This document discusses poverty in India. It defines absolute and relative poverty. Absolute poverty is defined based on minimum calorie intake, while relative poverty is judged based on comparisons of living standards. The poverty line divides the poor and non-poor based on household expenditure. Rural poverty is caused by issues like small land holdings and urban poverty by migration and lack of infrastructure. Causes of poverty include population growth, low agricultural productivity, and unequal income distribution. Measures to reduce poverty include population control, increased employment, fulfillment of basic needs, and increased agricultural productivity.

1. CLASS 11
ECONOMICS
BY KRISHNA SINGHANIA
"POVERTY IN INDIA"

2. INTRODUCTION
 It is a socio-economic phenomenon .
 Deprivation of basic needs and denial of opportunities has
led to social exclusion .
 Economic drain of resources , decline of handicraft and
cottage industries , oppressive economic policies ,etc.
 Garibi hatao have helped in greater reduction of poverty .
 People are unable to fulfill basic needs of life due to lack of
sufficient income .
 It is Multi dimensional concept :-
Material dimension :-food , clothing , shelter , health , etc .
Non material dimension :- social discrimination

3. CONCEPTS
OF
POVERTY
Absolute
Poverty
Relative
Poverty
Absolute Poverty :- On the basis of minimum calorie intake .
Rural area is 2400 calorie and urban area is 2100 calorie , on an average
per capita daily calorie require is 2250 .
It can be eradicated through effective poverty alleviation measures .
Relative Poverty :- Judged on the basis of comparison of relative standards
of living of different sections of people .
On the basis of level of income , wealth , consumption , economic inactivity .
It is universal phenomenon , cannot be eradicated completely .

4. POVERTY LINE
 It is an imaginary line that divides the poor & non-poor. Determined
in terms of per capita household expenditure .
 It is defined as “ the threshold expenditure or the amount necessary
to purchase a basket of goods and services that are necessary to
satisfy basic human needs at socially acceptable levels” .
 To determine population of APL and BPL .
 To identify poor on the basis of household consumption expenditure .
 To track and compare poverty in a region over period of time .
 To estimate required expenditure on poverty alleviation programmes
.
 It differs from country to country by ‘World Bank’ .($ 1.90 per capita)
 21.2% of India’s population lived below poverty line .

5. TYPES OF
POVERTY
RURAL
POVERTY
URBAN
POVERTY
Rural Poverty :- Deprivation of basic needs among certain section of the population
living in the villages .
E.g.:- Small and marginal farmers , agricultural labour , contractual and landless
labours .
Low agricultural productivity , drought , poor rural infrastructure , illeteracy , lack of
alternative jobs , rural indebtness ,etc .
Urban Poverty :- Deprivation of basic needs among certain section of the population
living in towns and cities .
Spillover effects of migration , lack of affordable housing , illeteracy , slow industrial
growth , lack of infrastructure , etc.

6. EXTENT OF POVERTY IN INDIA
 Poverty Ratio:- Number of poor to that of total
population .
 Since 1962 , the Planning commission had appointed
several working groups for estimation of poverty .

8. ESTIMATES OF POVERTY
 Earlier poverty line does not include the non food
components such as health and education .
 In 2014 , under chairmanship of Dr. C. Rangrajan
a new poverty line was decided for urban and
rural area .
 Table 8.1
 Table 8.2

10. CAUSES OF POVERTY
 http://www.yourarticlelibrary.com/poverty/causes-of-
poverty-in-india/38387
 1. Rapidly Rising Population: The population during the
last 45 years has increased at the rate of 2.2% per annum.
On average 17 million people are added every year to its
population which raises the demand for consumption goods
considerably.
 2. Low Productivity in Agriculture: The level of
productivity in agriculture is low due to subdivided and
fragmented holdings, lack of capital, use of traditional
methods of cultivation, illiteracy etc. This is the main cause
of poverty in the country.
 3. Under Utilized Resources: The existence of under
employment and disguised unemployment of human
resources and under utilization of resources have resulted in
low production in agricultural sector. This brought a down fall
in their standard of living.

11.  4. Low Rate of Economic Development: The rate of
economic development in India has been below the required
level. Therefore, there persists a gap between level of
availability and requirements of goods and services. The net
result is poverty.
 5. Price Rise: The continuous and steep price rise has
added to the miseries of poor. It has benefited a few people
in the society and the persons in lower income group find it
difficult to get their minimum needs.
 6. Unemployment: The continuously expanding army of
unemployed is another cause of poverty. The job seeker are
increasing in number at a higher rate than the expansion in
employment opportunities.
 7. Shortage of Capital and Able Entrepreneurship:
Capital and able entrepreneurship have important role in
accelerating the growth. But these are in short supply
making it difficult to increase production significantly.

12. 8. Political Factors: The Britishers started lopsided
development in India and reduced Indian economy to a
colonial state. They exploited the natural resources to suit
their interests and weaken the industrial base of Indian
economy. In independent India, the development plans have
been guided by political interests. Hence, the planning was a
failure to tackle the problems of poverty and unemployment.
 9. Unequal Distribution of Income: Poverty in our country
cannot be removed simply by increasing production or
checking growth of population. What is of paramount
importance is that inequality in the distribution of income and
concentration of wealth should be checked. Government can
reduce inequality of income and check concentration of
wealth by pursuing suitable monetary and price policies.
 10. Problem of Distribution :In order to remove poverty,
mass consumption goods and food grains etc. should be
distributed first among the poor population. Existing public
distribution system should be re-organised and extended to
rural areas of the country.

13.  11. Regional Poverty: In India, proportion of poor in
some states, like Orissa, Nagaland, UP, Bihar etc. is
greater than the other states. Government should
provide special facilities and concessions to attract
private capital investment to backward regions. Public
sector enterprises should also be set up in backward
areas.
 12. Provision for Minimum Needs of the Poor:
Government should make efforts to provide for the
minimum needs, like drinking water, primary medical-
care, primary education etc. of the poor. Public sector
should make liberal expenditure on the poor to provide
at least minimum requirements.

14.  13. 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 organised sector has been quite insignificant.
 As a result, the demographic reassure on land has been
increasing resulting in unemployment, and disguised
unemployment in agriculture and the informal sector. Thus
has caused low productivity, low incomes and poverty.

15. VICIOUS CIRCLE OF POVERTY
LOW
NATIONAL
INCOME
LOW SAVING
LOW
INVESTMENT
LOW
PRODUCTION
LESS
EMPLOYMENT

16. GENERAL MEASURES TO ERADICATE
POVERTY
 http://www.economicsdiscussion.net/articles/suggestion
s-for-removal-of-poverty-from-india/2279
 (i) Population Control: Population in India has been
increasing rapidly. Growth rate of population is 1.8%. For
removal of poverty the growth rate of population should be
lowered.
 (ii) Increase in Employment: Special measures should be
taken to solve the problems of unemployment and disguised
unemployment. Agriculture should be developed. Small
scale and cottage industries should be developed in rural
areas to generate employment.
 (iii) Equal distribution of Income: Mere increase in
production and control on population growth will not remove
poverty in India. It is necessary that inequality in the
distribution of income should be reduced.

17.  (iv) Regional poverty: In States like Orissa, Nagaland, U.P
and Bihar etc. the percentage of the poor to the total
population is high. Govt. should give special concession for
investment in these regions. More PSU’s should be
established in these states.
 (v) Problem of Distribution: The public distribution system
(PDS) should be strengthened to remove poverty. Poor
section should get food grains at subsidized rates and in
ample quantity.
 (vi) Fulfillment of minimum needs of the Poor: Govt.
should take suitable steps to meet minimum needs of the
poor e.g., supply of drinking water and provision of primary
health centres and primary education.
 (vii) Increase in the productivity of the Poor: To remove
poverty, it is necessary to increase productivity of the poor.
The poor should be given more employment. More
investment should be made in pubic and private sectors to
generate employment.

18.  (viii) Changes in techniques of Production: India should
adopt labour intensive techniques of production. We should
have technical development in our economy in such a way
that labour resources could be fully employed.
 (ix) Stability in Price Level: Stability in prices helps to
remove poverty. If prices continue to rise, the poor will
become more poor. So Govt. should do it best to keep the
prices under control.
 (x) Development of Agriculture: The agriculture should be
developed to remove poverty. Rapid rate of growth of
agriculture production will help to remove urban as well as
rural poverty. Agriculture should be mechanized and
modernized. Marginal farmers should be given financial
assistance.
 (xi) Increase in the rate of growth: Slow rate of growth is
the main cause of poverty. So growth rate must be
accelerated. In 2003-04 the growth rate has been 6.5%
despite that 26% of population remains below poverty line.

19.  The Minimum Wages Act 1948 is an Act of Parliament
concerning Indian labour law that sets the minimum
wages that must be paid to skilled and unskilled
labours.
 In 1969 the Indian government nationalised 14 major
private banks; one of the big banks was Bank of India.
In 1980, 6 more private banks were nationalised.
 Education and poverty are inversely related. The higher
the level of education of the population, lesser will be
the number of poor persons because education imparts
knowledge and skills which is supportive in higher
wages. The direct effect of education on poverty
reduction is through increasing the earnings/income or
wages.