POVERTY

 Poverty can be defined as a social phenomenon in which a section of the society is unable to

fulfill its basic needs of life.

 Poverty is a condition in which a person or community lacks the essentials for a minimum
standard of well-being and life. These essentials are
material resources such as food, safe drinking water, clothing and shelter, or they may be social
resources such as access to health care, information and education.

 Poverty is a state of social condition when a large segment of society is deprived of the
minimum level of living.

 Poverty is collective condition of poor people.

 Poverty is lack of regular income to maintain minimum level of living.

 Consumption of less food than is required to sustain a human body is known as condition of
extreme poverty.

 Poverty is condition of lack of income and wealth

 Poverty

 Part I – Concepts of poverty :

1- Minimum Calorie intake required to maintain working efficiency : 2400 calorie in rural area and
2100 calorie in urban areas.

2- Minimum basic needs : food, clothing, shelter, drinking water. (Private consumption expenditure)

3- Poverty in monetary terms : minimum income required for sustenance. (Private consumption
expenditure). National and International poverty line.

4- Human Poverty : Deprivation of means and opportunities to lead a long, healthy and creative life.

 Measurement of Poverty
1- Poverty line : Head count non-discriminatory approach : Total number of poor people living below
poverty line.

2. Poverty Gap Index : It measures poverty by mean distance below the poverty line expressed as a
proportion of that line.
(Counting non-poor having zero gap) Head count discriminatory approach :

3- Squared Poverty Gap Index : The SPG Index is the mean of the squared proportionate poverty gaps.

 Measurement of poverty

4- Human Poverty Index : Index Indicating denial of choices and opportunities those are most basic to
human development.

Three elements of human life or human development: (1) Longevity (2) Knowledge, and (3)
Decent standard of living.

 Human Poverty

 Deprivation of basic human needs in terms of food, shelter, education, health facilities is termed
as Human Poverty.

 The denial of opportunity and choices are causes of human poverty.

 Human Poverty Index is a composite Index which measures three elements of human life : 1)
Longevity 2) knowledge and 3) access to basic needs :

 Construction of Human poverty Index

THREE VARIABLES OF DEPRIVATION :

1) Survival Deprivation : People not expected to survive to age 40. (%)

2) Deprivation in education and knowledge : Adult illiteracy rate and Education up to VIII class

3) Deprivation in economic provisioning

a) Access to safe water

b) Access to health services

c) Underweight children under age 5.

Poverty Line
 The poverty line, is the minimum level of Income deemed necessary to achieve an adequate
Standard of Living.

 Determining the poverty line is usually done by finding the total cost of all the essential items/
resources that an average human adult consumes in one year.

 This approach is needs-based in the sense that an assessment is made of the minimum
expenditure needed to maintain a tolerable life
 MEASUREMENT OF POVERTY
 In India, 2400 calorie in rural area and 2100 calorie intake are required to sustain human body
of an adult male.

 Those adult who are not getting 2400 calorie intake in rural area and 2100 calorie in urban areas
may be treated as poor.

 Average intake of calorie is 2250.

 According to World Bank 1$ per day is required to meet the food requirement. Persons with less
than 1.25 $ per day income may be treated as living in extreme poverty.

Poverty Line in India

 In India, the poverty line denotes monthly per capita consumption expenditure below Rs. 49.00
for rural areas and Rs. 54.00 for urban areas in 1977-78 on the 1973-74 prices .

 Rs. 356.35 for rural areas and Rs. 538.60 for urban areas on the in 2004-05 on current prices of
2004-05.

 Minimum Monthly Income required in 2011-12 for Rural Area: Rs. 815

Urban Area Rs. 1000 (RBI)

 [Source : 61st round of the National Sample Survey (NSS)]

Poverty Estimate
 The Planning Commission, which is the nodal official agency for poverty estimation, has
estimated that 27.5% of the rural population was living below the poverty line in 2004–2005,
down from 51.3% in 1977–1978, and

 36% in 1993-1994

 Poverty Estimate in 2011-12 : 21.9 %

 Rural Poverty in India

Year Persons livimg below poverty line

--------------------------------------------------------------

1950-51 47 % 1954-55 64 %
1960-61 45 % 1977-78 51 %

1987-88 39 % 2004-05 27 %

According to Prof. Dandekar and Rath, the urban poor are only an overflow of the rural poor, into the
urban area.

 75% of the poor are in rural areas with most of them comprising daily wagers, self-employed
households and landless labourers

World Bank Estimates of Poverty

 The World Bank defines

 Extreme poverty as living on less than US$ (PPP) 1 per day,

 Moderate poverty as less than $2 a day.

 It has been estimated that in 2001,

A) 1.1 billion people had consumption levels below $1 a day and

B) 2.7 billion lived on less than $2 a day.

 Magnitude of World poverty

 One third of deaths - some 18 million people a year or 50,000 per day - are due to poverty-
related causes. That's 270 million people during 1990-2005, the majority women and children.

 Every year nearly 11 million children die before their fifth birthday.

 In 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less
than $2 a day

 800 million people go to bed hungry every day.