SHIBAM GHOSH

XI D

ROLL NO. 41

ECONOMICS
PROJECT 2

TOPIC- POVERTY
 INTRODUCTION
India is a developing nation. Although its economy is
growing, poverty is still a major challenge. However,
poverty is on the decline in India. It has around 84
million people living in extreme poverty which makes
up ~6% of its total population as of May 2021. The
COVID-19 pandemic is estimated to push an additional
90 million to 115 million people into extreme poverty
this year, with the total rising to as many as 400 million
by 2021, depending on the severity of the economic
contraction.
Poverty is the state of having little material
possessions or income. Poverty can have diverse
social, economic, and political causes and effects.
[1] When evaluating poverty in statistics or
economics there are two main measures:
Absolute poverty measures compare income
against the amount needed to meet basic
personal needs, such as food, clothing, and
shelter.[2] Relative poverty measures when a
person cannot meet a minimum level of living
standards, compared to others in the same time
and place. Thus relative poverty is defined varies
from one country to another, or from one society
to another.

Statistically, as of 2019, most people on the

planet live in poverty: (in Purchasing Power Parity
dollars) 85% live on less than $30 per day, two-
thirds live on less than $10 per day, and 10% live
on less than $1.90 per day (extreme poverty).[3]
Even when countries experience economic
development, the poorest citizens of middle-
income countries frequently do not gain an
adequate share of their countries’ increased
wealth to leave poverty.[4] Governments and
non-governmental organizations have
experimented with a number of different policies
and programs for poverty alleviation, such as
electrification in rural areas or housing first
policies in urban areas. The international policy
frameworks for poverty alleviation is summarized
in Sustainable Development Goal 1: "No
Poverty".
Social forces, such as a gender, disability or race
or ethnicity, can exacerbate issues of poverty --
with women, children and minorities frequently
bearing unequal burdens of poverty. Moreover,
impoverished individuals are more vulnerable to
the effects of other social issues, such as the
environmental effects of industry or the impacts
of climate change or other natural disasters or
extreme weather events.

CAUSES OF POVERTY

#1.Lack of good jobs/job growth

This is the first reason a lot of people think about. When you
don’t have a good job, you aren’t getting a good income. In
many countries, traditional jobs like farming are disappearing.
The Democratic Republic of Congo is a good example, where
most of the population live in rural areas stripped of natural
resources from years of colonialism.

#2.Lack of good education

The second root cause of poverty is a lack of education. Poverty
is a cycle and without education, people aren’t able to better
their situations. According to UNESCO, over 170 million
people could be free of extreme poverty if they only had basic
reading skills. However, in many areas of the world, people
aren’t getting educated.

#3.Warfare/conflict
Conflict has a huge impact on poverty. In times of war,
everything stops. Productivity suffers as well as a
country’s GDP. It’s very difficult to get things going
again as foreign businesses and countries won’t want to
invest. For families and individuals, war and conflict can
make it impossible to stay in one place.

#4: Weather/climate change

According to the World Bank, climate change has the
power to impoverish 100 million people in the next
decade or so. We know climate change causes drought,
floods, and severe storms, and that can take down
successful countries while pulling poor ones down even
further. Recovering is extremely difficult, as well,
especially for agricultural communities where they
barely have enough to feed themselves, let alone prepare
for the next harvest year.

#5.Social injustice
Whether it’s gender discrimination, racism, or other
forms of social injustice, poverty follows. People who
are victims of social injustice struggle with getting a
good education, the right job opportunities, and access to
resources that can lift them out of poverty. The United
Nations Social Policy and Development Division
identifies “inequalities in income distribution and access
to productive resources, basic social services,
opportunities” and more as a cause for poverty.

#6.Lack of food and water

Without access to basic essentials like food and water,
it’s impossible to get out of poverty’s cycle. Everything a
person does will be about getting food and water. They
can’t save any money because it all goes towards their
daily needs.

#7.Lack of infrastructure
Infrastructure includes roads, bridges, the internet, public
transport, and more. When a community or families are
isolated, they have to spend a lot of money, time, and
energy getting to places. Without good roads, traveling
takes forever.

#8.Lack of good healthcare

People who are poor are more likely to suffer from bad
health, and those with bad health are more likely to be
poor. This is because healthcare is often too expensive or
inaccessible to those who need it.

CONCEPTS OF
POVERTY

INCOME POVERTY
In other words, if a household's income is less than 60
per cent of this average, HBAI considers them to be
living in poverty. This is the definition of relative
poverty, whereas absolute poverty is where a household's
income is less than 60 per cent of the median as it stood
in 2011.

HUMAN POVERTY
Human poverty is a definition of poverty which takes us
beyond the general definitions of poverty i.e., not having
enough money Being able to earn a fixed amount as set
by the government as poverty line does not actually free
them from poverty. A person who is unable to get proper
education and shelter and nutritious food, or if a child is
forced to child labour or they face social and caste
discrimination, then they come under human poverty.

It refers to the denial of political, social and economic

opportunities to an individual to maintain a reasonable
standard of living Illiteracy, lack of job opportunities,
lack of access to proper healthcare and sanitation, caste
and gender discrimination, etc.

ABSOLUTE POVERTY
Absolute poverty is the condition where people do not
have enough income to meet basic needs, such as access
to services and sanitation facilities. ... An example of
absolute poverty includes a 12-year-old boy who has
never been to see a doctor or attended school.

Absolute poverty was defined as: a condition

characterised by severe deprivation of basic human
needs, including food, safe drinking water, sanitation
facilities, health, shelter, education and information. It
depends not only on income but also on access to
services.

RELATIVE POVERTY
Relative poverty is the level of poverty that changes
based on context- it is relative to the economic climate.
Relative Poverty is when a household receives 60% of
the average household income in their own economy.
They do have some money, however, not enough to
afford anything above the basics.

Relative poverty is the condition in which people lack

the minimum amount of income needed in order to
maintain the average standard of living in the society in
which they live. Relative poverty is considered the
easiest way to measure the level of poverty in an
individual country.

MEASURES TO REMOVE
POVERTY
The nine important measures which should be taken to
reduce poverty in India are as follows: 1. Accelerating
Economic Growth 2. Agricultural Growth and Poverty
Alleviation 3. Speedy Development of Infrastructure
4. Accelerating Human Resource Development
5.Growth of Non-Farm Employment 6. Access to Assets
7. Access to Credit 8. Public Distribution System (PDS)
9. Direct Attack on Poverty: Special Employment
Schemes for the Poor.

1. Accelerating Economic Growth

In the fifties and sixties it was generally thought that

poverty in India can be significantly reduced by
accelerating economic growth. According to this view,
benefits of economic growth will trickle down to the
poor in the form of more employment opportunities,
greater productivity and higher wages. With this it was
expected that the poor will be raised above the poverty
line.

Various growth models put forward in the fifties and

sixties such as Harrod-Domar growth model,
Mahalanobis growth model, Lewis’ model of economic
development with unlimited supplies of labour suggested
rapid growth of the modern industrial sector to tackle the
problem of poverty in

the long sun. For this purpose they suggested for

increasing the rate of capital formation so as to generate
more employment opportunities and increase
productivity of labour.

Though this is correct that higher rate of capital

formation is necessary for accelerating economic growth
and thereby for solving the problem of poverty, but this
will not generate sufficient employment opportunities if
labour – saving capital-intensive techniques of
production are used in the process of growth.
This has been clearly brought out by the actual
experience in India in the eighties and nineties whereas
in the two decades of development, rate of growth in
GDP achieved is in the range of 5.5 per cent to 6 per cent
per annum there has been only little increase in
employment opportunities, especially in the organised
industrial sector.

2. Agricultural Growth and Poverty

Alleviation
Agricultural growth has been recognized as an important
factor that contributes to marked reduction in poverty. A
study made by Montek Ahuluwalia, former member of
Planning Commission, brought clearly that agricultural
growth and poverty are inversely related; the higher
agricultural growth leads to lower poverty ratio. The
expe-rience of Punjab and Haryana in the late sixties and
in

the seventies confirmed this inverse relation between

agriculture growth and poverty. The growth in
agricultural output in these states propelled by the
adoption of new-high yielding technology caused a
marked reduction in poverty in these states. Rural
poverty ratio in Punjab and Haryana was 6.4 and 8.3 per
cent respectively in 1999-2000.

Therefore, other states have been urged to follow the

path of Punjab and Haryana for reduction of rural
poverty. Thus, Late Prof. S. Chakravarty states, “the
solution to the problem of rural poverty requires that
small farmers must also be given access to land-
augmenting innovations”. By land augmenting
innovations he means the new high-yielding technology
represented by green revolution that occurred first in
Punjab and Haryana.

3. Speedy Development of Infrastructure

An important measure to generate employment
opportunities for the poor and to raise their productivity
is the speedy development of infrastructure. Since private
sector is not attracted to make adequate investment in
infrastructure, public investment needs to be stepped up
for its development. Infrastructure development consists
of building of roads, highways, ports,
telecommunication,

power and irrigation. They involve mainly construction

work which is highly labour intensive.

Besides, the availability of infrastructure such as power

and irrigation greatly raise productivity of labour. C.H.
Hanumantha Rao in his study of East and South East
Asian Countries finds that reduction in rural poverty in
them achieved through economic growth occurred due to
the fact that physical infrastructure in them were already
highly developed.

4. Accelerating Human Resource

Development
Besides physical infrastructure development, poverty can
also be reduced through human resource development.
Human resource development requires greater
investment in educational facilities such as schools to
promote literacy, technical training institutes and
vocational colleges to import skills to the people.
Further, human resource development requires health
care by public investment in Primary Health Centres,
dispensaries and hospitals.

This human resource development not only generates a

good deal of employment opportunities but also raises
productivity and income of the poor. Further, people
equipped with skills, education and good health can
easily get wage employment or self-employment with
higher productivity.

5.Growth of Non-Farm Employment

For reduction of poverty growth of non-farm
employment in the rural areas is of special importance.
Non-farm employment is created in marketing (i.e., petty
trade), transportation, handicrafts, dairying, and forestry,
processing of food and other agricultural products, repair
workshops.

A study of poverty alleviation in Haryana brings out that

significant reduction in rural poverty in Haryana in spite
of a reduction in employment opportunities in agriculture
was due to the remarkable increase in non-farm
employment. Similarly, a study of Andhra Pradesh also
shows that poverty declined more rapidly in the districts
adjoining Hyderabad city due to large increase in non-
farm employment.

6. Access to Assets
Rapid growth of population after independence has led to
greater sub- di-vision and fragmentation of agricultural
holdings and lack of employment opportunities in
industries and other non-farm sectors has worsened the
conditions of agricultural labour and self-employed small
farmers.

7. Access to Credit
Availability of credit to the poor on easy terms can create
the conditions for small farmers gaining access to
productive resources such as HYV seeds fertilizers,
construction of minor irrigation such as wells and tube
wells. This will enable the

small farmers to adopt high- yielding technology to raise

their productivity.

The new technology is size-neutral, that is, it can be

adopted equally well by small farmers. But the adoption
of new technology requires financial resources which are
lacking with the small farmers. Besides, the non-farmer
poor need credit for marketing, food processing,
dairying, forestry, development of handicrafts which can
provide them gainful employment.

Important changes have been introduced in the credit

delivery system in India. Expansion of network of rural
branches of commercial banks after nationalisation and
fixation of limits for compulsory lending to the priority
sectors (which include agriculture, small-scale industries)
and fixation of lower interest rates to be charged from the
poor farmers and artisans some progress has been made
in this regard.

8. Public Distribution System (PDS)

Poor households spend nearly 80 per cent of their income on
food. Therefore, an effective way of raising rural incomes and
ensuring food security to the poor households is an assured
supply of adequate quantity of food-grains and other essential
commodities at subsidised prices, that is, at prices which are
lower than the market prices.

A properly functioning public distribution system which is

targeted to the poor households is an important element of the
strategy for poverty reduction. The Central Government
Organisation ‘Food Corporation of India’ procures the food-
grains from the farmers at the minimum support prices (MSP)
and store them in their warehouses located throughout the
country.
The food-grains so procured are allotted to the state
governments to be sold through the public distribution systems
(i.e., ration shops) at subsidised prices which are below market
prices. The difference between the two prices is paid by the
Central Government as subsidy. The expenditure on food
subsidy has greatly increased in recent years. The ratio of
release of food-grains through PDS to total food-grains is
around 10 to 13 per cent. Some economists have suggested
lowering of subsidies. What is needed is to ensure subsidised
food-grains supply through PDS be made only to the targeted
group of households living below the poverty line and not to all
households.

9. Direct Attack on Poverty: Special

Employment Schemes for the Poor
It was realised in the early seventies that it would take a
very long time for economic growth to generate enough
employment opportunities to provide productive
employment to all the unemployed and poor in the
country. Therefore, a strategy of providing employment
to the poor in

the short run, special schemes of employing poor on rural

public works was proposed by Dandekar and Rath in
their now famous work “Poverty in India”.

The special employment scheme of rural public works

which was launched by the Government in 5th Five Year
Plan constitutes a direct attack on poverty as it does not
depend on the trickledown effect of economic growth on
the poor. There are mainly two types of such special anti-
poverty schemes launched by the Government from time
to time.

First, there are several special schemes of providing

wage employment to the poor. These include Jawahar
Rozgar Yojana (JRY), now named as Jawahar Gram
Stimridhi Yojana after restructuring it. It is centrally
sponsored scheme implemented by Gram Panchayats to
generate wage employment for the rural poor.

The approach of this scheme is to employ the poor on

building durable and productive community assets such
as roads, small irrigation facilities, school buildings, rural
electrification. These durable productive assets after
completion would create employment opportunities on
sustained basis.
SPECIAL PROGRAMMES
UNDERTAKEN BY THE
GOVERNMENT
1.Integrated Rural Development Programme:

2.Jawahar Rozgar Yojana /Jawahar Gram

Samriddhi Yojana (JGSY):

3.Employment Assurance Scheme:

4.Food for Work Programme:

5.Sampoorna Gramin Rozgar Yojana:

6. Rural Housing – Pradhan Mantri Gramin

Awaas Yojana (PMGAY):
THE EFFICACIES AND SHORT
COMINGS OF THE
PROGRAMMES
1. Integrated Rural Development
Programme:

It was introduced in the year 1978-79 and universalized

from 2nd October, 1980. The main aim is to provide
support to the rural poor in the form of subsidy and bank
credit for productive work opportunities through
successive plan periods.

2. Jawahar Rozgar Yojana /Jawahar

Gram Samriddhi Yojana (JGSY):
Two new schemes, namely, National Rural Employment
Programme (NREP) and Rural Landless Employment
Guarantee Programme (RLEGP) were merged in the
year1989, under Jawahar Rozgar Yojana (JRY). The
purpose was to generate good work prospects for the
unemployed in rural areas by creating economic
infrastructure, community and social assets.

3.Employment Assurance Scheme

This scheme was launched in the year 1993. It mainly
covers drought-prone, desert, tribal and hill area blocks.
In the year1997-98, it extended to several other blocks.
Employment assurance scheme was planned for creating
employment opportunity in the form of manual work
when there is no agricultural season. It was expected to
lead to the creation of robust economic and social
infrastruc¬ture and address the needs of people.

4. Food for Work Programme

In the year 2000, the Food for Work Programme was
started as a component of EAS. It started with some
major drought- affected states, namely Maharashtra,
Rajasthan, Orrisa, Gujarat, Himachal Pradesh, Madhya
Pradesh, Uttaranchal and Chhattisgarh. The main aim is
to enhance food security through wage employment.

5. Sampoorna Gramin Rozgar Yojana:

The new Sampoorna Gramin Rozgar Yojana (SGRY)
Scheme started in 2001 was the mix of old JGSY, EAS
and Food for Work Programme. The primary aim of the
scheme was the generation of wage employment,
creation of good economic infrastructure in rural areas as
well as food provision and nutrition security for the
underdeveloped.
6. Rural Housing – Pradhan Mantri
Gramin Awaas Yojana (PMGAY):
PMGAY is a government flagship programme, created
for providing housing for the Indian rural poor. A similar
scheme for urban poor was launched in 2015 as Housing
for All. For BPL population, similar program was
launched by late PM Rajiv Gandhi, known as Indira
Awaas Yojana which was one of the major flagship
programs.

SHORTCOMINGS:
The resources provided are inadequate. There was large
number of over dues. Poor quality of assets provided to
the beneficiaries. The follow up of the beneficiaries was
inadequate.Scholars, while assessing these programs,
state three major areas of concern that prevent their
successful implementation. Due to the unequal
distribution of land and other assets, the benefits from
direct poverty alleviation programs have been
appropriated by the non- poor.Compared to the
magnitude of poverty, the amount of resources allocated
for these programs is not sufficient. Moreover, these
programs depend mainly on government and bank
officials for their implementation.

Since such officials are ill-motivated, inadequately

trained, corruption-prone, and vulnerable to pressurefrom
a variety of local elites, the resources are inefficiently
used and wasted.

There is also non-participation of local-level institutions

in program implementation.

Government schemes have also failed to address the vast

majority of vulnerable people who are living on or just
above the poverty line. It also reveals that high growth
alone is not sufficient to reduce poverty. Without the
active participation of the poor, successful
implementation of any program is not possible.
CONCLUSION
Debate on poverty in India has remained mostly in the
domain of economists. Poverty is defined in terms of
income, expenditure and nutritional value (calorie
intake). Social dimension of poverty is a neglected area
of study. Poverty is more of social marginalisation of an
individual, household or group in the community/society
rather than inadequacy of income to fulfill the basic
needs. Indeed, inadequate income is therefore one of the
factors of marginalisation but not the sole factor. The
goal of poverty alleviation programme should aim
merely increasing the income level of individual,
household or group but mainstreaming marginalised in
the development process of the country. The country
cannot claim economic growth when sections of the
people are marginalised to the periphery of the society.
The rapid economic growth process should accelerate the
access to services like education and health services for
all, especially the marginalised citizens. The government
should also aware the rural population about the
importance of small family and mortality rate.India has
already achieved the target of reducing poverty by half
with 21.9% of its 1.2 billion people living below the
poverty line or having income of less than $ 1.25 a day
as per UN report. India has set a target of 23.9% to be
achieved by 2015.

EVALUATION
Poverty means that the income level from employment is
so low that basic human needs can't be met. ... In India,
21.9% of the population lives below the national poverty
line in 2011. Poverty is a state or condition in which a
person or community lacks the financial resources and
essentials for a minimum standard of living. Poverty
means that the income level from employment is so low
that basic human needs can't be met. n India, 21.9% of
the population lives below the national poverty line in
2011. Bihar, Jharkhand and Uttar Pradesh have emerged
as the States with most people living in poverty in India,
according to Niti Aayog's Multidimensional Poverty
Index (MPI). As per the index, 51.91% population of
Bihar is poor, followed 42.16% in Jharkhand, 37.79% in
Uttar Pradesh. India has not counted its poor since 2011.
But the United Nations estimated the number of poor in
the country to be 364 million in 2019, or 28 per cent of
the population. All the estim The high population growth
rate is one of the major reasons of poverty in India. This
further leads to a high level of illiteracy, poor health care
facilities and lack of access to financial resources. ... The
caste system and unequal distribution of income and
resources is another reason for poverty in India.ated new
poor due to the pandemic is in addition to this.
ACKNOWLEDGEM
ENT
I WOULD LIKE TO EXPRESS MY SPECIAL THANKS
OF GRATITUDE TO MY ECONOMICS TEACHER
MRS.M.SIRCAR FOR GIVING US THE GOLDEN
OPPURTUNITY TO DO THIS BEAUTIFUL

PROJECT.

I WOULD ALSO LIKE TO THANK MY PARENTS TO

COMPLETE IT WITHIN TIME.