“Livelihoods of the urban poor: Case of Varanasi City in Uttar Pradesh in India”

“Livelihoods of the urban poor: Case
of Varanasi City in Uttar Pradesh in
India”
Summary Report
Arun Keshav
28 April 2015
arun.keshav@gmail.com

1
Contents
1. Introduction...........................................................................................................................................2
2. Review of the Literature .......................................................................................................................4
3. Research Methodology .........................................................................................................................5
4. Key Findings and Discussions ..............................................................................................................6
4.1. Profile of Livelihood Activities the Urban Poor: ..........................................................6
4.2. Assets Possessed by the Urban Poor .......................................................................11
4.3. Vulnerability of the Urban Poor.............................................................................26
4.4. Livelihood Strategies of the Urban Poor Households...................................................31
5. Conclusion and Recommendations.....................................................................................................33
Bibliography ...............................................................................................................................................36
Tables
Table 4.1.1 Sources of livelihoods for the urban poor in Varanasi City..................................................8
Table 4.3.1 Risk Terminology ...............................................................................................................27
Table 4.3.2 Shocks faced by the Urban Poor Households. ....................................................................28
Table 4.3.3 Exposure to systemic inefficiencies leading to increased vulnerability..............................28
Table 4.3.4 Impacts of risks not managed effectively............................................................................30
Figures
Figure 4.1.1 Share of livelihood activities in each sub-category of unorganised workers........................9
Figure 4.1.2 Mix of wage worker, self-employed and home-worker in male and female workers..........10
Figure 4.2.2 : Visual Representation of Social Relations as an Asset .......................................................21
Boxes
Box 4.2.1 High Achievement Motivation: Case of Ramashray...............................................................13
Box 4.2.2 Low Achievement Motivation: Case of Sharda’s husband- Lal Bahadur...............................14
Box 4.2.3 Addiction affecting returns on Human Capital: Case of Sarita Devi.......................................16
Box 4.2.4 Intra-Household Relations - Case of Binda Devi....................................................................17
Box 4.2.5 Commitment and sincerity of the female lead of household – Case of Manju Devi...............19
Box 4.2.6 The Free Lunch: Case of Collateral-Security Free Loans from MFIs.....................................21

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1. Introduction
Research motivation
Poverty is something which is still rampant and can be seen, observed and felt easily around, in
India. This made me ponder; on poverty, its attributes, and on lives of children, women and,
men, who live in abject poverty; on present and future of our country, amidst poverty. How do
they (poor) negotiate with this? What makes them so poor? Why poor continue to remain poor?
What stops them coming out of poverty? What sustains them amidst scarcity and crisis? What do
they do to earn their living? How do their family as a unit work? Can we do something to help
families move out of poverty? If yes, what? How? And so on...
Obviously, not simplest of the questions to answer! However when I got this opportunity to
research on topic of my interest, I decided to explore further in to some of these aspects related
to poor and poverty.
Hence the topic “Livelihoods of the urban poor: Case of Varanasi City” was chosen for study.
Research Questions
This research aimed to answer following research questions:
1. What are the characteristics of livelihood activities undertaken by Urban Slum Dwelling
(USD) poor households in Varanasi city?
2. What ‘Assets’ (tangible and intangible) do these urban slum dwelling poor households
possess and what are the characteristics of these assets?
3. What is the nature and sources of risks and shocks these households are vulnerable to?
4. Do households adopt any livelihood strategies to manage their assets to build upon their
capacities? If yes then what?
5. What could be the possible levers, which when applied, could lead to increased capacities
and reduced vulnerabilities of these households?

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The Concept of Livelihoods
Before proceeding further, it is important to get a clear conception of the concept of livelihoods.
Livelihoods are much more than mere income generation. Chambers and Conway (1992),
defines livelihood as comprising of “Capabilities, assets (stores, resources, claims and accesses)1
and activities required for means of living”. They go on to add that “a livelihood is sustainable
which can cope with and recover from stress and shocks, maintain or enhance its capabilities and
assets, and provide sustainable livelihood opportunities to the next generation; and contribute net
benefits to other livelihoods at the local and global levels in the long and in the short term.”
Chambers and Conway explain capabilities from livelihoods perspective as “being able to cope
with stress2
and shocks3
, and being able to find make use of livelihood opportunities. Such
capabilities as are not just reactive, they are also proactive and dynamically adaptable”.
Datta, Mahajan, & Thakur (2005) in BASIX’s “Resource Book for Livelihood Promotion” note
that that ideally:
• a livelihood should keep a person meaningfully occupied,
• in a sustainable manner,
• with dignity
Ellis & Freeman (2005) explains: “the term livelihood attempts to capture not just what people
do in order to make a living, but the resources that provide them with the capability to build a
satisfactory living, the risk factors that they must consider in managing their resources, and the
institutional and policy context that either helps or hinders them in their pursuit of a viable or
improving living”.
Desired livelihood outcomes like increase in income, increased well-being, improved food
security etc. are achieved through livelihood strategy that the households undertake.
“Livelihood strategies are used to denote the range and combination of activities and choices that
people make/undertake in order to achieve their livelihood goals (including productive activities,
investment strategies, reproductive choices, etc.)” (DFID, 1999).
1
Stores & Resources: These are tangible assets commanded by a household. Stores include food stocks, stores of
value like gold, jewelry, woven textiles and cash savings in banks of thrift and credit schemes. Resources include
land, water, trees, and livestock; and farm equipments, tools and domestic utensils.
Claims & Accesses: These are intangible assets with the household. Claims are demands or appeals which can be
made for material, moral or other practical support or access from individual or agencies. They are based on
combinations of right, precedent, social convention, moral obligation and power. Access is opportunity in practice to
use a resource, store or service (Chambers & Conway, 1992).
2
Stress: Stresses are pressures are pressures which are typically cumulative, predictable, variously continuous or
cyclical such as seasonal shortages; rising populations, declining soil fertility, and air pollution (Chambers &
Conway, 1992).
3
Shock: Shocks are impacts which are typically sudden, unpredictable, and traumatic, such as fires, floods, storms,
epidemics, thefts, civil disorder, and wars (Chambers & Conway, 1992).

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2. Review of the Literature
The review of the literature was centered on key terms like urban poverty, livelihoods,
livelihoods of the, the Asset-Vulnerability of the poor, livelihood strategy of the poor
households etc.
The gaps as identified of literature review are as follows:
• Major focus related to mainstream poverty research has been on identification of poor
and on measurement of poverty. Though identification and measurement are very
important and is a prerequisite for poverty alleviation interventions, this is not an end
in itself. It is important to look beyond these aspects to further understand the nature
poverty. Such that we may come closer to making more effective programmes for
poverty reduction.
• The major livelihood approach- the Sustainable Livelihood Approach (SLA) has
mainly been studied in rural context and with the population trend shifting focus on
further exploring on livelihoods and urban poverty is required afresh.
• The Asset-based approach limits itself more on asset aspects and undermines the risks
and sources of risks.
• Not much research done related to urban poverty in context of 1-5 million population
cities like Varanasi.
Owing to this aforesaid gaps this research study was undertaken which aimed to explore
further on assets that urban poor possess in cities like Varanasi, their vulnerability, sources of
livelihoods, their livelihood strategy etc.

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3. Research Methodology
The research tried to explore further into the lives and livelihoods of the urban poor. Research
questions were framed in order to understand the livelihood activities, the assets possessed, the
vulnerabilities, the livelihoods strategies of the urban poor and identify levers to alleviate urban
poverty.
Varanasi was chosen as the representative city for the study.
In Varanasi city three major slums were selected for study of livelihoods of the urban slum
dwelling households. These slums are Nagwa, pasianagali Lahartara and Shivpurwa. The three
slums were selected through purposive sampling so as to get a proper representation of bigger
slums in the city spread across geographical locations. Apart from respondents of these slums,
respondents residing in other poverty pockets were also randomly selected. The total sample size
chosen was of 100.
Next a cross sectional data was collected through intensive field work spread over three months,
in selected samples, using participatory techniques. The three tools were used for data collection
and these were household interviews using mainly open ended semi-structured schedule;
observations, Focused Group Discussions (FGD) and Key Informant Interviews (KII). Data
collected from different tools helped to triangulate the data collected.
The respondents of the personal interviews were adult members of slum dwelling households,
either male or female. Data related to their household were obtained from individual
respondents. All the interviews were conducted in natural settings mostly in place of residence of
the respondent. The FGDs were conducted in field in which the poor residing in particular slum
both male and female participated. The KIIs were conducted with people who had knowledge
about the urban poor like people from NGOs, Government etc.
The interviews thus conducted were recorded and transcribed to obtain extensive qualitative
data.The data was analysed by content analysis, case study method and pattern analysis.
Limitations
• Owing to space constraint in houses of slum dwellers, the interviews were conducted in open
with onlooker, this posed some difficulties to raise personal and sensitive issues like
domestic violence, hunger,use of contraception etc.
• No women interviewer was part of interviewing team, which meant personal questions
beyond a limit could not be asked.
• Limited time and resource were available.
• No follow-up actions were planned hence to keep the expectations of the respondents to
minimal, details beyond a limit were not taken.

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4. Key Findings and Discussions
This research aimed to explore further in to livelihoods of the urban poor. Varanasi city was
chosen as the context for this study. The manifested livelihood activities of the urban poor are
mere epitome of factors in the backdrop, which shapes their livelihoods, the way they are. These
factors which shape the livelihoods of the urban poor: their assets, their vulnerability, the
strategy they adopt etc. are even more important to understand.
Hence the field research thus conducted, in context of Varanasi city, tried to answer the research
questions, revolving around the livelihood activities and the contributing factors. The findings
thus obtained are presented as follows:
4.1. Profile of Livelihood Activities the Urban Poor:
• Urban Poor are mainly engaged as unorganised workers4
, mostly in unorganised5
sector
and this forms the major source of their livelihoods.
Field study revealed that urban poor in Varanasi are employed either as casual or as temporary
workers, in construction sector, as masons or labourers or involved in whitewashing or painting
of buildings; As waiters or helpers with marriage party caterers, getting paid something between
Rs. 225 to 350 per day. Else they work as domestic helps or cooks; as auto drivers etc. Else they
work as self-employed as Rickshaw or cart pullers, doing petty businesses, working as street
vendors, as putting up mobile food stalls, cobblers, rag picking etc. Another category of
livelihood activity of urban poor is that of working from home, on piece rate basis, engaged in
making nylon threads, cutting and packaging of piped wafers (food item), fan polishing,
tailoring, mala making etc.
4
“Unorganised workers consist of those working in the unorganised enterprises or households, excluding regular
workers with social security benefits, and the workers in the formal sector without any employment/ social security
benefits provided by the employers”. The employees with informal jobs generally do not enjoy employment security
(no protection against arbitrary dismissal) work security (no protection against accidents and illness at the work
place) and social security (maternity and health care benefits, pension, etc.) and these characteristics can be used for
identifying informal employment (NCEUS, 2007).
5
The unorganised sector consists of all unincorporated private enterprises owned by individuals or households
engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less
than ten total workers (NCEUS, 2007).

7
Referring to NCEUS (2007) definitions these unorganised workers could further be sub-
categorised as wage workers6
(includes casual7
and temporary workers, migrant workers, or
those employed by households including domestic workers); as self-employed8
workers (includes
Own Account workers9
and owners of enterprise with hired workers) and home-workers10
.
The field research revealed that of the sample drawn 97% of the total workers worked as
unorganised or informal workers while only 3% were organised workers.
Out of these unorganised workers almost 100% gained their livelihoods directly by employing
their labour, only 5% of these reported to supplement their livelihoods through alternate sources
mainly earning rent on houses and goat rearing.
This reveals that employing labour remains the only major source of gaining livelihoods for the
urban poor.
Table 4.1 gives the picture of different source of livelihood activities of these unorganised
workers in Varanasi city.
6
Wage Workers in the Unorganised Sector: Wage workers are persons employed for remuneration as unorganised
workers, directly by employers or through agencies or contractors. Wage-workers include casual and temporary
workers, migrant workers, or those employed by households including domestic workers. Wage-workers also
include regular workers in the unorganised sector (NCEUS, 2007).
7
Casual labourers: Labourers that are hired on casual basis, perhaps on some daily arrangement or for some
prescribed short duration. Casual labour is normally hired to carry out tasks that are easily amenable to observations
(Ray, 2009).
8
Self-employed in the Unorganised Sector: These are persons who operate farm or non-farm enterprises or engage
in a profession or trade, either on own account, individually or with partners, or as home-based workers. Own
account workers include unpaid family workers also (NCEUS, 2007).
9
Own account workers: who are also called own account enterprises (OAE), work as tiny enterprises often with the
help of family labour without hired workers (NCEUS, 2007).
10
ILO Home Work Convention No. 177, adopted in 1996, refers exclusively to home-workers. a home-worker is
defined as a person who carried out work for remuneration in premises of his/her choice, other than the work place
of the employer, resulting in a product or service as specified by the employer, irrespective of who provided the
equipment, material or inputs used. This is a sub-category of a broader category of home-based workers. The home-
workers fall in an intermediate position between the self-employed and the wage workers, or the employee
(NCEUS, 2007).

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Table 4.1.1 Sources of livelihoods for the urban poor in Varanasi City.
Sub-
category
Main Activities
Male
workers
Female
workers
Total
Wage-
worker
Construction Workers
( masons and labourers)
Waiters or Helpers with caterers (catering to
marriage parties),
Loading auto drivers,
Whitewashing,
Domestic Help,
Cooks,
Work in shops
49
(56)
23
(72)
72
(60)
Self-
employed
Rickshaw pulling,
Rickshaw trolley puller,
Petty shops,
Mobile food stalls,
street vending,
cobbling & shoe polish,
cloth pressing,
Renting of Rickshaws,
Rag picking,
Livestock rearing etc.
35
(40)
2
(6)
37
(31)
Home-
worker
Nylon rope making,
Cutting and Packaging piped wafers
(food item),
Mala making,
Fan polishing,
Tailoring etc.
4
(5)
7
(22)
11
(9)
Total 88 32 120
Source: Field data (N=120)
Note: Figures in parenthesis shows the percentage figures of total male workers, total female
workers and total workers respectively.
The share of livelihood sources for the urban poor households with reference to various sub-
categories of unorganised work opportunities available to them is depicted graphically in Figure
4.1.

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Figure 4.1.1 Share of livelihood activities in each sub-category of unorganised workers
Source: Field Data
Figure 4.1 depicts that the major source of livelihoods for the urban poor comes from working as
a wage worker (with a major share of casual wage labour in that). This is followed by self-
employment and working as home-workers.
If we refer to Figure 4.2 we find that both male and female workers with in their categories find
maximum livelihood opportunities in working as wage workers.
For male workers, maximum opportunity to work as wage worker comes from construction
sector. 59% of Male wage workers work in construction sector mainly as casual wage worker as
labourers or masons or else work in white washing and painting of buildings. Though relatively
the wages are better for construction workers in range of Rs. 200 to Rs. 350 per day the
availability of work is highly erratic. Most of the respondents said that they are only able to get
work for 15-20 days in a month. A statement recorded in field given by a mason aptly describes
the situation.
“On an average I get 14-15 days of work in a month, Days on which I have work, I am better off
even than a Sarkari Babu, but on days I do not get anything, my condition is worse than the
worst”.
- A Mason in Nagwa Basti of Varanasi City
Following the construction sector is the transport sector in which urban poor male workers find
work, mainly as drivers of loading auto rickshaw, as mechanics etc. 16% of the total male wage
0%
10%
20%
30%
40%
50%
60%
70%
wage worker self-employed
60%
9
Source: Field Data
the situation.
worst”.
self-employed Home-worker
31%
9%
9
Source: Field Data
the situation.
worst”.

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worker works in transport sector which is followed by working in shops, working with caterers
etc.
While engagement in transport sector and shops though temporary are less erratic in terms of
availability of work, the wages are very low. Hence there seems to be a trade-off between
availability of work and wages. More erratic work has relatively higher wages while a less erratic
work has relatively lower wages.
Figure 4.1.2 Mix of wage worker, self-employed and home-worker in male and female workers
Source: Field Data
While for urban poor female workers as well the maximum livelihood opportunities arise
working as wage workers (72% of total female workers). Out of these female wage workers 52%
are engaged as domestic helps, in well-off households, while 26% of women wage workers work
as cooks mostly in well-off households. Hence about 80% of urban poor women wage workers
gets engaged in well-off households in their localities.
These female workers engaged in households earn on an average between Rs. 1000 to Rs. 3000
per month depending on number of household they work. Their income is not that erratic but
wages are very low, on an average they work in 3-4 houses.
Further, while the wage-workers (56%) form the biggest sub-category for male workers; it is
followed by the self-employed sub-category (40% of total male workers working as self
employed workers).
The urban poor self-employed workers are mostly own account workers. The, own-account male
workers, work as cycle rickshaw pullers, the rickshaws in most of the cases are hired on rental
basis at the rate of Rs. 30 per day for eight hours. Besides lack of access of finance to buy a
0
10
20
30
40
50
60
56 %
40 %
Male Workers
10
etc.
Source: Field Data
employed workers).
5 %
Male Workers
0
10
20
30
40
50
60
70
80
72 %
6 %
Female Workers
10
etc.
Source: Field Data
employed workers).
6 %
22 %
Female Workers

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rickshaw, space constraint to keep owned rickshaw safely contributes to not owning it. Other
own account activity includes loading cycle rickshaw trolley used to transport goods with in
mandis; putting up food stalls on road side like boiled egg, omelet stalls, snacks stalls etc.
Migrants from West Bengal (mostly Muslims) who lives in temporary squatters on rented lands
mostly in slum areas, work as rag pickers and their whole family is involved in this, typically
they are bound to sell the sorted recyclable rags to the land owners who are also a player in this
recycling business subsector.
Besides these own-accounts self-employed workers involve in petty business, in street vending,
in large numbers.
While, for women workers the wage-worker (72%) sub-category is followed by home-workers
(22% of total women workers work as home workers). The women home-workers are mostly
involved in packaging of food items, tailoring, mala making etc. These women home-workers
work in their own homes producing products as specified by the employer, in general, the
material is supplied by their employers and they get paid on piece-rate basis.
Further, the field study also revealed that the traditional skills and occupations like that of
handloom weaving, making of leather shoes, chappals and other leather products; which were
the main stay livelihoods for the urban poor in the yesteryears have either phased out or in
process of phasing out.
4.2. Assets Possessed by the Urban Poor
Assets are what the poor possess. This includes both tangible and intangible assets (Moser ,
2006).
Assets have an important role in shaping up the livelihood outcomes of poor. Assets add to the
capacity of households, interact with external context and with proper interface in place give
returns by transmuting to livelihood outcomes and adding on resilience to the household.
Bebbington (1999) goes a degree further to say that “Assets are not simply resources that people
use to build livelihoods: they give them the capability11
to be and act”.
This research thus looks further into the assets possessed by the urban poor households and its
characteristics and influence it has on the lives and livelihoods of the poor.
11
Human Capability: Focuses on the ability of human beings to lead lives they have reason to value and to enhance
the substantive choices they have (Sen, Editorial: Human Capital and Human Capability, 1997).

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The assets possessed by the urban poor thus identified through the field study have been
enumerated as under:
• The Human Capital
• Intra-Household Relations
• Commitment, sincerity and sensibility12
of the female lead13
of household
• Social Relations
• Physical Assets
- House
- Mobile Phone
- Other Productive Physical Assets
These aforementioned assets thus possessed by urban poor households are being discussed as
under:
The Human Capital
The human capital is the most important asset that an urban poor household possesses. If we
refer to Section 4.1 we can see that almost 100% of the urban poor households gain their
livelihoods from directly employing or selling their labour. Further, as low as only about 5%, of
the sample urban poor households could supplement their main livelihood source, drawn by
employing their labour, by other sources like earning from rents, renting their productive assets,
selling their livestock etc.
Given its meager resource, the human capital thus becomes the key asset around which the web
of the livelihood for a poor household gets spun.
Further, this field research brought forward certain behavioral dimensions, factors intrinsic to
individuals, observed to be significantly affecting the returns on human assets apart from
traditional factors.
The two factors, thus identified are:
i. Achievement Motivation14
of individuals.
ii. Addictions of individuals.
12
Sensibility:
a. Capacity to feel;
b. Susceptibility, sensitiveness (to); delicacy of feeling (Great Encyclopaedic Dictionary, 1964).
13
Female lead here means: wife of the male household head or a female leading a household.
14
Achievement motivation has thus been defined in different ways from different perspectives; some of the
definitions of Achievement Motivation are as follows:
- A recurrent need to improve one’s past performance (McClelland 1987) [As cited in Takeuchi et al. 2012].
- “Achievement behavior is defined as behavior directed at developing or demonstrating high rather than low
ability” (Nicholls, 1984) .
- According to Atkinson and Feather (1966) “Achievement motivation is conceived as a talent disposition
which is manifested in overt striving only when the individual perceives performance as instrumental to a
sense of personal accomplishment.” As cited in (Adsul & Kamble, 2008)

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Achievement Motivation
Two cases, Box 4.2.1 and 4.2.2, drawn from field data, have been presented here, on how two
individuals having similar type skills, health and other factors may still have varying success in
terms of achieving their livelihood goals and sustaining them. This difference could be attributed
to their varying achievement motivation.
These field findings have been put forward as cases and discussed further.
Box 4.2.1 High Achievement Motivation: Case of Ramashray
Ramashray is a young and dynamic man of about 30 years of age belonging to scheduled caste
category. He resides in Pasiyana gali of Kabeer Math, Lahartara. His present family consists of
himself and a younger unmarried sister.
Presently Ramashray owns a contract for parking lot of a leading private hospital in the city. He
is also on a look out for bidding and wining contract for another parking lot in one of the city’s
prominent girl’s college. Ramashray also employs three people, on daily wages, for working in
parking lot and pays a sum of Rs. 3000 per month to the hospital. Ramashray is doing well for
himself and aims to do even better.
Life had not been this good always for Ramashray. In fact it ever remained full of challenges and
still is. Ramashray is physically handicapped as one of his legs got affected by polio. Also he lost
his mother quite early when he was still a child.
Despite of stiff challenges he never gave up and persisted for his improvement and kept raising
his bar to do better in life.
Ramashray narrates that his father was a casual labourer but did not keep in good health and died
some five years back due to lung infection. Owing to his father’s poor health and premature
death of his mother Ramashray was forced to start working at a very early age and could not
study beyond class fifth. He worked as a casual labourer for quite long and was the only earning
member of the family as his father was not in a position to work. In due course while moving on
he started working as a staff in one of the parking lots in Manduadih station. He worked there for
four years and now has taken up the entrepreneurial path and is presently self employed.
Ram says his personal expenditures are minimal and is not addicted to alcohol or any other
substance neither is he addicted to gambling like many others in his basti, he says he has to do
well in future hence he limits his personal expenses.
Stating about himself he says “I am far sited person, I kept gaining knowledge about how work is
accomplished how people progress. I worked hard and did well. I think that if I become capable
enough I can help others”.

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Box 4.2.2 Low Achievement Motivation: Case of Sharda’s husband- Lal Bahadur
Sharda, aged around 36 years, lives with her three children, her husband – Lal Bahadur, her
father-in-law, and grandmother of his husband in a slum in Sukulpura, Sarai nandan in Gandhi
Nagar area of Varanasi; Sharda’s minor sister also stays with her.
Fortunately-unfortunately she is the major bread winner for her family of eight. She works as
domestic help in neighbourhoods and earns something between Rs. 1000 to Rs. 1700 per month.
Her husband who is an able bodied skilled carpenter, is a casual worker and works only
occasionally. He is not an alcoholic nor has addiction to any other substance.
Sharda says for last two years the major responsibility of taking care of house hold lies with her.
Prior to that, she was not required to work outside. Reason being her father-in-law was active
and was working till then. He was linked to a consumer durable shop where he transported goods
on his cycle rickshaw trolley. He earned Rs. 150 to Rs. 200 each day which was sufficient for the
family.
Sharda says the problem started once he left the work due to his age. Her husband was not
regular at work however this did not deter his demands. There remained shortage of food in the
house and this led to fights. After all these Sharda took it to herself and decided to get out and
start working for addressing the needs of her children. Things are better now, her two sons study
in a private school and she is lucky that she has to bear the fees of only one child as the fees of
her elder son is borne by a local NGO Dakhsa Bharti.
Things would have had definitely been much better, had her husband shown more desire to work
and support their family. Speaking of him she says that “I would have been more than happy had
he would have had contributed even a little, regularly, but that is not to be! He last worked a
month back, that too when I asked him how am I going to do Chatta Puja without money? He
then worked for 10-12 days and gave me Rs. 1000; then since he is sitting idle. He sees his wife
is running around so why shall he bother to take pain?”
Sharda adds “If he wants what he cannot do? He is not a woman that he needs to find work
within four houses of neighborhood. He is free to undertake any work. If he wants he can work
as casual labourer in construction sites. But Alas! God knows why he does not have that sense!
If we compare the two cases of Ramashray and Lal Bahadur we can see that though the condition
of Ramashray was much more challenging in all aspects still he moved forward by his
achievement motivation and has relatively done much better despite of his physical handicap
than Lal Bahadur. While Lal Bahadur unlike Ramashray he is physically fit, his father also
supported him much more than support Ramashray could get, his wife is also supportive, he has
skill of a carpenter still he lacks that motivation to achieve more than what he has and what he

15
could. Hence achievement motivation is an intrinsic factor which would play a role in getting
returns on this very important asset of poor households – The Human Capital.
Addiction
Another intrinsic factor which impacts the human capital negatively and is widely observable in
urban slums is addiction.
“ Addiction is a condition that results when a person ingests a substance (e.g., alcohol, cocaine,
nicotine) or engages in an activity (e.g., gambling) that can be pleasurable but the continued
use/act of which becomes compulsive and interferes with ordinary life responsibilities, such as
work, relationships, or health. Users may not be aware that their behavior is out of control and
causing problems for themselves and others” (Psychology Today, 2014).
Many poor households in urban slums of Varanasi face the consequences of substance abuse
disorders and other addiction like gambling of their family members.
These addictions not only impacts the human capital adversely and diminishes the return on this
asset but also adversely affects other assets like intra-household relations and depletes social
relations; leads to other prevalent problems like domestic violence, not willing to go to work
regularly, deterioration in health or even death of addicts of substance abuse like alcohol, drugs,
tobacco etc.
Thereby it further reduces the resilience of these urban poor households and makes them more
vulnerable to different risks.
The most common and often most damaging substance abuse disorders results from alcohol
abuse and dependence and further on abuse and dependence on drugs like Ganja
(Cannabis/Marijuana) and Bhang (Cannabis/Hemp). In addition to these gambling is also widely
prevalent addiction. Mentioned addictions are mostly observed in adult men and in adolescent
boys. The behavioural disorders out of these addictions also lead to other prevalent problems like
domestic violence, not willing to go to work regularly etc. Also the negative health implications
of substance abuse like alcohol, drugs are well understood.
Box 4.2.3 presents a case in which addiction diminishes returns on human capital and produces
other complexities making the household vulnerable.

16
Box 4.2.3 Addiction affecting returns on Human Capital: Case of Sarita Devi
Sarita Devi is around 30 years old and stays with her two children and husband in pasiana gali,
near Kabeer math in Laharta area of Varanasi. Husband of Sarita is a casual laborer and works
on daily wages in construction sites in the city. Sarita also worked earlier as a domestic help but
she had to leave that work as her children are quite young and needs to be attended personally by
her as she fears that there is a risk of accident for them if they get to busy Varanasi-Allahabad
road which is quite close to their house. Hence Sarita’s husband remains the sole bread winner
for the family. The family lives in their own one room semipucca house.
With a decent wage rate and boom in construction activities in the city and a small family to
support ideally things ought not to be that difficult for the family. However, unfortunately for
Sarita and her children it is not so. Their income is less and highly erratic.
Sarita says about her husband “Sometimes he goes to work sometimes not. It could be 10-20
days without work when I start quarreling then he moves. Today he has gone to look for some
work, let me see if he gets some work, yesterday he returned back without work. Today, till now
he is now not back…”
On further enquiry about this irresponsible behaviour it was learnt that Sarita’s husband is
addicted to Ganja (Marijuana/ Cannabis).
Not only Saritas husband is reluctant to work and his income is low and erratic but also wastes a
good chunk of his income on addiction.
Due to this the family is pushed to the limit of bearing the trauma of going through hunger. A
visibly distressed Sarita admits that they do face situations when they have nothing to eat hunger,
with stigma say “Yes, scarcity is there, you can see my child is forced to eat dry roti (chapatti)
and salt, problem is there but what to do…? If I say this to someone, people would make fun of
me. Even If someone gives food they will taunt on us. Whom to share this helplessness with…?”
Thus we see that in this case addiction has not only diminished returns on this otherwise
productive human capital of family head but also weakened the intra-household relations and
social relations.
Intra-Household Relations
Better the relationship between different members of the household better the cohesion and
synergy. In urban context this asset gains even further importance as the urban poor settlements
are, in general, socially fragmented15
. Though social relations still remains an important asset
even for urban poor households (discussed later).
15
Social Fragmentation: “The vulnerability of urban dwellers may also be high because community and inter-
household mechanisms for social security are less likely to operate in urban than in rural areas.” (Moser, Gatehouse,
& Garcia, 1996).

17
Ceterius Paribus, A household in which intra-household relations are good are expected to be
more cohesive. Working in unison they are expected to achieve synergy and draw benefits of
achieving synergy.
Such households are expected to leverage better returns on their other assets as well thus
increasing their capabilities and further improving upon their chances of achieving livelihood
goals, in comparison to those households which do not have good intra-household relations.
Also a household having a good intra-household relation would have a higher resilience. That is
by staying together as a unit they gain capacity to cope up with risks in a better way as compared
to households with poor intra-household relations. the most important asset of the household-
labour of lead male member(s) (discussed later in detail).
To highlight the importance of intra-household relations, case of Binda Devi is presented in Box
4.2.4 presents case of Binda Devi which shows how a good intra-household relation can increase
the returns on meager assets a poor household has and also strengthen other assets of the
household.
Box 4.2.4 Intra-Household Relations - Case of Binda Devi
Binda Devi is around 40 years old and she lives in Nagwa slum of Varanasi city along with her
husband and three children. They reside in a small pucca house of their own. Binda is a
housewife and her husband works as a temporary worker in a cycle rickshaw repair workshop
where he does repair works and mends puncture for cycle rickshaws. The family belongs to
Scheduled Caste category.
Despite of their limitations the family seems to be progressing well by working in synergy. This
is reflected in the trust and achievements of the family in securing their livelihood and making
conscious efforts for strengthening their assets.
One of the major reasons for this positive leap of the family could be attributed to their good
intra-household relation. A good intra-household relation also leverages other assets which
possess and this result into getting a good overall return on assets possessed by the family.
Binda Devi while talking about her husband she says that “He works hard, goes to work daily.
Leaves for work at 8 in the morning and comes for lunch at 2, goes again at 3 and comes back at
8 PM.
Work is available to him on a regular basis, and he takes no holidays and goes to work for all 30
days. He earns something between Rs. 3000 to Rs. 4000 per month; and in any case he brings
home not less than Rs. 3000 per month”.

18
Case of Binda Devi Contd…
The environment of the household is amicable; there is no problem of addiction. Binda says her
husband is not addicted to either alcohol or any other substance. They do not quarrel too much
nor is there any problem of domestic violence.
On the issue of educating their children Binda affirms “Yes, will educate them to the point we
are capable. My husband had no options but to work with hammer, repair punctures etc. will not
let children do that, now what happens ahead is Gods wish”. All the three children study in
Mahamana Madhyamik School in the city. The family spends Rs. 950 in school fees per month.
The family has unfortunately been left out of BPL list of Food and Civil supplies of Govt. of U.P
and hence is not a beneficiary of TPDS (Targeted Public Distribution System) scheme. However
the family has been successful in mobilising its social relations, more particularly its kinship
network, to its benefit. Binda Devi says “Though we are poor, my brothers in Bihar are relatively
well-off, they are farmers and they give us Rice and wheat for our consumption. My Sister is
also in good condition, she helps me financially and otherwise”.
Commitment, sincerity and sensibility16
of the female lead17
of household
There is overwhelming evidence from the field observations that the Commitment and sincerity
of the female lead of household towards her children and family is one of the strongest binding
forces which binds a poor household as a unit, and is an asset for an urban poor household, while
her sensibility towards handling relations inside and outside her family helps to build intra-
household relations and social relations for the household.
This has been observed as one of the most consistent asset with any poor household where
female lead is present. This vital intangible asset of urban poor households has not been properly
acknowledged in the literature.
To help understand this; a case of a female household head Manju; which despite of loss of her
husband and multiple vulnerabilities is committed to support her children and take them out of
all odds. This case has been enumerated as Box 4.2.5
16 Sensibility:
c. Capacity to feel;
d. Susceptibility, sensitiveness (to); delicacy of feeling (Great Encyclopaedic Dictionary, 1964).
17
Female lead here means: wife of the male household head or a female leading a household.

19
Box 4.2.5 Commitment and sincerity of the female lead of household – Case of Manju Devi
Manju Devi, aged around 40 yrs heads her family of five children; 3 sons and 2 daughters, the
eldest child is 15 years old son and the youngest child is 6 years old daughter. The household
belongs to Scheduled Caste category.
The family is still in agony of losing its head, three months back, owing to his liver and kidney
ailment. Manju’s husband worked as a mason.
Presently, Manju with her 5 children stays at her mother’s house in Nagwa, Varanasi along with
families of her two married brothers and a sister. Manju with her family has permanently shifted
to this place. She narrates:
“My husband’s house is in chitaipur, Varanasi, my mother-in-law happened to be a step mother
to my husband, her behavior was too hostile and I could not adjust there. Taking note of this, my
father, who was then alive, brought us back, now unfortunately he also has passed away …”
Loss of her husband, major contributor to household’s income and loss of control on one of
the most important physical asset- her house at her husband’s place, has left her and her
children at loss.
After passing away of her husband Manju is the lone bread earner for her family of six. She
works as a domestic help and earns Rs. 2000 per month. Also she puts up a mobile stall (thela) to
sell boiled eggs, Omelets etc. during the evening time. On an average she earns Rs. 50 per day
out of this.
She says “I do not bother my son too much so that he can concentrate on his studies”.
Her children goes to school, the eldest son is a student of class 9th
in a private school where she
needs to pay a fees of Rs. 300 per month. Her youngest daughter goes to Anganwadi.
Her other three children are supported for education by a faith based NGO Ashray Charitable
(Christian Missionary), which gives free primary education and supports further in getting
admissions in other schools and paying their fees till class twelve.
When asked about her future plans Manju replies with a deep sigh, “Will have to do something
or else condition for begging will come, presently only three months have passed away, my
husband died; let me see ..., I wish I could get some better work, through which I can take proper
care of my children...”

20
Social Relations: An asset for urban poor households
Though as compared to the rural, the urban settlements are rather socially fragmented
nonetheless, social relations still is one of the biggest assets of the urban poor. It is this safety net
on which they fall upon at time of crisis and also draw security to reduce their vulnerabilities to
several risks.
In the studied context, and also in general, unfortunately not many institutions and outside
interventions are poor-friendly. This limits the access of the urban poor to these institutions and
its benefits. Hence at the time of requirement it is their social relationship networks, in which
they have invested, comes to their support, more often than not. It is interesting to note here that,
in same community, two households may have very different quality and quantity to this asset. It
would depend on household’s own conduct and its investment in such relations.
In urban context, this asset may include relations with close friends and relatives, neighbouhood
and community people, employers of household members, and their society at large.
Though it would not be right to rank different categories of social relations18
on basis of their
importance, as on different occasions different category of the mentioned categories can come
handy. However, the field observation suggests that the network of close friends and relatives, in
general, are the most reliable and exploited network on which an individuals and household can
falls upon.
In Figure 4.2.2, an attempt has been made to visually represent the discussed social relations as
an asset. If we consider an individual to be the unit the first safety net for him is his family,
followed by that there are multiple layers of social networks for him which could act as his
safety net at the time of crisis depending on his claims on these networks which in turn would
depend on his own capability, accesses to these and investment made on these relations and
networks.
18 Categories of social relations: Categorised here for convenience as relations with close friends and
relatives, neighbours and community people, employers of household members, and their society at
large.
“How can I say that help is not required? When I have nothing, I will take something from others to
feed my family and myself. I take help from my neighbours and return back to them after earning from
work. This is a mutual thing, when he requires, I will help, when I need he will help, if my neighbour
has nothing to eat and is forced to remain hungry; this is not going to happen…; if he does not have… I
will support him, if there is no money with me as well; will get them food from my house. I will not
watch remaining idle, my neighbour sleep empty stomach”.
Shyama, Mason, Nagwa Slum, Varanasi

21
Box 4.2.6 The Free Lunch: Case of Collateral-Security Free Loans from MFIs
That ‘elusive Free Lunch’ is every one’s desire; easiest to fantasise, so very difficult to get…
One such elusive free lunch for urban poor has been the idea to get collateral-security free loan,
which would solve so many problems for them!
Traditional main stream financial institutions and banks, in general, give loan against mortgage
of some physical assets or against assets which could easily be liquidated to cash. In want of
such assets, formal banking and financial institutions have largely remained inaccessible to poor.
Several Government schemes, by undertaking guarantee on behalf of poor, have promised
delivering that elusive free lunch (collateral free loan); but its inherent cumbersome processes,
delays, corruption, and institutional insensitivity have ensured that this elusive free lunch for
poor remains eluded forever.
Figure 4.2.1 : Visual Representation of Social Relations as an Asset
Source: Author’s creation based on field data
To further validate Commitment, sincerity and sensibility of the female lead of household and
Social Relations as an asset of urban poor households another case – “The Free Lunch: Case of
Collateral-Security Free Loans from MFIs” is presented in Box 4.2.6
21
Society at large
Employer
Neighbours and
Community People
Close Friends &
Relatives
Family
Individual
21

22
Free Lunch: Case of Collateral-Security Free Loans from MFIs contd...
However this Micro Finance Institutions (MFIs), with its advent turned the problem on its head.
Their processes are more poor-friendly, instead of the poor coming to them MFIs reach on to
them, keep that ‘intimidating paper work’ to the minimal, form groups of women and give them
‘collateral free loans’, to be repaid in relatively easier installment and what not! Further to make
it more mystical, even the fears of traditional banking institutions that loans without collateral
security would end up as bad loans, have also not come true for MFIs. MFIs enjoy much better
repayment rate than traditional banking and financial institutions; resulting into healthy profits
for them.
So has that ‘elusive free lunch’ of ‘collateral free loans’ been finally delivered to the poor?
The age old wisdom says, there is no such thing as a free lunch and the idea of getting something
for nothing is bond to remain elusive ever!
So then what is that which these MFIs are holding as collateral security? Definitely not physical
assets! Then what?
If we take a deeper look into lending criteria of MFIs; as a case for that matter, of MFIs
operational in Varanasi city, we find the following:
MFIs here,
• Lend only to women and not to men
• Of women in a locality, lend only to those women, who are permanent residents of that place
and have a house of their own.
• Lend not singly but in group, the women members of the group must be known to each other
and would be from same locality.
• Unmarried women cannot be part of this group.
• If a women borrower of the group defaults on repayment, then the entire group would be
penalized for that.
An analysis of the aforementioned lending criteria indicates that MFIs have been much smarter
than traditional lending institutions. They have identified and have held two intangible assets of a
borrower’s household as collateral security against lending made. These assets are:
a. Social relations of the household
b. Sensibility of the women-lead towards social relations.
Social relations are much worthy an asset for a poor household to be lost. Sensibility and
sensitivity of women-lead, who is directly accountable for mortgaging this valuable intangible
asset of the household- the social relations, would leave no stones unturned to protect and further
grow it. No wonder the repayment rates are extraordinary for MFIs!

23
Physical Assets
The key physical assets possessed by poor households in Varanasi city are as follows:
Housing
House is one of the biggest assets any urban poor household can own. Though it is very difficult
for urban poor households to buy property in urban locations owing to their meager incomes and
high price levels, yet poor households which are original inhabitants of a place or would have
settled much earlier on Government lands and later on the land titles got transferred in their
names do own small land and house titles of their own.
The context of Varanasi is bit different as the sample statistics suggests that 87 % of the poor
households do have legal rights on their land and houses. The reason which could be attributed to
majority of urban poor households possessing house and land titles here in Varanasi is that the
present-day slums were once villages19
which have got engulfed by expanding city and that the
majority of present day slum dwellers are original inhabitants of this place.; this could well be a
representative case for similar cities. However owing to ever escalating property rates many have
sold their land and house and have left the place and those who remain, remains vulnerable to the
temptation to sell off their property and get a wholesome amount in return.
Though the houses in which the poor reside are mostly semi-pucca or pucca, their conditions are
not good in general, most of these are single room houses, which is very small in size, has no
cross ventilations, no proper flooring, no space to accommodate toilets, no running water facility
and many a times are in a dilapidated condition20
; still owning a house is worth an asset to have
as this adds to resilience of households which results in reducing their vulnerability to a great
extent.
The house not only is an productive physical asset which may give an option of earning rent to
the owners or carrying out any economic activity in its premises; but also even if earning rent
19
The slums being villages in the past is acknowledge during the key Informant Interviews (KII) and Focussed
Group Discussions (FGDs) with elder members and also is reflected in the names of many slums which carry a
name Purwa towards the end, like Shiv Purwa the term purwa in local language means village and also this
information is supported by the fact that still the inhabitants of the slum refer their slums as village in their
discussions and conversations and also the settlement pattern shows settlement of mostly same caste households in
entire slum.
20
Field observation suggests that many of the poor households have got benefitted from state Government’s low
cost housing schemes. Mainly houses built under Kansi Ram Awas yojna were seen wherein the beneficiaries were
required to payback a sum of Rs. 17,400 in installments of Rs. 500 once the pucca house was complete. However
the beneficiaries of this scheme complained about the poor quality of construction done under the scheme.

24
from this asset is not possible it saves rent for the owners which they would have paid otherwise
in absence of this asset but also it strengthens the identity21
of asset owners.
The urban poor households which have house of their own would continue to reside in the same
locality for a very long period which means they get an opportunity to build social relations
which is one of the key assets and more often than not is the only safety net for the poor. Also
being a permanent resident of place would mean that it would open up door for undertaking other
economic activities like home-based business. It is learnt from field interviews that in home-
based business generally the raw material is provided by the business owners subcontracting
their work and that the raw material is generally provided on trust which means that there is a
great likelihood that preference would be given to permanent residents as compared to people
residing as tenants. Also there are other occupations like driving where preference would be
given to local permanent residents over those who may migrate at very short notice. Also this
privilege of being a permanent resident paves way and makes it relatively easier to draw many
other institutional supports like accessing Government’s social security schemes such as low cost
housing scheme, Targeted Public Distribution System (TPDS), old age pension scheme or
unemployment allowance, etc. Also it makes the household eligible for getting a loan from a
Micro Finance Institution (MFI). Also it makes it easier to get the benefit of other Government
schemes like or getting listed in voter list or opening up of a bank account and much more.
Mobile Phone
Mobile phone as an asset of poor looks rather unusual. However with the turn of the millennium
this is one of the most powerful Information and Communication Technology (ICT) tool which
the urban poor has got access to.
Availability of low cost handsets combined with low cost pre-paid schemes by service providers,
starting as low as recharge vouchers of Rs. 5 onward, has made mobile phones accessible to
urban poor.
The field study revealed that mobile phones are increasingly being used by urban poor men and
women and has achieved a good penetration within the urban poor households in the city. As per
the sample statistics, as high as 97% of the households have at least one or more mobile phones.
The rapid growth and high penetration of mobile phones in India, in general and specifically in
urban locations are also revealed by secondary data.
21
Identity: The distinctive characteristic of a person’s character or the character of a group which relate to who they
are and what is meaningful to them. Some of the main sources of identity include gender, nationality or ethnicity,
social class. (NCERT, 2006)

25
Telecom Regulatory Authority of India (TRAI , 2014) in its latest press release on Telecom
Subscription Data stated that there were 935 Million wireless telephone subscribers in India as
on 31 October 2014 of which 549 Million (59% of the total) were urban subscribers which is
growing further at a monthly growth rate of 0.20% . While the urban Tele-density22
for wireless
phones was 142.44.
Also as per Ericsson Mobility Report (2014) for the first time, India has overtaken China in net
addition of mobile subscribers. In January to March quarter of 2014 India added 28 million
mobile users, while China’s subscriber base increased only by 19 million (Ericsson, 2014).
Not only mobile phones are the most powerful tool for communication and to remain connected
but also it is increasingly being used as an entertainment device. Through mobile phones FM
radio can be tuned-in; also at low cost the memory chip can be loaded and re-loaded with videos,
audios, pictures and what not; also internet could also be accessed through phones.
However above all, possession and usage of mobile phones by poor is a big leap forward made
by them in the ICT world and thereby they are progressing in the right direction to ensure that
they don’t lag behind in this digital and add to their vulnerability by being victim of digital
divide.
Already experimentations are being done in the direction of enabling poor through in-time
information dissemination and other interventions using mobile phones which would result in
bringing more transparency and information sharing efficiencies related to be it governance or
markets.
Also facilities of mobile-money transfers, added by all leading service providers like Airtel’s
Airtel money or Vodafone’s m-Pesa or Idea’s Idea money etc. have definitely added an
innovative financial channel which is expected to benefit the poor as well.
Other Productive Physical Assets
Many urban poor households also possess physical assets like Thela23
/ Cycle Rickshaw/ Cycle
carts etc. this gives an option of availing livelihoods through these assets or renting it out.
Also few households rear livestock, especially goats. The herd size is very small (1-3) and this
asset is looked upon more as an asset which can be easily liquidated at the time of crisis. The
herd size is kept small due to space constraint and also to lower the opportunity cost of rearing
goats, such that the available goat gets fed by kitchen waster and by self grazing and manpower
is not consumed for that.
22
Tele-density is a measurement of how many telephones are available, expressed as the number of telephone lines
for every 100 people in a country (Macmillan Publishers Limited, 2009)
23
Thela: Four wheeled hand cart

26
4.3. Vulnerability of the Urban Poor
“Shocks keep coming always”.
An elderly man, Lahartara, Varanasi
The aforementioned statement by a respondent in field interview suitably states how
vulnerability is an integral part of an urban poor household. The urban poor households live and
survive in an environment which is dynamic and ever changing, thus posing new challenges and
presenting new opportunities to them. In this process of synchronisation and adjustments of
households to their contexts they are confronted with multiple risks and shocks. The households
remain vulnerable to these risks and shocks; further, there are internal and external factors which
affect the vulnerability of households to these risks and shocks they are exposed to.
Major factors which have its bearing on the vulnerability of the urban poor households are the
internal capacity 24
of the household and the intensity and risks and shocks to which the
household is exposed to.
Lower the capacity of the household higher the vulnerability of the household and vice-versa.
While the vulnerability to risks would depend on exposure to the risk and how effectively the
risk has been managed. Higher the magnitude and exposure to risk more vulnerable the
household would be and more ineffective the risk management more vulnerable the household
would be.
Also institutions (Social, Non-Govt. & Govt.) have a role to play more poor friendly and
efficient the institutions it would add to the resilience of the households.
The terms related to risk and vulnerability has been used with difference in literature. To avoid
confusion the definitions and the meaning of these terms for the purpose of this thesis is being
adopted from “World Development Report 2014: Risk and Opportunity—Managing Risk for
Development”.
Table 4.3.1 presents the meaning of important terms related to Risk Management.
24
Capacity: Used in this thesis in context of individual household’s capacity to build and protect their livelihoods.
Thus could be defined as: “The combination of all the strengths, attributes and resources available within a
household that can be used to achieve agreed goals” Adopted from (UNISDR, 2009).

27
Table 4.3.1 Risk Terminology
Risk The possibility of loss. It can be imposed from outside or taken on voluntarily in
the pursuit of opportunities.
Shock A change in the world that may be positive or negative that may occur gradually or
suddenly.
Vulnerability A high susceptibility to loss from negative shocks resulting from a systems
exposure, internal conditions and risk management.
Resilience The ability of a person or system to recover from negative shocks while retaining
or improving their functioning.
Risk Management The process that involves confronting risks, preparing for them (ex ante risk
management) and coping with their effects (ex post risk management).
Systemic Risk Risk that is common to most members of an entire system.
Idiosyncratic Risk Risk that is specific to some members of a system.
Source: The World Bank. (2013). World Development Report 2014: Risk and Opportunity -
Managing Risk for Development. Washington D.C.
Vulnerability Profile of the Urban Poor Households in Varanasi City
By analyzing the pattern and implying case study method of qualitative data obtained through
field research a vulnerability profile of urban poor has been drawn. By vulnerability profile, it is
meant here, risks and shocks to which the urban poor households are exposed to; the external and
internal factors: which exposes the urban poor households to these risks and shocks; the internal
factors depleting the capacity of the households making them further susceptible to the risks and
shocks to which they are exposed to, the impact of risks not managed well, making the
household further vulnerable.
The vulnerability profile of urban poor households has been presented here in form of Tables
4.3.2 to 4.3.4.

28
Table 4.3.2 Shocks faced by the Urban Poor Households.
Shocks faced
by HHs
Description
Health
shocks
One of the biggest shocks faced by urban poor households. Health shock could be
idiosyncratic or covariate and may result from many factors including a pandemic,
hazardous environment, occupational hazard, accidents, seasonality etc. A health shock
could lead to premature death, chronic Illness, permanent disability, temporary disability
etc.
Income
Shocks
Income shock is one of the biggest shocks that an urban poor household face. Income shock
can occur due to many factors like health shocks, death of an unavailability of work,
seasonality, etc.
Weather
shocks
Flooding in low lying areas due to excess rains ; water logging in rainy season due poor
drainage; Heat Stress; work not available due to seasonality
Food
Inflation
Rising food prices
Other Violence, threat or nuisance by Gangs; Theft etc.
Table 4.3.3 Exposure to systemic inefficiencies leading to increased vulnerability
Shocks having roots in systemic inefficiencies
Markets
Income Shocks
having roots in Labour
Markets
Poor terms of
trade
Poor terms of trade leading to low wages despite of
working hard, owing to labour market imperfections .
Unavailability
of regular
work
Unavailability of work in organised sector.
Unorganised workers like casual workers like mason or
a labourers survive on daily basis if work is not
available to them regularly this leads to Erratic
Income and even if the wages have improved the
overall income remains low depending on the
frequency of availability of work.
Missing Markets for Poor
Financial
Services
market
Non-existent formal banking channels providing
savings, credits etc., focusing on the needs poor.
Insurance
Market
Missing Market
Other markets
like housing
Missing Market

29
Shocks having roots in systemic inefficienciesPublicSystems
Corruption
Corruption of Govt. authorities robbing of the potential benefits of
Govt. schemes and benefits due to the poor
Unplanned Growth
Unplanned
Settlements
Poor generally settle down in discarded areas- low
lying, besides open polluted drains etc. also they
remain outside the ambit of urban planning there by
missing out its benefit. This mushroomed squatter
settlements on discarded lands, very close to
settlements to roads etc. leads to multiple hazards.
Lack of basic
amenities
Lack of basic amenities like water, drainage, toilets,
electricity adds to stress, consumes valuable time &
energy and increased risk of diseases.
Improper Waste
Management
Polluted
Open Rain
Water Drains
Open rainwater drains polluted through unauthorised
discharge of domestic and industrial solid and liquid
wastes; waste water logging due to lack of proper
drainage
Solid waste
Pollution solid waste dumping .pollution owing to
garbage dumping and lack of cleanliness
Environmental pollution Climate change, Air pollution, noise etc. beyond safe limits.
SocialSystems
Girl's Marriage
Getting Daughter or sister married is a huge economic and social
liability on head of the family owing. Economic cost is owing to
prevalence of dowry system and could leave the household in huge
indebtedness.
Shradh
The surviving heir has to feed people and give away dans (donations);
for poor this could be huge economic cost and could lead to
indebtedness.
Maintaining Kinship &
festivals
Maintaining kinship network is important to maintain the social
relations. Expenditures like giving gifts in marriages of relatives,
helping relatives at time of need etc. Also expenditures on food, cloth
etc. during festivals.
Social Liabilities creating shocks for households: Though it withers the household of
economic assets and may end up in dragging the household in indebt it adds positively to the
social relations of the household and keeps it alive in the social network.
Table 4.3.4 presents impact of risks not managed effectively resulting in turn into further
weakening the capacity of the households making them more vulnerable to several risks &
shocks.

30
Table 4.3.4 Impacts of risks not managed effectively
Impact of Shocks
not managed
effectively
Description
Death- Loss of
human asset
Human capital is one of the biggest assets with the urban poor households and
premature death of family members specially earning members due to health shocks
or accident is catastrophic and could have devastating effect on the household.
Sale of Physical
Assets
Many a times in order to cope-up with some shock the poor household may end-up
losing some key assets like selling their house or other liquid assets like gold or
mortgaging gold and not able to pay the debts and loosing the collateral. These may
help in at that instant to cope up with the shock but in long run makes the household
even more vulnerable.
Income Related
Erratic Income
Shock like unavailability of regular work or loss of job or other idiosyncratic
factors like health shocks, or alcoholism or low achievement -motivation etc. could
lead to Erratic income and ultimately to low income.
Low Income
Low wages owing to poor terms of trade and market imperfections could lead to low
income.
Savings & Investment Related
Low / No
Savings
Low income compounded with addictions and unavailability of banking services of
poor friendly saving schemes would end up in to No savings/ Low savings urban
poor households.
Inability to invest
Inability to keep investing in human capital continually beyond the bare minimum,
limits the quality and quantity of the returns on this very important asset of the urban
poor, example not able to pursue studies despite of wish to continue.
This is also the case for other assets as well. And this is linked to low savings and
hence low capital formation.
Coping mechanisms of the poor running the risk of deepening the vulnerability
Indebtedness
Taking debts is one of the most effective coping strategy for the poor. However it
may also at times endup making the household more vulnerable as due to their
limited capacity the household may remain regularly under debt; loosing potential
savings in paying interests for of debt and also they would be in risk of falling into
debt trap.
Sale of Physical
Assets
Many a times in order to cope-up with some shock the poor household may end-up
losing some key assets like selling their house or other liquid assets like gold or
mortgaging gold and not able to pay the debts and loosing the collateral. These may
help in at that instant to cope up with the shock but in long run makes the household
even more vulnerable.
Other Impacts
Poor Intra-
Household
Relations
Poor Household Relations, lack of trust resulting into the family not working as a unit
Poor Social
Relations
Poor Social Relations resulting in weakening the most reliable safety net for any poor
household thus makes the household further vulnerable to risks and shocks.
Food Scarcity
Food Scarcity at household level is one of the bottom-line impacts of overlapping
vulnerabilities towards many shocks and impacts of shocks like Food inflation, low
income, erratic income etc.

31
4.4. Livelihood Strategies of the Urban Poor Households
“Will keep my family small… one child (family) is small”.
A Muslim street vendor (An expecting Father), Varanasi
“Do not need any more children. I pray, even if I am able to make my children live, feed and
educate, I am satisfied, giving birth to a child is not enough, cost of living is going up,
arrangements for feeding and educating them is required. Want only that many children which
we can nurture”.
A construction worker in Nagwa Slum, Varanasi
(Who lost his young child of disease)
In literature livelihood strategy has been defined as:
“A Range and combination of activities and choices that people make/undertake in order to
achieve their livelihood goals (including productive activities, investment strategies,
reproductive choices, etc.)” (DFID, 1999).
Drawing from Sen’s capability approach and from definition of strategy given by Michel Porter,
the Strategic Management Guru (Porter, 1996), an alternate definition of Livelihood strategy
adopted by households has been put up as:
“Expanding Human Capability25
, choosing different set of activities”
Thus, implicit in an effective livelihood strategy of a household is planning and undertaking
activities to build and enhance its capability. A Livelihood Strategy is essentially something
which is more proactive and not reactive. It is not a coping mechanism but rather a well thought
off action in advance.
25
Human Capability: Focuses on the ability of human beings to lead lives they have reason to value and to enhance
the substantive choices they have (Sen, Editorial: Human Capital and Human Capability, 1997).

32
The field research revealed that:
 Investing in its Human Capital is a definite livelihood strategy being adopted by the urban
poor households.
Three parameters looked into were Family size, Vaccination of young children and sending
children to school. It was revealed that the urban poor households are:
- Limiting their family sizes.
- Vaccinating their young children.
- Sending children to schools (Pvt. Schools preferred over Govt. schools to get a better
quality of education).

33
5. Conclusion and Recommendations
Revisiting one of the basic questions: Where does the lever to alleviate urban poverty lie? This
research comes to a conclusion that there is no one masterstroke which can remove the urban
poverty, reduce vulnerability of the poor, improve upon their livelihoods etc. but instead we have
to look for many small actions or levers which can strengthen the assets of the poor and add to
their capacity and hence to their resilience. Also, helping gain access to present institutions
(including markets) and developing poor friendly institutions (both formal and informal) are
required as a good institution can act an interface which can increase the returns on the assets of
the urban poor households, when they interact with these institutions, to get transmuted to
livelihood outcomes. Together, high quality and quantity of assts and access to institutions could
be effective in reducing the vulnerability of the urban poor households.
Also, identification of these aforesaid small levers alleviate poverty could be very contextual,
and hence any urban poverty alleviation programme should definitely take in to account the
contextual requirements based on proper study.
Recommendations:
The recommendations of this research revolves around strengthening of assets, improving access
to institutions and developing poor friendly institutions26
and initiatives to improve upon the
Returns on Assets of the poor, mitigate their risks and reducing their vulnerability. The
recommendations of this research are as follows:
 Adding on new skills for Wage improvement
Providing incentives and facilitating for profit social enterprises to establish skill training centres
or opening up of such centres through Government interventions. The vocation and curriculum
should be market guided and should have placement facility. Examples of such skill training
centres are:
- Opening up of Mason’s Training Centre:
Presently there is no formal intervention through which a construction labourer can
make a transition from labourer to become mason. The difference in the wages of a
labourer and a mason is 75%. Hence mason training centre should be started. The
trainee should get stipend equal to daily wages of a casual labourer.
26
Poor friendly institutions here means fulfilling of 2 conditions:
a) The systems and subsystems should be one which is aligned to the habits of the poor.
b) The poor should be at the core of activities and functioning.

34
- Keeping in mind tourism industry: Driving schools, Waiters and chef training
centres, certified guides, sculpturing etc.
- Other vocational skill training centres for producing quality Electrician, plumbers,
painter (as private construction sector is in boom); smart phone repair and handling
training etc.
 Providing spring board facility for self employed and small enterprises
- Recognising the services of poor self employed (like street vendors, rickshaw pullers,
petty shop owners etc.) and home-workers, giving them recognisation (like id cards
etc.) and support for their sustenance and growth instead of considering them of
nuisance and leaving them out of any planning initiatives.
- Providing access to cash credit to these self employed and home-workers through
collateral free cash credit card. The risk of credit schemes could be covered by
SIDBI.
 Providing motivation training to adolescent and youths
- Interaction with successful people with similar background.
- Achievement motivation training, could be integrated with skill training courses.
 Improving access to formal job markets
Cases from the fields suggests that getting employed as a organised workers can helps
a poor household to break the poverty cycle, though in the present context access to
such job markets are difficult. It cannot be ruled out that there are more number of
poor in scheduled castes and that Govt. gives special quota to SCs which remains
unfilled many a times.
- Coaching to get govt. jobs, organised private jobs. Instead of opening up of coaching
centres, providing loans /reimbursing coaching expenditure receipts.
 Financial Capital Strengthening
Interventions to be made through MFIs as their process procedures are more suited to poor.
- Giving consumption loans.
- Giving productive assets in loan by hypothecating the asset itself.
- Promoting daily collection saving schemes through door to door collections through
MFIs/ Regional Rural Banks/ Scheduled Commercial Banks. Starting erratic saving
schemes, through mobile vans in same line as mobile ATMs. Time and location of
such vans identified and regular. Working like a mobile bank.

35
 Risk Mitigation
- Improve the penetration, effectiveness and success of Rastriya Swasth Bima Yojna
(RSBY).
- 100% coverage of subsidized housing schemes for all urban poor.
- TPDS is a big help to the poor as it reduces the vulnerability of most poor HHs, better
targeting required, so that the eligible are not left out, multiple parameters should be
defined and identification to be done in a participatory way involving ULBs.
- Premium free life insurance all adults from age 18-60 Yrs.
- In the same way as MFI runs on a business model, low cost quality housing should be
facilitated, there are existent Govt. schemes for housing but selection of beneficiary is
not a robust one, corruption and quality a big concern. Benefits flows to those
politically aligned. With change of Govts, the schemes drop dead, like Kanshi ram
awas yojna.
 Improving upon Household relationship
- Sensitisation and strengthening of laws related to domestic violence.
- Family counseling centre.
- De-addiction centres.

36
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