people include landless agricultural labourers, cultivators with very small landholding, landless labourers engaged in a variety of non-agricultural jobs or tenant cultivators with small land holdings.
• Starvation and Hunger are key features of poorest households.
• poor lack basic literacy and skills and hence have very limited economic opportunities. Poor people face unstable employment.
• Malnutrition is alarmingly high among poor. Ill health, disability or serious illness makes them physically weak.
• poor are highly vulnerable. They are not able to negotiate their legal wages from employers and are exploited.
• Most poor households have no access to electricity.
• Their primary cooking fuel is firewood and cow dung cake. Many poor people do not even have access to safe drinking water.
• There is evidence of extreme gender inequality in participation of gainful employment, education, and decision-making within family.
• Economists identify poor based on their occupation and ownership of assets.

Identification of Poor
• Poverty Line is a cut-off point on line of distribution, which generally divides population of country as poor and non-poor.
• There are many kinds of poor; absolutely poor, very poor & poor. Similarly, there are various kinds of non-poor; middle class, upper-middle class, rich, very rich & absolutely rich.
• There are many ways to categorise poverty. In one such way, people who are always poor and those who are generally poor but who may sometimes have a little more money [for example casual workers] are grouped together as chronic poor.
• Another group is churning poor who regularly move in and out of poverty [example: small farmers and seasonal workers] and occasionally poor who are rich most of time but may sometimes have a patch of bad luck. They are known as transient poor. And then, some are never poor and they are nonpoor.
• There are many ways of measuring poverty.
• One way is to determine it by monetary value [per capita expenditure] of minimum calorie intake which was estimated at 2,400 calories for a rural person and 2,100 calories for a person in an urban area.
• Higher calories intake has been fixed for rural areas because rural worker has to do greater physical work as compared to urban worker.
• Economists state that a major problem with this mechanism is that it groups all poor together and does not differentiate between very poor and other poor.
• There are many factors, other than income and assets, which are associated with poverty; for instance, access to basic education, health care, drinking water, and sanitation. They need to be considered to develop Poverty Line.
• existing mechanism for determining Poverty Line does not take into consideration social factors that trigger and perpetuate poverty such as illiteracy, ill health, lack of access to resources, discrimination, or lack of civil and political freedoms.
• Due to various limitations in official estimation of poverty, scholars have attempted to find alternative methods. For instance, Amartya Sen, a noted Nobel Laureate, has developed an index called Sen Index. There are other tools such as Poverty Gap Index and Squared Poverty Gap.

Poor in India
Head Count Ratio is a way to figure out how many poor people there are based on how many people live below the poverty line.
• NITI Aayog now makes official data on poverty available to the public. This is an estimate based on what the National Sample Survey Organisation, which is now called the National Statistical Office, has learned about how much people spend on consumption.

Causes of Poverty
• Poverty can be caused as a result of: [i] social, economic, & political inequality [ii] social exclusion [iii] unemployment [iv] indebtedness [v] unequal distribution of wealth.
• Aggregate poverty is just sum of individual poverty.
• Poverty is explained by general, economy-wide problems, such as [i] low capital formation [ii] lack of infrastructure [iii] lack of demand [iv] pressure of population, and [v] lack of social/welfare nets.
• Even today agriculture is principal means of livelihood and land is primary asset of rural people; ownership of land is an important determinant of material well-being and those who own some land have a better chance to improve their living conditions.
• Since independence, government has attempted to redistribute land and has taken land from those who have large amounts to distribute it to those who do not have any land.
• A large section of rural poor in India are small farmers. land that they have is, in general, less fertile and dependent on rains. Their survival depends on subsistence crops and sometimes on livestock.
• With rapid growth of population and without alternative sources of employment, per-head availability of land for cultivation has steadily declined leading to fragmentation of land holdings.
• income from these small land holdings is not sufficient to meet family’s basic requirements.
• Most members of Scheduled Castes and Scheduled Tribes are not able to participate in emerging employment opportunities in different sectors of urban and rural economy as they do not have necessary knowledge and skills to do so.
• A large section of urban poor in India are largely overflow of rural poor who migrate to urban areas in search of employment and a livelihood.
• industrialisation has not been able to absorb all these people. urban poor are either unemployed or intermittently employed as casual labourers.
• Poverty is, therefore, closely related to nature of employment.
• Unemployment or underemployment, as well as the temporary and sporadic nature of work in both rural and urban areas, which forces people into debt and keeps them poor. One of the most important things that leads to poverty is being in debt.
• The price of food grains and other essential goods is going up quickly, faster than the price of luxury goods. This makes it even harder for people with less money to get what they need. India is still poor because income and assets are not shared in the same way.
• Poverty is a multifaceted problem for India that needs to be dealt with as quickly as possible.

Policies and Programmes Towards Poverty Alleviation
• Indian Constitution and five year plans have always stated social justice as primary objective of development strategies of government.
• government’s approach to poverty reduction was of three dimensions.
• first one is growth-oriented approach. This is based on expectation that effects of economic growth — rapid increase in gross domestic product and per capita income — would spread to all sections of society and will trickle down to poor sections also. It was major focus of planning in 1950s and early 1960s. It was felt that rapid industrial development and transformation of agriculture through green revolution in selected regions would benefit underdeveloped regions and more backward sections of community.
• This second approach has been initiated from Third Five Year Plan [1961-66] and progressively enlarged since then.
• Expanding self-employment programmes and wage employment programmes are being considered as major ways of addressing poverty. Examples of self-employment programmes implemented is Prime Minister’s Rozgar Yojana [PMRY] and Swarna Jayanti Shahari Rozgar Yojana [SJSRY].
• government has a variety of programmes to generate wage employment for poor unskilled people living in rural areas.
• In August 2005, Parliament passed a new Act to provide guaranteed wage employment to every rural household whose adult volunteer is to do unskilled manual work for a minimum of 100 days in a year. It is called Mahatma Gandhi National Rural Employment Guarantee Act [MNREGA].
• Under this Act, all those among poor who are ready to work at minimum wage can report for work in areas where this programme is implemented. Nearly five crore households get employment opportunities under this law.
• third approach to addressing poverty is to provide minimum basic amenities to people.
• India was among pioneers in world to envisage that through public expenditure on social consumption needs — provision of food grains at subsidised rates, education, health, water supply and sanitation—people’s living standards could be improved.
• Programmes under this approach are expected to supplement consumption of poor, create employment opportunities and bring about improvements in health and education.
• Three major programmes that aim at improving food and nutritional status of poor are Public Distribution System, Poshan Abhiyan and Midday Meal Scheme. Pradhan Mantri Gram Sadak Yojana and Valmiki Ambedkar Awas Yojana attempt in developing infrastructure and housing conditions.
• government has a variety of other social security programmes to help a few specific groups.
• National Social Assistance Programme is one such programme initiated by central government. Under this programme, elderly people who do not have anyone to take care of them are given a pension to sustain themselves. Poor women who are destitute and widows are covered under this scheme.
• Since 2014, a scheme known as Pradhan Mantri JanDhan Yojana is available in which people in India are encouraged to open bank accounts. Besides promoting saving habits, this scheme intends to transfer all benefits of government schemes and subsidies to account holders directly. Each bank account holder is entitled to Rs. 1- 2 lakh accidental insurance cover.

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