CBSE Class 9 Economics – 3. Poverty As Challenge (Notes)

Introduction:

In our daily life, we come across many people who we think are poor.

They could be landless labourers in villages or people living in overcrowded jhuggis in cities.

They could be daily wage workers at construction sites or child workers in dhabas.

They could also be beggars with children in tatters.

We see poverty all around us.

In fact, every fourth person in India is poor.

This means, roughly 270 million (or 27 crore) people in India live in poverty.

This also means that India has the largest single concentration of the poor in the world.

This illustrates the seriousness of the challenge.

Poverty– A general scarcity of basic necessities of life is called poverty.

The basic necessities include food, shelter, clothing, healthcare, sanitation, etc.

Other Indicators of Poverty:

Now poverty is looked through other social indicators like illiteracy level, lack of access to health care, lack of job opportunities, lack of access to safe drinking water, sanitation, etc.

Nowadays, the concept of social exclusion is becoming very common in the analysis of poverty.

Social exclusion means, generally poor are excluded in the community of better off people.

Two Typical Cases of Poverty:
The following two cases show the many dimensions of poverty, including lack of proper food, shelter, healthcare, education as well as clean water and sanitation. They also show lack of a regular means of livelihood.

Urban Case:

Thirty-three year old Ram Saran works as a daily wage labourer in a wheat flour mill near Ranchi in Jharkhand.

He manages to earn around Rs 1500 a month when he finds employment, which is not often.

The money is not enough to sustain his family of six that includes his wife and four children aged between 12 years to six months.

He has to send money home to his old parents who live in a village near Ramgarh.

His father a landless labourer depends on Ram Saran and his brother who lives in Hazaribagh, for substence.

Ram Saran lives in a one-room rented house in a crowded basti in the outskirts of the city.

It’s a temporary shack built of bricks and clay tiles.

His wife Santa Devi, works as a part time maid in a few houses and manages to earn another Rs. 800.

They manage a mere meal of dal and rice twice a day, but there’s never enough for all of them.

None of the children go to school.

They have only two pairs of hand clothes each.

New ones are bought only when the old clothes become unwearable.

Shoes are a luxury.

The younger kids are undernourished.

They have no access to healthcare when they fall ill.

Rural Case:

Lakha Singh belongs to a small village near Meerut in Uttar Pradesh.

His family doesn’t own any land.

At times they get paid Rs. 50 for a hard day’s work.

But often it’s in kind like a few kilograms of wheat of dal or even vegetables for tolling in the farm through the day.

The family of eight cannot always manage two square meals a day.

Lakha lives in a kutcha hut on the outskirts of the village.

The women of the family spend the day chopping fodder and collecting firewood in the fields.

His father a TB patient, passed away two years ago due to lack of medication.

His mother now suffers from the same disease and life is slowly ebbing away.

Although the village has a primary school, Lakha never went there.

He had to start earning when he was 10 years old.

New clothes happen once in a few years. Even soap and oil are a luxury for the family.

Assessment of the two cases of poverty:

These two typical cases illustrate many dimensions of poverty.

They show that poverty means hunger and lack of shelter.

It also is a situation in which parents are not able to send their children to school or a situation where sick people cannot afford treatment.

Poverty also means lack of clean water and sanitation facilities.

It also means lack of a regular job at a minimum decent level.

Above all it means living with a sense of helplessness.

Poor people are in a situation in which they are ill-treated at almost every place, in farms, factories, government offices, hospitals, railway stations etc.

Poverty as seen by social scientists:

Usually the indicators used relate to the levels of income and consumption.

But now poverty is looked through other social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation etc.

Analysis of poverty based on social exclusion and vulnerability is now becoming very common.

Social Exclusion:

According to this concept, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings.

Social exclusion can be both a cause as well as a sense.

Broadly, it is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.

A typical example is the working of the caste system in India in which people belonging to certain castes are excluded from equal opportunities.

Lack of access to safe drinking water, sanitation etc. that others (their betters.) enjoy.

A typical example is the working of the caste system in India in which people belonging to certain castes are excluded from equal opportunities.

Social exclusion thus may lead to, but can cause more damage than, having a very low income.

Vulnerability:

Vulnerability to poverty is a measure, which describes the greater probability of certain communities (say members of a backward caste) or individuals (such as a widow or a physically handicapped person) of becoming, or remaining poor in the coming years.

Vulnerability is determined by the options available to different communities for finding an alternative living in terms of assets, education, health and job opportunities.

Further, it is analyzed on the basis of the greater risks these groups face at the time of natural disasters (earthquakes, tsunami), terrorism etc.

Additional analysis is made of their social and economic ability to handle these risks.

Certain communities are more vulnerable to poverty than others.

Data suggests that there is a larger percentage of poor among the Scheduled Castes and Scheduled Tribes.

Minorities are also more vulnerable to poverty.

Similarly, women, widow and handicapped are more vulnerable groups.

When a person has the least capability of withstanding various challenged towards his economic relevance, he can be termed as vulnerable to poverty.

In fact, vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs.

Poverty Line:

A common method used to measure poverty is based on the income or consumption levels.

A person is considered poor if his or her income or consumption level falls below a given “minimum level” necessary to fulfill basic needs.

Therefore, poverty line may vary with time and place.

Each country uses an imaginary line that is considered appropriate for its existing level of development and its accepted minimum social norms.

For example, a person not having a car in the United States may be considered poor In India, owning of a car is still considered a luxury.

While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement etc. are determined for subsistence.

These physical quantities are multiplied by their prices in rupees.

The present formula for food requirement while estimating the poverty line is based on the desired calorie requirement.

Food items such as cereals, pulses, vegetables, milk, oil, sugar etc. together provide these needed calories.

The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.

On the basis of these calculations, for the year 2011-12, the poverty line for a person was fixed at Rs 816 per month for the rural areas and Rs. 1000 for the urban areas.

Despite less calorie requirement the higher amount for urban areas has been fixed because of high prices of many essential products in urban centres.

These surveys are carried out by the National Sample Survey Organisation (NSSO).

However, for making comparisons between developing countries, many international organisations like the World Bank use a uniform standard for the poverty line: minimum availability of the equivalent of $90 per person per day

Poverty estimates:

There is substantial decline in poverty ratios in India from about 55 per cent in 1974 to 37.2 per cent in 2004-05.

The proportion of people below poverty line further came down to about 21.9 per cent in 2011-12.

If the trend continues, people below poverty line may come down to less than 20 per cent in the next few years.

          

Vulnerable groups – The groups which face greater risk at the time of natural calamity are called vulnerable groups.

The proportion of people below poverty line is also not same for all social groups and economic categories in India.

Social groups which are most vulnerable to poverty are scheduled caste and scheduled tribe households.

Similarly, among the economic groups, the most vulnerable groups are the rural agricultural labour households.

Although the average for people below poverty line for all groups in India is 26. 51 out of 100 people belonging to scheduled tribes are not able to meet their basic need.

Similarly, 50 per cent of casual workers in urban areas are below poverty line.

About 50 per cent of landless agricultural workers and 43 per cent of scheduled castes are also poor.

The double disadvantage, of being a landless casual wage labour household in the socially disadvantaged social groups of the scheduled caste or the scheduled tribe population highlights the seriousness of the problem

           

Story of Sivaraman:

Sivaraman lives in a small village near Karur town in Tamil Nadu.

Karur is famous for its handloom and power loom fabrics.

There are 100 families in the village.

Sivaraman an Aryunthathiyar (cobbler) by caste now works as an agricultural labourer for Rs 160 per day.

But that’s only for five to six months in a year.

At other times, he does odd jobs in the town.

His wife Sasikala too works with him.

But she can rarely find work these days, and even if she does, she’s paid Rs 100 per day for the same work that Sivaraman does.

There are eight members in the family.

Sivaraman’s 65 year old widowed mother is ill and needs to be helped with her daily chores.

He has a 25-year-old unmarried sister and four children aged between 1 year to 16 years.

Three of them are girls, the youngest is a son. None of the girls go to school.

Buying books and other things for school-going girls is a luxury he cannot afford.

Also, he has to get them married at some point of time so he doesn’t want to spend on their education now.

His mother has lost interest in life and is just waiting to die someday.

His sister and elder daughter take care of the household.

Sivaraman plans to send his son to school when he comes of age.

His unmarried sister does not get along with his wife.

Sasikala finds her a burden but Sivaraman can’t find a suitable groom due to lack of money.

Although the family has difficulty in arranging two meals a day, Sivaraman manages to buy milk once in a while, but only for his son.

Inter-State disparities:

Poverty in India also has another aspect or dimension.

The proportion of poor people is not the same in every state.

Although state level poverty has witnessed a secular decline from the levels of early seventies, the success rate of reducing poverty varies from state to state.

On the other hand, poverty is still a serious problem in Odisha, Bihar, Assam, MP and Uttar Pradesh.

Odisha and Bihar continue to be the two poorest states with poverty ratios of 33.7 and 32.6 per cent respectively.

Along with rural poverty, urban poverty is also high in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh.

In comparison, there has been a significant decline in poverty in Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal.

States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused more on human resource development. In west Bengal, land reform measures have helped in reducing poverty.

In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement.

Global poverty scenario:

The proportion of people in developing countries living in extreme economic poverty defined by the World Bank as living on less than $1.90 per day-has fallen from 35 per cent in 1990 to 10.68 per cent in 2013.

Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development.

Number of poors in China has come down from 88.3% in 1981 to 14.7% in 2008 to 1.96 in 2013 in the countries of South Asia (India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan) the decline has not been as rapid.

Despite decline in the percentage of the poor, the number of poor has declined marginally from 44% in 1990 to 17% in 2013.

In Sub-Saharan Africa, poverty in fact rose from 54 per cent to 1990 to 41 per cent in 2013.

In Latin America, the ratio of poverty declined from 16% 1990 to 5.4% in 2013.

Poverty has also resurfaced in some of the former socialist countries like Russia, where officially it was non-existent earlier.

         

                                      

Causes of poverty:

There were a number of causes for the widespread poverty in India.

One historical reason is the low level of economic development under the British colonial administration.

The policies of the colonial government ruined traditional handicrafts and discouraged development of industries the textiles.

The low rate of growth persisted until the nineteen eighties.

This resulted in less job opportunities and low growth rate of incomes.

This was accompanied by a high growth rate of population.

With the spread of Irrigation and the Green Revolution, many job opportunities were created in the agriculture sector.

But the effects were limited to some parts of India.

The industries, both in the public and the private sector, did provide some jobs.

But these were not enough to absorb all the job seekers, unable to find proper jobs in cities, many people started working as rickshaw pullers vendors, construction workers, domestic servants etc.

With Irregular small incomes, these people could not afford expensive housing.

They started living in slums on the outskirts of the cities and the problems of poverty, largely a rural phenomenon also became the feature of the urban sector.

Another feature of high poverty rates has been the huge income inequalities.

One of the major reasons for this is the unequal distribution of land and other resources.

Despite many policies, we have not been able to tackle the issue in a meaningful manner.

Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments.

Since lack of land resources has been one of the major causes of poverty in India, proper implementation of policy could have improved the life of millions of rural poor.

Many other socio-cultural and economic factors also are responsible for poverty In order to fulfill social obligations and observe religious ceremonies people in India, including the very poor, spend a lot of money.

Small farmers need money to buy agricultural inputs like seeds, fertilizers, pesticides etc.

Since poor people hardly have any savings, they borrow Unable to rep because of poverty, they become victims of indebtedness.

So the high le of indebtedness is both the cause and effect of poverty

Anti poverty measures:

Removal of poverty has been one of the major objectives of Indian developmental strategy.

The current anti-poverty strategy of the government is based broadly on two planks

(1) Promotion of economic growth

(2) Targeted anti-poverty programmes.

Over a period of thirty years lasting up to the early eighties, there were little per capita income growth and not much reduction in poverty.

Official poverty estimates which were about 45 per cent in the early 1950s remained the same even in the early eighties.

Since the eighties, India‘s economic growth has been one of the fastest in the world.

The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s.

Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction.

Economic growth widens opportunities and provides the resources needed to invest in human development.

This also encourages people to send their children, including the girl child, to schools in hope of getting better economic returns from investing in education.

However, the poor may not be able to take direct advantage from the opportunities created by economic growth.

Moreover, growth in the agriculture sector is much below expectations.

This has a direct bearing on poverty as a large number of poor people live in villages and are dependent on agriculture.

Anti-poverty alleviation programmes:

In these circumstances, there is a clear need for targeted anti-poverty programmes.

Although there are so many schemes which are formulated to affect poverty directly or indirectly, some of them are worth mentioning.

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA):

MNREGA Act 2005 was passed in September 2005.

The Act provides 100 days assured employment every year to every rural household in 200 districts.

Later, the scheme will be extended to 600 districts.

One third of the proposed Jobs would be reserved for women.

The central government will also establish National Employment Guarantee Funds.

Similarly state governments will establish State Employment Guarantee Funds for implementation of the scheme.

Under the programme if an applicant is not provided employment within fifteen days she/he will be entitled to a daily unemployment allowance.

National Food for Work Programme (NFWP):

Another important scheme has been the National Food for Work Programme (NFWP) which was launched in 2004 in 150 most backward districts of the country.

The programme is open to all rural poor who are in need of wage employment and desire to do manual unskilled work.

It is implemented as a 100 per cent centrally sponsored scheme foodgrains are provided free of cost to the states.

Once the NREGA in force, the NFWP will be subsumed within this programme

The Prime Minister Rozgar Yojana (PMRY):

The Prime Minister Rozgar Yojana (PMRY) is another scheme which was started in 1993.

The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns.

They are helped in setting up small business and Industries

Rural Employment Generation Programme (REGP):

Rural Employment Generation Programme (REGP) was launched in 1995.

The aim of the programme is to create self-employment opportunities in rural areas and small towns.

A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan.

Swarnajayanti Gram Swarorgar Yojana (SGSY):

Swarnajayanti Gram Swarorgar Yojana (SGSY) was launched in 1999.

The programme aims at bringing the assisted poor families above the poverty line by organising them into self help groups through a mix of bank credit and government subsidy

Pradhan Mantri Gramodaya Yojana (PMGY):

Under the Pradhan Mantri Gramodaya Yojana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

Antyodaya Anna Yojana (AAY):

Another important scheme is Antyodaya Anna Yojana (AAY) launched in 2000.

The results of these programmes have been mixed.

One of the major reasons for less effectiveness is the lack of proper implementation and right targeting.

Moreover, there has been a lot of overlapping of schemes.

Despite good intentions, the benefits of these schemes are not fully reached to the deserving poor.

Therefore, the major emphasis in recent years is on proper monitoring of all the poverty alleviation programmes

The challenges ahead:

Poverty has certainly declined in India. But despite the progress, poverty reduction remains India’s most compelling challenge.

Wide disparities in poverty are visible between rural and urban areas and among different states.

Certain social and economic groups are more vulnerable to poverty.

Poverty reduction is expected to make better progress is expected to make better progress in the next ten to fifteen years.

This would be possible mainly due to higher economic growth, increasing strees on universal free elementary education, declining population growth, increasing empowerment of the women and the economically weaker sections of society.