Unit 2-Poverty, Inequality and

Economic Growth
Poverty
 Poverty directs to a state of affairs where folks are empty with basic
requirements of life. It is usually characterized by garments, a place of
protection, and inadequacy of food.
 India is one in all the poorest countries in the world. Several Indian folks don’t

get 2 meals every day. They do not have sensible homes to measure in. Their
youngsters don’t get correct schooling. Poor folks are the depressed and
disadvantaged category.
 Poverty in urban India

1)Poor individuals move from distinct rural areas to towns and cities in search of
jobs for their livelihood.
2) Financial gain of quite eight large integer urban folks is calculable to fall into a
level which is lower than the poverty level.
3) A financial gain of urban people who are facing poverty is very unstable. An
outsized range of them are either casual staff or freelance
Causes of Poverty
 Poor agriculture: Bharat is principally associated in the nursing agricultural country. Regarding
eightieth individuals of our country rely on agriculture. However, our agriculture is in an exceedingly
dangerous manner. Farmers have a poor financial condition and they are illiterate too. They do not
understand the new strategies of farming. They do not have smart facilities of irrigation. They don’t get
fertilizers and seeds in time. So, this results in poor yield. Irrigation and agriculture aren’t profitable
nowadays. We tend to face the food shortage. Thus, poor facilities of agriculture are one among the
causes of India’s financial condition.
 Growing population: Our population is increasing at a high rate. However, our resources are restricted.

The expansion in population creates issues for the United States of America. At present, our population is
1.20 billion; tomorrow we’ll be 1.21 billion and then on. We’d require a lot of food, a lot of homes, and a
lot of hospitals for them. Thus we’ve got no cash to pay for development comes. The high growth rate of
population should be checked. If it isn’t checked then, we may not be able to take away India’s financial
condition.
 A gap between the rich and poor: The large gap between rich people and also the poor is additionally

liable for India’s poor financial condition.

 Corruption and black-money: Corruptions are happening in each walk of life. Individuals became

egoistic. They ignore the national interests. Cash in black causes the matter of economic process. Some
individuals have all the privileges. However several other innocent people are suffering because of this.
Black cash affects economy of the country. All these results in poor financial condition
Poverty in India
 India is the second most populous country after China
  Most of the people live in the keeps afloat with odd jobs. The lack of employment which
provides a livable wage in rural areas is driving many Indians into rapidly growing
metropolitan areas such as Bombay, Delhi, Bangalore or Calcutta.
 most of the people expect a life of poverty in the mega-slums, without sufficient drinking water
supply, without garbage disposal and in many cases without electricity. The poor hygiene
conditions are the cause of diseases such as cholera, typhus and dysentery, in which especially
children suffer and die.
 High infant mortality- Pneumonia, malaria and diarrheal diseases as well as chronic
malnutrition are the most frequent causes of death.
 Malnutrition
 Child labor - no time to play and learn, Lack of education - no opportunities without education
 Child marriage - the early end of childhood
Inequality
Economic inequality
 Economic inequality is the unequal distribution of income and opportunity
between different groups in society. It is a concern in almost all countries
around the world and often people are trapped in poverty with little chance
to climb up the social ladder. But, being born into poverty does not
automatically mean you stay poor. Education, at all levels, enhancing skills,
and training policies can be used alongside social assistance programs to
help people out of poverty and to reduce inequality.
 Economic inequality is the difference in how assets, wealth, or income are
distributed among individuals and/or populations. It is also described as the
gap between rich and poor or the "wealth gap”
 Income inequality is an extreme disparity of income distributions with a
high concentration of income usually in the hands of a small percentage of a
population. When income inequality occurs there is a large gap between the
wealth of one population segment compared to another
Income inequality
 Income inequality studies help to show disparity of
incomes among different population segments.
 Some of the most common types of income disparities
studied include those among: males vs. females and
different ethnicities.
 Case studies and analysis of income inequality, income
disparity, and income distributions are provided
regularly by a variety of top sources.
 The Gini Index is a popular way to compare income
inequalities universally across the globe.
 High increases in pay of people in top-paying jobs
 Increasing wealth including rising property prices
 Growing gaps between urban and rural areas
 Increasing pay of those with higher levels of
schooling especially with the growth of jobs and
pay in high-knowledge industries such as computer
gaming, engineering systems, financial trading
 Linked effects of inequality in health and education
 Gender
 Caste
 Religion
 Ethnicity(Tribal)
Economic growth
 Economic growth can be defined as an increase in the capacity of
economy to produce goods and services compared from one period of
time to another.

 Economic growth is an increase in the production of goods and

services over a specific period. Economic growth creates
more profit for businesses. As a result, stock prices rise. That gives
companies capital to invest and hire more employees.
 As more jobs are created, incomes rise. Consumers have more money
to buy additional products and services. Purchases drive higher
economic growth. For this reason, all countries want positive economic
growth. This makes economic growth the most watched economic
indicator.
Gross Domestic Product (GDP)
 Gross Domestic Product (GDP) is the total monetary or market value
of all the finished goods and services produced within a country's
borders in a specific time period. As a broad measure of overall
domestic production, it functions as a comprehensive scorecard of the
country’s economic health.
   Nominal GDP is the measurement of the raw data.
    Real GDP takes into account the impact of inflation and allows
comparisons of economic output from one year to the next and other
comparisons over periods of time.
   GDP growth rate is the increase in GDP from quarter to quarter.
  GDP per capita measures GDP per person in the national populace;
it is a useful way to compare GDP data between various countries.
Gross Domestic Product (GDP
 GDP = C + G + I + NX
 "C" is equal to all private consumption, or consumer
spending, in a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's businesses
spending on capital
"NX" is the nation's total net exports, calculated as
total exports minus total imports. (NX = Exports -
Imports)
Industrial Development
 At the time of independence, Punjab had only a few
hundred industrial units mainly processing food
 grains, cotton ginning and brick kilns. Most of the
manufactured items of even common use came from
outside.
 During the post-independence period, industrial
development in Punjab took place in phases. Thus, in
the fifties the cycle-parts and hosiery industries took
their roots, while in the sixties, with the advent of the
green revolution, agriculture-related industries like farm
machinery manufacturing came up
 The main focus in the seventies was on such
industries as auto-parts and electronic items and
during the eighties on such resource-based
industries as food processing, vanspati, edible and
non-edible oils and sugar in a big way.
Diversification of industry started, with the process
of liberalization and economic reforms, while many
of the established processing units, both in the
small and medium and large sectors, came under
pressure
Why are urban-rural linkages so important?

 In many settlements, a large number of households live, work in and

depend on both rural and urban ecosystems that sustain human life beyond
political and administrative spheres.
 The reciprocal and repetitive flow of people, goods and financial and
environmental services (defining urban-rural linkages) between specific
rural, semi-urban and urban locations are interdependent; they are the
reality of socio-spatial arrangements, creating places with distinct yet
interwoven, socially constructed identities
 Promoting rural-agricultural development
 Employment generation as well as centers of growth for more wide-
spread development;
Industrial Development Obstacles
 Poor Capital Formation
 Political Factors
 Lack of Infrastructural Facilities
 Poor Performance of the Agricultural Sector
 Poor Performance of the Public Sector
Significance of Urban Centers for Rural
Dependencies
 They are crucial for the efficient location of services and infra to support
rural development
 They serve as markets for agricultural goods
 They serve as channels thru which agricultural products from rural areas
are distributed to larger urban markets

They are sources off-farm employment.
Significance of Urban Centers for Rural
Dependencies

 In the history of economic structural transformation, it is

crucial to increase agricultural productivity because only then
can the agricultural sector release its surplus labor for the
urban or industrial and other sectors of the economy
 If employment opportunities are not available in the small and
intermediate urban centers, people will migrate to large
metropolitan areas.
Trade and Development
  Trade, also called goods exchange economy ,is to
transfer the ownership of goods from one person or
entity to another by getting a product or service in
exchange from the buyer.
 Trade is the basic component of economic activity
and is undertaken for mutual advantage
Why Trade?
 All countries are different from each other.
 To achieve the economics of scale in production.
Trade and Development
 Trade can help boost development and reduce poverty by
generating growth through increased commercial
opportunities and investment, as well as broadening the
productive base through private development.
  Trade enhances competitiveness by helping developing
countries reduce the cost of inputs, acquire finance through
investments, increase the value added of their products and
move up the global value chain 
Trade and Development
 Trade facilitates export diversification by allowing
developing countries to access new markets and
new materials which open up new production
possibilities
 Trade encourages innovation by facilitating
exchange of know-how, technology and investment
in research and development, including through
foreign direct investment
Trade and Development
 Trade openness expands business opportunities for
domestic companies by opening up new markets,
removing unnecessary barriers and making it easier
for them to export.
 Trade expands choice and lowers prices for
consumers by broadening supply sources of goods
and services and strengthening competition.
Trade and Development
  Trade plays a role in the improvement of quality,
labor and environmental standards through
increased competition and the exchange of best
practices between trade partners, building capacity
in industry and product standards.
 Trade contributes to cutting government spending
by expanding supply sources of goods and services
and strengthening competition for government
procurement
Privatization
 ‘Privatization, is a term that is employed to convey
a variety of ideas. The idea that it most prominently
suggests is ‘denationalization’ (in the sense of
transferring the ownership of a public enterprise to
private hands). Another idea in vogue is
‘liberalization and deregulation’; which unleash
forces of competition
Privatization
 It will improve the environment public enterprises operate in
and thereby strengthen their managers’ incentives to be
efficient. These in turn can contribute to making the Indian
economy substantially more efficient.
 Privatization may create conditions for substantial additional
investment, which may help in generation of a large number
of productive employment opportunities, which in turn may
contribute to removing poverty.
 Consumers may gain from privatization.
Population and Development
 Overuse of Natural Resources
 Per Capita Income
 Agricultural Development
 Employment
 Environment