Poverty | Poverty Line | Causes | Poverty Alleviation Program | Chapter 7 |
Poverty and Poor
Poverty refers to the inability in which a person is not able to fulfill his minimum basic requirement of life like food, cloth, house, education and health care facility. As a result, person becomes helpless. lives in poverty generation after generation, grows in poverty and dies in poverty.
Types of Poverty
- Relative Poverty: Relative poverty refers to the poverty which is spread across different classes, religions or countries. The country where standard and level of living is low, it is treated as poor in comparison to the country whose standard and level of living is high.
- Absolute Poverty: In India, the poverty line is used to measure absolute poverty. Poverty line refers to the line which divides the poor and non-poor people.
Poverty line refers to that line which divides the people of a region as poor and non-poor of a country. The percentage of population which is below the poverty line is known as head count ratio or poverty incidence ratio. In India, poverty line is determined in terms of consumption because consumption level shows the actual use of goods and services by an individual.
Fixing poverty line in India
In India, for the estimation of cut of point, only private consumption expenditure is considered in which both food and non-food items are included. For the consumption of food items, per capita consumption of calories is considered for different class of society have different calories consumption range by which head count ratio can easily be counted. The average calories requirement for rural people is 2435 whereas for urban people it is 2045. It is less in urban population because hard working males are more in rural areas.
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Trend of Poverty
Trend in poverty refers to the number of percentage of people living below the poverty line.
Note: There is no defined standards to define poverty line due to which different standards are adopted and is re-fixed as per increase in the consumption level of citizen of country. When it is fixed higher, more people are included in below the poverty line whereas when it is fixed lower, fewer people are included in below poverty line to get the exact picture and the status of poor in economy.
Inter-state comparison refers to the percentage of population which is below the poverty line in different states of India which is reported highest in Uttar Pradesh, Bihar, Odisha, Chhattisgarh, Jharkhand, Madhya Pradesh, Manipur and Assam.
Rural and Urban Poor
Rural poor includes fewer agriculture workers, tenants and marginal holders whereas urban poor includes migrant from the rural area, self-employed as street vendors and casual factory workers. A large extent of urban poverty is due to rural poverty as people from rural areas shift to urban areas in search of jobs due to which that population is added in urban areas.
Causes of Poverty
In Relation to Underdevelopment of Economy
- Timely Unemployment and Underemployment: In India, majority of poor are unemployed or underemployed therefore with the increase in the level of unemployment, the level of poverty also increases.
- Spiral of Inflation: Inflationary spiral refers to the situation in which the price keeps on rising and every item becomes expensive due to which the population which is just above the poverty line is driven down to it and those who are already below the line have to suffer for a longer period of time.
- Less Rate of Growth: With the less rate of growth of economy, the production level is also less owing ti which less workers are employed to do the work which results in unemployment in the economy.
- Heavy Population Pressure: The population of India is increasing day by day very rapidly due to which the dependency increases. Therefore, with the increase in the level of dependency burden the rate of poverty also increases.
- Lack of Infrastructure: With less social and economical infrastructure, there is instability in the growth of economy due to which the facilities like health, education etc. are out of reach from many people.
In Relation to Unequal Distribution of Income
- The poverty can also be exaggerated in relation to unequal distribution of income.
- In India, only a very few persons have huge stock of wealth while other have a little stock of wealth.
- It represents the difference between the rich and the poor in near future.
- Government of India is also putting efforts to equalize in inequality through many measures like progressive taxation system.
Measures Taken to Remove Poverty
Through GDP growth
GDP refers to the value of final goods and services which is produced within the domestic territory of the country with increase in the speed of GDP, the level of production in a country also increases which results in the generation of new employment opportunities.
Through Population Control
The level of per capita income is very low in India because of heavy rise in the level of population. It can only be controlled by moderating the growth rate of population so that more of GDP benefits can be transferred to less population. It also meana control in the size of labour force for structural balance between labour supply and capital stock.
Improvement in Distribution of Income
- Legislative Measures: Legislative means that is related to laws or some acts which are bound to be followed by everyone such as price floor policy in which a minimum sum of price must be offered to farmers for the purchase, right to education for enhancing quality of life, minimum wages act under which minimum wage is provided to all the workers.
- Fiscal Measures: Fiscal measures refers to the policy which is formed by the government like taxation and subsidies to equalize the income distribution in a country such as; charging tax in the form of progressive rate so that more money can be extracted from the richer section whereas providing subsidies on purchase to poorer section of the society.
- Control in Price Level: Price is the most essential way to equate poverty. Therefore, the rise should be stable so that standard of living remains same when the production of necessities goods is increased.
- Decrease in Unemployment: Opportunity should be given to the small scale industries and cottage industries because these industries are employment-friendly which provide more employment opportunities along with vocational education.
- Use of Labour-intensive Technique: India should adopt labour-intensive technique instead of capital-intensive technique so that more employment opportunities can be generated in an economy.
- Self-employment Opportunities: More self-employment opportunities should be provided to all the people such as loan should be provided at lower rate of interest, more start-ups opportunities should be provided etc.
- Effective Public Distribution System (PDS): More of fair price shop should be opened so that the supply of food grains can be increased for BPL population of the country at a subsidized rate.
Poverty Alleviation Programs
- National Rural Livelihood Mission (NRLM): This scheme as also known as Aajeevika. In the year 2012-2013, it was implemented in 150 districts and by 2014-2015 it is expanded to other 150 districts and ended up by providing self-employment to 90 lakh people with extent of whole India.
- Sampoorna Gramin Rozgar Yojana (SGRY): This scheme was launched on 1st September,2001 under which employment opportunities are provided to surplus workers for 100 days. The main objective of this scheme is to focus on the development of infrastructure as well as regional, economical and social conditions.
- Swarnajayanti Gram Swarozgar Yojana (SGSY): This scheme was launched in April 1999 to remove the poverty from rural areas by establishing small enterprises and replaced programs like IRDP and TRYSEM.
- Pradhan Mantri Gramodhaya Yojana (PGY): This scheme was launched in 2001 which aims at development of standard of living of the rural people by focusing on 5 areas namely; health, housing, drinking water, primary education, roads. This project was incorporated in three projects namely; Pradhan Mantri Gram Sadak Yojana, Pradhan Mantri Gramin Awas Yojana, Pradhan Mantri Gramin Drinking Water Yojana.
- Jai Prakash Rozgar Guarantee Yojana (JPRGY): This scheme provides guaranteed employment opportunities in the backward district of the country.
- Prime Minister Rozgar Yojana (PMRY): This scheme provide employment opportunities to educated unemployed by providing them a loan of ₹ 1 lakh for opening of an enterprise and ₹ 2 lakh for other activities
- Swarna Jayanti Shahri Rozgar Yojana (SJSRY): This scheme was launched on 1st December 1997, the objective of the scheme is to provide self-employment opportunities or wage employment opportunities to urban unemployed or under-employed persons.
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): This act provides work for a minimum period of 100 days under this many household are provided with employment opportunities.
- Micro Unit Development Refinance Agency Bank (MUDRA BANK): This bank was set-up in April, 2015. The main objective of this bank is to provide credit facilities of upto ₹ 10 lakh per unit to a self-employed person.
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