2. Learning Objectives:
To understand Rational behind Vicious Circle of Poverty.
To find out reasons of Vicious Circle of Poverty.
To give remedial actions to eradicate Poverty from India.
. Learning Outcome:
Students understood the entire background of Vicious
Circle of Poverty
3. Introduction
Nurkse believes that poverty is self-perpetuating. A
country is poor because it is poor. Poverty is its own cause. This
is the Paradox of Poverty diagnosis of the economic
backwardness of underdeveloped countries.
The assumption behind the vicious cycle
theory is that the saving rate depends on the level of
per capita income.
4. Definition
The “vicious circle of poverty” refers
to
a state wherein it is absolutely
impossible for a household (a family)
to break out of poverty without
external intervention.
9. Vicious Circle of Market Imperfections
Meier and Baldwin have described a third vicious
circle based on capital deficiency due to market
imperfections.
Meier and Baldwin,
“Underdeveloped resources are, therefore, both a
consequence and cause of the backward people… The
more economically backward are the people, the less
developed will be natural resources, lesser the
development of natural resources more the people are
11. Remedial Actions to eradicate Poverty
Population Control
Increase in Employment
Equal distribution of Income
Regional Poverty
Problem of Distribution
12. Remedial Actions to eradicate Poverty
Fulfillment of minimum needs of the Poor
Increase in the productivity of the Poor
Changes in techniques of Production
Stability in Price Level
Development of Agriculture
Increase in the rate of growth
